Kevin Werbach offers an explanation for the emerging world:
Something tells me the model of the Internet and communications world we’ve followed since the early 1990s may be falling appart.
The concept is that connectivity, applications, and content are distinct technical, business, and regulatory spheres. I’m one of the culprits, as an advocate of the “layered model” for Internet policy. But if you go back to Mary Meeker’s seminal “Internet Report” in 1995 (written, she told me, because so many prospective investors she met on the Netscape IPO road show were completely clueless about the Internet), you’ll see the same pattern: infrastructure businesses (ISPs), application businesses (search, advertising, and e-commerce), and content businesses. The only company that seriously spans all those markets today is AOL Time Warner… and look where it got them.
Soon, though, most of the major Internet players are likely to be hybrids of two or more layers. Google and eBay will be infrastructure and applications; Yahoo! and News Corp. will be applications and content; telephone, wireless, and cable operators will be infrastructure nad content; Microsoft and Time Warner will span all three levels. And that’s just what we’ve seen announced so far. In this market, everyone is in play.
It does sound as though all of us excited about the “Web 2.0” vision of open standards built on top of open standards, facilitating mashups and lightweight innovations all around, might want to question our assumptions. Yes, that is where we have been heading, but it might not be where we ultimately go. If GoogleNet, SkypeBay, MSAOL, Telco Fiberia, and CableLand emerge as competing integrated fiefdoms, we’ll see something more like the early 90’s online services, albeit on a much bigger stage.