Bird Watching for Nerds: The splintering of the Internet

The splintering of the Internet. Say it out loud. Let it roll off your tongue.

I like this topic for much the same reason I like horror movies. I cannot look away, even though the action turns my stomach. And, though I am not a sadist, I want to see the plot play out — I am just a little curious to see who gets an axe and who escapes the chain-saw.

In short, watching the splintering of the Internet is a version of bird watching for nerds, with a bit of Hitchcock thrown in.

Ben Kunz suggests a label for the phenomenon — calling it the rise of the “Splinternet” — and he tried to popularize it recently in a Business week article. He borrowed the phrase from Josh Bernoff, a well known analyst at Forrester (and Kunz gave Bernoff ample credit).

Any short and self-explanatory label beats a long and confusing one, so the splinternet has much to recommend it as a label. There also have been many less snappy labels proposed for this phenomenon. This one is snappy.

But, if you look closely, this one is a bit confusing too. My goal is to unpack the label in this post.

Let me rephrase that, and signal where I intend to go. The Internet should no longer be called a “network of networks”, as it was called two decades ago. That era has passed. Commercialization has brought with it a new structure, a “network of platforms”. The splintering of the Internet describes the results of platform competition on the Internet.

Sometimes it resembles a horror movie. It is not all bad, however. This requires explanation.

The grocery scanner and barcode economy

Think about the world of bar codes and scanners. What was life like before their invention? This post offers an appreciation for this staple of modern retail life.

Give the barcode its due. The widespread deployment of barcodes and scanners reduces the costs of keeping accurate and timely inventories. It happened quietly in the last few decades and had numerous consequences.

Think about it. The number of products on the shelf of a typical retail store has increased by tens of thousands. The accuracy of cashiers has increased tremendously because the cashiers do not have to pause to read the price tag. Firms keep better inventory so the frequency of stock-outs — missing items — also has declined.

More to the point, all of that happened because somebody took the time to develop the bar code. Somebody made effort to get everyone in the industry to invent the equipment to take advantage of barcodes.

Among the influential people in that effort was a fellow named Alan Haberman. He passed away last week.

I never knew the man, so I cannot wax eloquent about his life. But I know something about bar codes, as well as the economics of value built around such symbols. Modern life could not exist without them. That is why this post is not a eulogy. It is an appreciation.

It would be an exaggeration to say that barcodes set me on my life’s intellectual path, but they were an influential example when I was a fledgeling and impressionable scholar. The bar code was one of the three canonical examples of the new era unfolding before us in the 1980s, a world of new standardization and increased interoperability. (VCRs and PCs were the other two). Those three examples, as well as a few others, did motivate my interest in the economics of this phenomenon. As readers of this space know, I have stayed here because new examples arise all the time, and in such diverse areas as WiFi, travel intermediaries, the MP3 player, smart phone, and in many places online.

Alright, maybe I am (a little) nuts, but read on.

In appreciation to Haberman’s life’s work, this is an opportunity to wax on a bit about the joys of the scanner economy. Once you begin to recognize the economics of bar codes, you realize that these economics are everywhere.  I hope you find this interesting, illuminating, and a little amusing.