Last week I went to one of those Internet conferences I get invited to now and then, and of course New York Times columnist Thomas Friedman was there. He wasn't actually there in person. It wasn't that important a conference. He sent a tape of himself. He took the entire thesis of his best-selling book The World Is Flat and squished it down into twenty minutes. I like Thomas Friedman and was happy to see him, even on tape. Coincidentally, a night earlier, I had found myself standing across from Friedman, in person, at a craps table in Las Vegas. As he rolled the dice to make a five, I shouted, "This is it, Tom, this is your chance to make up for being wrong on Iraq." But he rolled a seven and crapped out.
A day later, there he was at this conference. There was a big banner over the screen that said "The World is Flat," and all the bright, young Internet people watched Friedman talk about globalization and say that technology had flattened the walls of the world. They were enthralled by him and actually managed to stay focused and off their BlackBerries for the entire time he was speaking. Afterwards, instantly, they all turned the BlackBerries back on, and the huge conference room was suddenly illuminated by hundreds of small boxes and orchestrated by the sound of thousands of tiny fingers tapping away.
Friedman, of course, is not just a columnist for the world's most powerful newspaper -- he's something else. He's a panelist. There's an entire population of panelists today, mostly guys, who make a living in some way or another but whose true career consists of appearing at conferences like this. Some of these panelists are players and some are merely journalists, but for a brief moment, the Panel equalizes them all. The panelists perform in front of audiences that include ordinary people, but their real performances are for each other at places like the FourSquare Conference in New York and Herbert Allen's summer CEO-fest in Sun Valley; the panelists' job is to put into perspective whatever conventional wisdom happens to apply at the moment, and to validate it. In fact, these conferences tend to be validating in every way, and it's no surprise that at the last two I attended, there were representatives from Wal-Mart who appeared on stage and were never once asked about the public-relations difficulties their company is currently having over things like not providing health insurance for employees. (At both conferences, though, the men from Wal-Mart were cheerfully asked about their company's policy of requiring executives to fly tourist and sleep two-in-a-room on business trips. Both times the men from Wal-Mart cheerfully replied. Both times the audience cheerfully chuckled along.)
Anyway, the point I want to make is that it interests me that every time I go to one of these conferences, there's a piece of absolutely unarguable conventional wisdom about the Internet that seems sooner or later to turn out to be wrong. It's not easy to be wrong about the Internet -- the Internet turns out to be pretty much everything in the universe. So pretty much anything you say about it is going to turn out to be partly true in some way or another. Nonetheless it turns out not to be.
For example, when I started going to these conferences, it was a given that the Internet was going to set everyone free; this was back in the day, when we understood the Internet to mean email. The world was full of executives and panelists who took the position that it was much simpler to return twenty emails than ten phone calls. But executives now return hundreds of emails every day, and life is not remotely simpler. They return emails day and night. They never go home from their email. What's more, they never absorb almost anything that happens, because the minute it does, their BlackBerries are blinking at them.
When the Dot.com boom began, a new piece of conventional wisdom emerged, along with an outcropping of concomitant panels: the Dot.coms would make us rich. This was true. They did. And then, suddenly the dot.coms crashed. So not quite true.
Time for a new piece of conventional wisdom: there was no money in the Internet. This was confounding: it seemed that an amazing, unheard-of, virtually-religious, completely mystifying episode had occurred in the history of capitalism. A huge business had emerged, but there was no profit in it. Warren Buffett, who is the king of the panelists, the uber-panelist, the second-richest man in the world, the sage of Omaha who plays on-line bridge with the first-richest man in the world, gave a speech during this period, and reminded all his acolytes that between 1904 and 1908 there were 240 automobile companies in business; by 1924 10 of them accounted for 90 per cent of revenues. This sentence was quoted as if it had come straight from the Ba'al Shem Tov, although no one was entirely sure what it meant. Was everyone going to go out of business, or just almost everyone? The guys who'd started in garages would make money, of course -- they'd already made money. The guys who'd invented the technology and the software would be rich. But everyone who'd come afterwards would be doomed -- not just by Buffett's fabulous Reaganesque anecdote but also by the Born Free theology of this brave new world. Many panels were held on this point, and many panelists were thoughtful and interesting (and puzzled) about the bleak future ahead. But one thing was clear: there was no money in the Internet. And advertising was not the answer: advertising would never work because the people using the Internet would never ever accept it. The Internet was free. The Internet was democratic. The Internet was pure. Ads would never fly. What's more, in the TiVo world we now live in, the ads would be blocked by Internet users who would never stand for them.
Which brings me to this conference on the Internet I attended last week, where it will not surprise you to hear that it was suddenly clear that there were billions of dollars to be made in the Internet from advertising. This is the new conventional wisdom: there's a lot of advertising money out there, and all you have to do is provide content so that the ads have something to run alongside of. It crossed my mind that the actual definition of "content" for an Internet company was "something you can run an ad alongside of." I found this a depressing insight, even though my conviction that all conventional wisdom about the Internet turns out to be untrue rescued me somewhat from a slough of despond on the subject.
And by the way, I just want to say that the world is not flat. There are walls all over the Internet and there are walls all over the world. If there weren't, we wouldn't be in this mess in Iraq, where everybody crapped out, not just Tom Friedman.