Who Will Rule the New Internet?

By Josh Quittner / San Francisco

Correction Appended: June 6, 2008

Take what man makes and use it, But do not worship it, For it shall pass.

An anonymous wit scratched those lines on the side of a junked car door and lugged it to a trail near my home in Northern California. The middle of a pristine, ancient redwood grove is the wrong place to find a rusted-out car door, but the words magically transformed the thing from an aggravating piece of junk into art. I Googled the quote as soon as I got home, of course, but found nothing. (Thanks to Google, we live in a world where "I don't know" has become an unacceptable response. So my inability to identify the author there is driving me crazy.)

My town is pretty close to Silicon Valley, and most of my neighbors make their living in technology, while I make mine writing about it. All of us, though, worship at the altar of bright and shiny things. These days, it's the impending launch of Apple's next-generation iPhone that has the faithful davening. If the whispers of pending miracles are to be believed, this new phone could end up becoming the next big "platform."

A platform, to computer people, is the software code on which third-party applications function. There are scores of big platforms out there -- something like three dozen in the international mobile-phone business alone. But a truly successful one can extend far beyond its immediate group of users and effectively create and control an enormous market. In the computer industry, IBM dominated the first commercial platform with its expensive mainframes and operating systems, aimed at corporate users. Seemingly overnight, IBM was supplanted by Microsoft and its Windows operating system as the PC revolution took hold. Windows, in turn, is now losing its power as the Web -- owned by no one, accessible to all -- becomes the dominant platform. (Yes, the Web is nothing more than a big layer of code; all those websites we visit are merely applications that sit atop it.)

Every major player in Techland wants to create the next great platform, of course. What's new here is that it's possible for any number of them to succeed. "Among the things that are different from the old status quo is the idea that one will win," says Marc Andreessen, who helped write the first widely adopted browser, Mosaic, which popularized the Web. The Internet is a much larger playing field than PC operating systems. "Trying to decide which will win," Andreessen adds, "is kind of like debating whether beef, chicken or lobster is going to win the market for food."

Still, for wonks like me, it's been riveting to watch three of the most innovative companies in Silicon Valley -- each representing a fundamental phase of the information era--battle it out. Apple, Google and Facebook are, respectively, an icon from the pioneering days of personal computers; the biggest, most profitable company yet born on the Web; and a feisty upstart whose name is synonymous with the current migration to social networks.

In many ways, these companies are technology's standard-bearers, though their guiding philosophies differ. Google, for instance, advocates an "open" Web and tends to push for open standards and alliances among developers. Facebook, with its gated community of 70 million active users, offers a more controlled experience and, so far at least, wants to keep its users safely within its walls. Apple comes from the old world. Its elegant products cocoon customers from the chaos of the information age, but the Apple experience tends to be highly controlled, with Apple hardware at the end points and Apple software and services, like the iTunes Music Store, in between.

The winners of the platform wars stand to make billions selling devices, selling eyeballs to advertisers, selling services such as music, movies, even computer power on demand. Yet the outcome here is far more important than who makes the most money. The future of the Internet -- how we get information, how we communicate with one another and, most important, who controls it -- is at stake.

Why Facebook Opened Up The word platform reached buzzword status a year ago when Facebook founder Mark Zuckerberg announced the start of a movement. "Social networks are closed platforms," Zuckerberg told a gathering of about 800 developers in San Francisco. "Today we're going to change all that."

You can watch the video of the speech, as I did, by Googling the name of the developers' conference, "F8." What made F8 significant, historic even, was that it was the first time the Facebook platform was thrown open to developers. Anyone who knew how to write applications for Facebook was invited in. Andreessen says an open-coding environment is key to any successful platform because the easier it is to use, the more developers will be drawn to it, making the platform that much more powerful. Facebook also gave developers free distribution. Users who want to add a new app can do so with one-click simplicity. All this, says Andreessen, who is rumored to be considering a seat on Facebook's board, has helped make Facebook compelling: "The point of being a platform is you can enable creativity on the part of thousands or millions of other people who you don't have to pay and who have ideas that you wouldn't have thought of."

That's precisely what has happened at Facebook during the past year. A kind of gold rush took hold as developer after developer started writing simple applications. As of June 1, some 24,000 programs -- ranging from simple social gestures, like the ability to virtually poke a friend, to fully formed games like Scrabulous -- were available to Facebook's users. Expect loads more. Facebook has given out its API keys -- the code that developers need to access Facebook's platform--an astounding 400,000 times, many more than even Zuckerberg expected.

