Esther Dyson writes:
According to the Pew Internet & American Life Project, of which I’m on the advisory board, more than 53 million Americans — or 44 percent of U.S. Internet users — have contributed some kind of digital content beyond private e-mail to the online world. Of those, 21 percent have posted photos, 17 percent have posted text (on a message board or via consumer-feedback mechanisms like that at Amazon), and 13 percent maintain their own Web sites.
The implications for businesses are broad, starting with relatively reduced demand for “asymmetrical” bandwidth, such as cable or satellite, where there’s lots of communication capacity to download content but not much to upload it. People aren’t just downloading music; they’re uploading their own creative efforts.
Aside from communication, this is a whole new source of competition for consumers’ attention.
The trick for businesses is not to compete with user-generated content, but to co-opt it, by becoming the platform where users can post their content and invite their friends to see it. For example, instead of e-mailing my Estonia photos to my mom and friends, I can just send them a link to some provider’s site. And then, of course, if the business model works, more and more of my friends will start sharing and annotating the photos at the same site.
As we live more and more of our lives online, it makes sense that we’d want to decorate our virtual space with photos, just as we decorate our living rooms. From the business point of view, the challenge is to be the real estate that people want to decorate. In real life, that usually requires good schools. Online, it requires good tools.
Of course, there’s always a delicate tension: People want to build online nests in spaces as individual as they are — but they want the validation, and the more broadly shared experience, of a brand name.
AOL, Yahoo! and probably Google (spreading out from its Orkut social network platform) are all vying to support the online neighborhoods of choice.