the reflexions insider

The “prisoner’s dilemma” is an analogy in game theory that’s used to describe everything from crowd behavior to stock markets and employee group evaluations. One variation is this: you and an associate are each arrested and interrogated separately. The first to implicate the other will get a light sentence; the other is imprisoned indefinitely. If you implicate each other you both get a moderate sentence. But if you both stay quiet, you’re both let go. It’s about mutual trust and cooperation for a mutually beneficial outcome. If you look hard enough, economists and behavioral anthropologists will tell you, you’ll find it everywhere.

David Carr wrote an article in yesterday’s New York Times about why newspapers find themselves in this very predicament, but with a twist — there’s no way out unless they cooperate. Cooperating in this scenario would probably mean something like a subscription-based paid content model for a network of websites from large daily newspapers. If you pay the fee, you get unfettered access to all participating websites. If you don’t, you get very little (except what others might be willing to repost, a possible copyright issue lurking in the shadows of what has historically been a free and open [...]

Consider this: Twitter didn’t exist three years ago. YouTube didn’t exist four years ago. And Facebook, the second most-visited website in the world on Christmas Day, 2008 (after Google), was started as a half-serious side project by Mark Zuckerberg in his dorm room less than five years ago. All of these websites were effectively created after the (now oft reviled) term “Web 2.0″ was coined by Tim O’Reilly and John Battelle in 2004.

By any standard, profitable or not, these are enormous web properties. And the timeline above demonstrates how rapidly the web landscape shifts and how fickle are its users.

Below I’ve identified several trends that I think will make an impact over the coming months and into 2010. This isn’t meant to be a “prediction” list per se, but an attempt at identifying how the current dynamics of social media will play out. Enjoy.

Twitter will launch a commercial subscription service that will generate revenue by letting companies use the platform to connect with customers. It will receive additional buyout offers but will remain independent for at least another year. I believe its investors are convinced that it’s worth more than their potential suitors think. And I believe they’re right. But having zero revenue is not sustainable.
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Something extraordinary happened on November 16, 2008.

At 12:02:32 PM (EST) a magnitude 7.5 earthquake struck Indonesia. Within seconds, users of the microblogging platform Twitter who were located in the affected area had broadcast text messages describing the event. Minutes later, tens of thousands of users had learned about the earthquake as news fanned out across Twitter’s global web of social networks in the form of web updates, RSS feeds, mobile application alerts, and SMS text messages.

About two hours later the New York Times, CNN, and other news outlets “broke” the story. Granted, it was a weekend. But any observer of how Twitter has changed the dynamics of information sharing can see that the days of large news outlets serving as the de facto source of breaking news are effectively over.

As the currency of the web as a communications tool has shifted from documents and pages to blogs and tweets, the following trends have emerged:

1. The discrete units of web-based communication have gotten smaller.

2. The propagation time of information among social networks has gotten faster.

It’s worth noting that these two trends are related. Smaller chunks of content are easier to consume and lead to faster rates of propagation. Information flow becomes more [...]