Monetization of Public Space

The current rumors say that Facebook has a paper valuation of $50 billion and Twitter has one of $10 billion. Those numbers are certainly part of a mini-bubble today, but they may be supportable tomorrow. It’s interesting to note that the only service these companies do is provide a space for people to do things, a space for people to provide their own information. This is not nothing, as it involves paying for the space to host photographs and videos and for network costs. But Facebook and Twitter are not being valued for being hosting providers. They are being valued for creating a shared public space which many people choose to enter. (WordPress and LiveJournal are other examples of online companies that simply create a shared space; Google and Bing are examples of online companies which provide a service, providing real information beyond what people do on their sites.)

Is there anything comparable in the real world? The real world is full of shared public spaces, but they are not generally money making operations. I think of places like parks or shared urban spaces like Times Square. These are typically built by the government or by some public cooperative at a cost, rather than being built by a private corporation as a source of revenue.

What’s the key difference? It’s that it is much cheaper to create an online space which can hold several million people than it is to create a physical space that large. It’s cheap enough that even the relatively small returns you get from billboards may be enough to pay for creating that space. And, since it is online, you can have targeted billboards, which may pay somewhat more.

I think this becomes an interesting difference between the online world and the real world. In the online world, the shared public spaces are not paid for by society, they are paid for private companies. There is no notion of a right of public access on the Internet. There is no equivalent of the homeless person on the corner or the busker singing for change. I don’t know if these differences are good or bad.

People are already working on goggles which bring the online world into the real world, adding annotations for the objects that we look at. It will be a simple further step for these goggles to edit out the things we don’t want to see, and to add targeted billboards in their place. As the goggles would be sold by private corporations, that will bring the monetization of public spaces in the online world into the real world as well. This is obviously a very speculative idea, but it would in some ways be the logical culmination of people’s withdrawal from cities and shared society into an increasingly private life. Again, I don’t know if this would be good or bad, but if it happens it has the potential to be truly different.

8 Comments »

  1. fche said,

    February 16, 2011 @ 8:09 am

    “What’s the key difference? It’s that it is much cheaper to create an online space which can hold several million people than it is to create a physical space that large.”

    In the case of facebook and twitter, a bigger difference may be the set of network effects that make many people want to go to the same “place” at the same time. Public parks aren’t places where many people want to meet each other; they are more like places to get away from everyone else.

  2. Paulo Matos said,

    February 16, 2011 @ 8:11 am

    “As the googles would be sold by private corporations…”

    I guess you meant goggles! 🙂

  3. Ian Lance Taylor said,

    February 16, 2011 @ 12:55 pm

    fche: Good point.

    pmatos: Indeed. Now fixed. Thanks.

  4. gumby said,

    February 16, 2011 @ 5:03 pm

    The world, and in particular places like the US and Singapore have many shared public spaces which are money-making, such as malls. Despite these being private property, specific rights of access and free speech have become legally enforceable over the years. One could imagine the same happening to online spaces.

  5. Andrew F said,

    February 17, 2011 @ 5:24 am

    This is already an issue in sports broadcasting.

    Used to be, people would pay the venue owners to put billboards up, reasonably expecting that signs around the field would show up on TV.

    Then, broadcasters realised that they could overlay virtual billboards.

    It’s been suggested as a way to censor, too. It’s illegal to advertise cigarettes in Australia, but broadcasters are allowed to show overseas events which have ads for cigarettes around the ground, on cars, shirts, etc. Now, some people are asking whether it’s feasible to demand that the networks edit those ads out.

  6. Ian Lance Taylor said,

    February 17, 2011 @ 8:42 pm

    I’m intrigued by the notion of applying the right of public access to Facebook.

  7. gumby said,

    February 17, 2011 @ 11:34 pm

    As far as I know there is completely public access to FB (it’s not a right, it’s just never been restricted by FB as far as I know). A space being private doesn’t make it inherently more restrictive than a public space — strip clubs may be an extreme example, but most shops want to be open to almost any customer while some public spaces may be restricted (Foothills Park is only open to Palo Alto residents, at least nominally).

    Leaving aside my channeling of my inner republican though: it will be interesting to see if the public access rules that apply to malls may someday apply to, say, comment moderation. Certainly there was a time when many shops didn’t want to cater to everyone, and it took government action to fix it.

  8. Ian Lance Taylor said,

    February 18, 2011 @ 6:21 am

    There are various restrictions on access to Facebook outlined in their terms of service. E.g., I see “You will not provide any false personal information on Facebook,” “You will not use your personal profile for your own commercial gain,” “You will keep your contact information accurate and up-to-date.” Facebook has in the past removed accounts for using what appear to be fake names. This is not such a big deal really, but at least in principle it’s comparable to being required to show government issued ID in order to enter a mall.

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