Zuckerberg, 24, is a hot ticket on the conference circuit, and when I spoke to him, he had just returned to Palo Alto, Calif., from a major tech-industry event near San Diego. There he had been grilled yet again on whether he'd sell Facebook to Microsoft, whose minority investment gave Facebook a $15 billion valuation. (Microsoft, which tried and failed to buy Yahoo!, could use a new platform itself.) Yet again Zuckerberg said no, he's not selling out -- he's just trying to build a great and viable platform and that takes time. Zuckerberg speaks in a steady, mellifluous tenor; he has a long neck and tends to point his chin upward, as if aiming the bell of a saxophone. "A lot of the last year in developing the platform has just been keeping up with the runaway success there," he says.

That's what happens when you create a successful platform: a virtuous circle blooms, with a mass of users attracting a horde of developers who build fun or useful stuff, which in turn pulls in even more users. Needless to say, there are some pretty worthless and annoying applications too. At Facebook, app writers' income is derived from advertising based on the number of people who install their programs, and a bunch have adapted in intrusive ways. Facebook has taken flak for applications like FunWall, which made it easy for users to accidentally spam their entire friend lists with e-mail invites to install FunWall. Zuckerberg says Facebook is tweaking its platform to help the most useful apps to spread while squelching the junk.

I ask Zuckerberg about the theory that closed, proprietary networks like Facebook could stifle the Net's innovative spirit. That idea is the subject of The Future of the Internet and How to Stop It, a new book by Jonathan Zittrain, co-founder of Harvard University's Berkman Center for Internet and Society. He argues that the rise of gated, closed communities like Facebook, the advent of the iPhone and even the seemingly innocuous standards-setting of Google could draw nerd talent away from the disruptive kind of innovation that occurred on the wild and woolly Net. Zuckerberg pauses for a minute to think, then says, "I generally agree with those principles and think that type of openness and portability is extremely important." Great platforms are often closed when they start and open up only as they mature and can handle the load. He adds, "We're kind of leaving that initial phase now and moving to a more open phase."

In fact, last month Zuckerberg announced Facebook Connect, which would allow users to take their contact lists with them to websites that add a snippet of code. Over time, it will be possible for, say, a blog owner to embed a Facebook-style "wall" on his or her site, which would allow one to read only the comments scrawled there by friends. It's a very cool idea. Facebook everywhere! But there's only one problem. A few days after Facebook Connect was announced, Google launched a nearly identical plan called ... Friend Connect. And if there's anything that could slow Facebook's frantic pace, it's Google.

Google Tries to Connect The first phase of the web's growth was all about putting information online and giving people a way to find and connect to it. The second and current phase is all about connecting people to one another.

"Social is the new black," says Joe Kraus, who oversees Google's efforts to build out a social layer that runs across the entire Web. In this, as in all things that Google does, Kraus' strategy has been to create an alliance of social networks that will use open standards rather than Facebook's proprietary network and coding language, so that developers can spread their applications.

"Google has relied on an open Internet to make its entire business," he tells me. "It has a genetic predisposition for openness." That's partly because Google's core business, search, depends on openness. Google can't find the things you want on the Web -- documents, music, images and so on--unless they are open and accessible, Kraus says. The richest Internet company on the Fortune 500 (it's ranked 150, with $16.5 billion in revenue), Google has a business plan that depends on the Web being used by as many people as possible. That's why the company spends so much time and energy building new applications that make the Web more useful or fun.

Social networks are a threat to that business; users tend to stay within their network and communicate among themselves or simply fool around with apps. When Facebook's users are playing Scrabulous or tagging photos, for example, they're not using Google. Indeed, they're more likely to discover new things via friends or in-network applications such as iLike, a service that matches your friends' musical tastes to your own.

So Google retaliated last November with OpenSocial, an alliance of Facebook's competitors -- MySpace, hi5 and Google's own social network, Orkut, among others -- to try to create a write-once, run-anywhere application platform. That means a developer, with only modest tweaking, can build an application that runs across all the major social networks except, of course, Facebook. "When you talk to developers, most of them don't have 50 people; they can't write their applications 50 different ways," Kraus says. "They really want to write their application once and get as much distribution as possible."

