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  • L. O.

  • Two simple letters that marked one of the biggest changes in human history.

  • In 1969, programmers were trying to type "login".

  • Charlie typed the L.

  • He typed the O.

  • He typed the G.

  • You get to G—whackothe system crashed.

  • So the very first message on the Internet ever was lo, as in lo and behold.

  • 50 years later and half the world is now online.

  • But that half is primarily from the rich world, which means that the other half quite obviously will have to come from the poor world.

  • How will the second half of humanity coming online change the internet?

  • And how will the Internet change them?

  • The really interesting place to look at is India.

  • India's Internet penetration was pretty low until very recently with the launch of a new mobile network called Reliance Jio with incredibly cheap phones and incredibly cheap data prices.

  • Reliance Jio launched aggressively in 2016 offering subsidized handsets and free data to hook people in.

  • India went from being a relatively expensive place to consume data to being the cheapest in the world.

  • Prices crashed by 94%.

  • Newer users in the developing world are browsing the Internet in much the same way as people in the developed world.

  • When people get online, the first thing they do is they chat with their friends.

  • They watch sports.

  • They watch movies.

  • They watch music videos.

  • They watch an extremely large amount of pornography.

  • But this is where the similarities end.

  • The Internet was built on the assumptions that many users speak English, are literate and media-savvy.

  • None of those things remain true for the second half of the Internet.

  • You have a whole bunch of languages that don't enjoy very good support in terms of web browsers or input.

  • And you have a whole bunch of people who can't actually read or write.

  • There's practically no usage of desktop computers, laptop computers.

  • It's almost entirely on mobile phones, and these mobile phones tend not to be the expensive, very powerful ones.

  • They have limited amounts of storage.

  • This is prompting big tech companies to change the way their products work.

  • They're having to understand these new behaviors.

  • They're having to fundamentally rethink how they supply their services.

  • For much of the world that is now coming online, text is not the natural way to interact.

  • It's smaller Apps that can do more and that can be used with voice or video rather than text.

  • Many tech giants have already begun to establish themselves in emerging markets.

  • Facebook has over 1.5 billion users in developing countries.

  • And the YouTube channel with the most subscribers is a Bollywood studio and record label.

  • Creating large user bases is one thing.

  • Making money from them is another.

  • The prevailing assumption around making money on the Internet until this point has been a largely American assumption of advertising.

  • 99% of Facebook's revenue comes from advertising, as does 85% of Google's.

  • But many people in the developing world are poor.

  • So users don't have the same value to advertisers.

  • Take Facebook's last quarter of 2018.

  • They make 12 times as much money per user in North America than they do in Asia.

  • And overall annual revenue from the developing world is much lower too.

  • Google for instance, about 46% of their revenues comes from the US alone and only about 15% from Asia.

  • That 15% includes rich countries like Australia and Japan.

  • Take those away and the revenue from Asia would be even lower.

  • If the traditional advertising model isn't going to work, tech companies will have to think outside the box.

  • What people will pay for is the opportunity to express themselves.

  • Until the advent of smartphones really, a big money-spinner for Indian mobile networks was something called a caller-ringback tone.

  • I would pick a song that I like very much, and if you were calling me, you would hear it.

  • And I pay a monthly fee for that to happen.

  • Now think about exactly what this is.

  • I am paying money for a song I will never listen to, only so that my friends who are calling me can hear it because I want to express myself.

  • So it'll be lots of novel ideas like that for very, very small amounts of money.

  • But we're talking about lots and lots of people doing these things.

  • One thing is for sure.

  • The Internet's second revolution will change people's lives for the better.

  • The ability of people around the world to have a good time is becoming a little bit more equal.

  • And that, while hard to pin down in economic data, is a net benefit to just the general well-being of humankind.

  • Which can be very easy to understate or to ignore, especially if you're used to those things, but has a really meaningful impact.

L. O.

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The internet's second revolution | The Economist

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    Estelle posted on 2021/05/21
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