I only have two planned posts left in this series. One’s about the user interface and one’s about making money. I really wanted to do the user interface one next, but I’ve seen from comments and emails that the other one is needed more.
(To recap, this is a series of posts I’m doing on what I believe to be the future of the Internet: an open source, decentralized social network that is the basis for online identity. In part one I talked about the Internet pervading our society in new and revolutionary ways, in part two I talked about how everyone’s online identity needs to be tied to their own personal domain names, in part three I talked about how a URI is at the center of any new social identity system, in part four I talked about how the endpoints on the social identity network need to operate for maximum flexibility, and in part five I talked about the way authentication and security will change when everyone runs their own network endpoint. And I think I’m going to use the term "social identity" to talk about this concept from now on, because I think the concept of social networks and online identity are too closely intertwined to separate into two different terms.)
This post talks about making money from the system. I will admit, I do plan to make money from it, but probably not in a way you’d think. And if anyone else wants to, they can play as well. You’ll have to bear with me on this though, because there is still a lot of legal groundwork to be laid before any of this can come to fruition, not to mention getting the application itself running.
The reason I need to talk about the money aspect is because I think a lot of people are going through a lot of unnecessary complexities trying to mentally dance around one key concept that I’ve been trying to hammer home but obviously failing at. In a lot of the comments I’m getting, people seem to be shying away from the fact that I want every single person to run their own private server (at their own domain, although a lot less people seem to have issues with that for some reason). They keep coming up with work-arounds for it and other scenarios where people don’t actually run their own server. Identity federation schemes, address routing, and all kinds of complex ideas like that. I see that I need to explain the business model before people can get past that point.
But I will repeat again, I believe every person in this social identity network needs to run their own server at their own domain (and here I am NOT talking about backwards compatibility with other identity systems, the need for that is a given in my opinion). I’m not interested in workarounds for this idea, I believe it’s the way things need to work. However, this does not mean that every person needs to run a server off a desktop in their basement, or from their laptop. It would be naive and frankly asinine of me to suggest such a thing. People will of course run them virtually, not physically, and they won’t pay a dime for them if they don’t want to. This is nothing new–in case you haven’t noticed, there is quite a large industry blooming in non-premise based software (aka hosted software, like Salesforce). All I’m talking about is making that software open source, and turning the software providers into service providers. Obviously I plan to start the first service provider, but there’s absolutely nothing stopping someone else from starting a competing service provider.
One thing that’s very important is that you don’t have to host your own servers to run your online presence. I consider this blog to be my primary online presence, yet TypePad hosts it for me. However, I permanently own the content and can take it elsewhere if I want, because I own my domain name which is the gateway to this site. If my blog was located at jasonkolb.typepad.com, my online identity would be forever tied to TypePad. The solution, of course, is to give everyone a domain name (as I talked about in part two), and allow them to choose where it points–it’s an address to their online identity. Some people may choose to point it at their MySpace account, that’s fine. But if they decide to upgrade at some point, the intellectual capital and reputation they built up around that address handle would be transferable to the new location. All that’s needed is software that’s designed to support multi-tenancy, like a MySpace or TypePad, so that more than one user can be run on a single server to conserve resources.
So the real question then is, what is that multi-tenant software located at the other end of that domain name? Is it MySpace, or LinkedIn, or a blog? I don’t believe it is, and I’ve talked about some of the architecture of the application in previous posts. I plan to talk about the user interface next time. I think it will allow the network to be much richer and more useful than a network of MySpace pages or blogs.
So if people aren’t going to actually host the servers themselves, how and where will they run, and who will pay for them? I believe they’ll be hosted in the same way as Web sites are today–by service providers. The business 
model for service providers is all over the map, but what I’ve been toying with is a hosting service that offers a free version with provider-run ads (like MySpace) or a revenue-sharing model (which I don’t believe exists yet), and an ad-free version for $4.99 a month or whatever makes sense (I have not done the research on the numbers yet).
But now for the interesting part, and what I believe will be one of the real killer applications for this network. Can you tell me where the advertising revenue from my little cousin’s MySpace page goes? It goes, of course, into MySpace’s bank account. That’s why Fox News paid $580 million for it.
But what happens when my little cousin owns her online presence herself? Instead of the advertising revenue going to a MySpace, she can either share the revenue with a service provider who hosts her site for free, or she can pay $4.99 a month and keep it all herself. People could be up and running and potentially generating money in their pockets within minutes, simply by being themselves.
To me, that’s the killer feature–the fact that the user can profit from their identity now instead of a middleware company called MySpace or LinkedIn. And I’m not just talking about advertising revenue either. Because the system is built on top of a data store, the individual has possession of their historical data as well. I can see nothing that would prevent somebody being paid to share their data with a company doing a marketing survey by simply allowing the company access to certain parts of their data.
Another place where this thing can make money is on the software side. In fact the original reason why I wanted to build this network was to write applications on top of it. I originally wanted to write an enterprise project management application that would integrate with the user’s universal inbox and task list at their domain so that I could look at ALL of my tasks and ALL of my contacts and ALL of my appointments and ALL of messages from the same place instead of 20 different places for each function I do. These value-adds could certainly be commercial and paid-for–I think the integration between personal and professional data on the personal side makes it more than worth it by itself.
But now here’s an idea that really excites me. I realize there’s a lot of groundwork to be laid before this is possible, but please indulge me for a moment. I think it’s worth it.
What if someone (I would be first in line to volunteer) were to freely host this software for underprivileged sections of the country and world? Someone with nothing but the clothes on their back in the physical world would be able to set up an online presence with a $100 laptop, or a visit to the library. Wouldn’t that be something, to allow somebody with nothing more than the ideas in their head to generate content and make money from them online? I know I would be interested in looking at the life of a homeless person in Chicago, or an inner-city child in LA. To me that says that there is a viable audience for the content they could create. Shouldn’t they reap the financial benefit of putting out generating valuable content rather than MySpace?
I can foresee a time when children can save money for college just by networking with their friends and being paid advertising revenue from the eyeballs they send to their site. This is obviously years out and the legalities are pretty hairy, but I think it’s a pretty worthwhile goal to shoot for. In a world where social networks like Netscape (wow that still sounds weird to say) are already paying top content producers, is it really that much of a leap?
Next time I promise to actually get around to posting about the application itself, along with some screen mockups. I’m only about three or four posts late now 