He definitely has a point. But I wonder if Google is too late -- and old -- for the social-networking party. "Google recognizes it needs to become more people-oriented, but it needs to add that to its existing platform. It's not at all native," says my neighbor, Seth Goldstein, who runs SocialMedia, an advertising network for social networks. "Facebook was designed from the ground up to render these complex and nuanced social relationships."

Why the iPhone Matters Apple's calculus is much simpler: it doesn't matter who prevails online -- Facebook, Google, both or someone else. Steve Jobs simply wants to ensure that you use his devices to get there.

To that end, the new iPhone, which is expected to be announced on June 9, is "hugely significant," says Andreessen, who now presides over a company, Ning, that allows anyone to build his or her own social network. "The iPhone, a lot of people around here believe -- and I think this is true -- is the first real, fully formed computer that you can put in your hand," he says. "It has all the requirements it needs to be a viable platform."

Matt Murphy -- a venture capitalist at Kleiner Perkins Caulfield & Byers who oversees the $100 million iFund to seed start-ups that build great iPhone apps -- goes even further. He claims that the iPhone will "absolutely be the driver of the post-PC world." Murphy points out that the kit needed by developers to build iPhone apps has been downloaded more than 200,000 times, and he estimates that about 1,000 applications will be available to consumers when the iPhone-apps store launches with the phone. "If you look at so many of the constraints that have held back the mobile ecosystem, Apple basically takes all of those away and provides an open platform, a great device and a user base that's rabid for these new kinds of applications," he says.

Jobs' great skill has always been integrating cutting-edge technology and making it accessible. Flat-panel monitors, moviemaking software, wi-fi, digital-music players, touch-sensitive screens -- these have all been out there over the past decade or so in ragged and unpolished ways. His genius was finding and repackaging them, making the technology work to delight the masses. Similarly, Apple's iPhone 2.0 will popularize "geo-location" -- think of the satellite-based navigation systems in many cars -- as a way for people to communicate wherever they are.

Yet again, Google, which is fighting the platform wars on multiple fronts, could be Apple's stiffest competition. It is leading another coalition to build an open-operating system called Android that will work in the next generation of cell phones as well as other consumer devices. The Open Handset Alliance has 34 members -- mobile-phone carriers as well as handset makers, including Motorola, LG Electronics, Samsung, China Mobile, Sprint Nextel and T-Mobile. Though Google ceo Eric Schmidt sits on Apple's board of directors and Jobs saluted Google as a partner whose apps were on the iPhone, Apple is notably not in the alliance.

This appears to be a case of -- in Valleyspeak -- "frenemies," companies that work together in some businesses while competing in others.

The first Android-powered phones will arrive, Google says, in the second half of the year, possibly around the same time as the new iPhone. At a recent Google developers' conference, the company showed off, for the first time, a generic cell phone running the operating system. Touch sensitive, with an onboard, motion-sensing accelerometer that can also place a user precisely on a Google satellite map, the device resembles nothing so much as an iPhone. Android, explains Andy Rubin, Google's director of mobile platforms, is an open platform for developers `a la Facebook; the code is theirs to modify. He says developers have so far written more than 1,800 applications, which could be distributed on a Google site arranged according to popularity, as YouTube is. "There's some pretty innovative stuff there," Rubin explains. "This is merging the handset and the Web and coming up with something completely new."

To spark development, Google held a competition that will ultimately seed 10 application developers with $275,000 for the best apps. Robert Lam, whose Eco2go was named last month as one of the 50 finalists for the top prizes, says he decided to develop his application, which helps users compute and reduce their carbon footprints, for the Android platform rather than the iPhone because it's so much easier. Developing for the iPhone "would have cost us an annual fee to list our application, and we would have to share 30% of our revenue with Apple as well," Lam says. That said, Lam is already looking into porting the app over to the iPhone after Eco2go is established. The iPhone could end up being enormously popular, and at this stage of the game there's no sense in foreclosing options.

I agree. Like him, I'm rooting for everyone in this war because it sounds as if -- the concerns of Harvard's Zittrain notwithstanding -- we all win here. Andreessen is right when he says the Web is so vast that it defies attempts to control it. With Google riding shotgun, it strikes me as unlikely that Facebook or anyone else can pull too far ahead. Also, I believe Zuckerberg when he says Facebook will continue to open over time. It's the smart move, and he's a smart cookie. Finally, I want to get my hands on the new iPhone. Its time will come and go. But for now? Great technology, today as always, renders us as gods.

The original version of this article incorrectly stated that F8 is the name of the Facebook platform. It is the name of the developer's conference.