By Kevin Werbach In 1883, a volcanic eruption produced a devastating tsunami that killed tens of thousands. As Simon Winchester details in his fine book, Krakatoa, the new technology of the telegraph allowed people around the world to learn of the disaster immediately, magnifying its historical significance.
Fast-forward 121 years. The recent Asian tsunami, also caused by seismic event near Indonesia, highlighted a similar revolution: The ability not only to receive information, but to respond in real time. In the two weeks following the disaster, nearly 200,000 customers of Amazon.com (AMZN) contributed $15 million to the American Red Cross relief fund through a link on the site's home page. Other leading Web sites had similar efforts. That couldn't have happened just a few years ago.
10 MILLION VOICES. Something powerful is at work here: The explosion of the global digital "back-channel."
Take one of last year's hottest technologies: Personal publishing sites known as weblogs or blogs. Blogs gained notoriety for their political coverage, but that's only the tip of the iceberg. Technorati, a blog search engine, now tracks 6 million blogs, with over 12,000 added daily, and that's probably only half the total.
A technical standard called RSS and a new class of software called aggregators link the postings on those blogs together into a massive virtual global conversation, known as the blogosphere. In cyberspace, 10 million people can talk at the same time?nd every one of them can be heard.
TALKING BACK.?Smart companies, including Sun Microsystems (SUNW) and GM (GM), are starting to use blogs to facilitate conversations among their executives and customers. Marketers are learning to track comments about their companies on blogs, and to target influential bloggers the same way they target professional reporters. And companies such as Google (GOOG), which acquired the popular Blogger publishing tool, are exploiting blogs not only as a business opportunities, but for internal collaboration and communication as well.
I've seen the value of the digital back-channel close up at Supernova, the emerging technology and business conference I organize, which actively facilitates blogging. The virtual discussions, ranging across dozens of attendee blogs, real-time chats, and shared collaboration spaces, enrich the live, on-stage presentations. They also provide an annotated record of conference discussions, useful even for those attendees who prefer not to bring a laptop to the sessions.
The back-channel has important implications for commerce as well. Traditionally, customers were limited to information about products communicated by a small number of producers and distributors. This information asymmetry produced the familiar economy of "hits," with a few big sellers dominating.
Online, however, lower distribution costs mean customers can access a much broader range of products. And those customers can communicate back and forth about which products they like, either through their own social networks or through recommendation tools such as Amazon.com's reviews or TiVo's (TIVO) user ratings for television programs.
NICHE MARKETS. The result is a significant shift in sales patterns, toward what Chris Anderson, Wired's editor, calls the "long tail." A majority of the streams that online music service Rhapsody delivers every month are outside the 10,000 most popular streams.
Only half of Amazon.com's sales come the 130,000 most popular books the site offers, roughly the inventory of a large bricks-and-mortar bookstore. E-commerce makes it feasible for Amazon.com to sell books that wouldn't fit into a physical bookstore. Yet it's the back-channel of recommendations that helps users overcome information overload and find those niche products.
Perhaps the most powerful example of the back-channel in action is Google. The core of its search technology is its use of Web-page links to identify quality results. By mining what people point to, Google's algorithms turn the 8 billion pages in its index into a vast, decentralized recommendation engine. Furthermore, in addition to Blogger and its more than 1 million blogs, Google also owns Picasa, a tool for sharing digital photos; the largest database of Usenet discussion board postings; and GMail, a fast-growing Web-based e-mail hosting service. These are vast haystacks of user expression, ripe for Google's technology to comb through in search of needles.
GLOBAL CHATTERBOX. For all this, the global digital back-channel is in its infancy. With cable-TV operators and technology vendors like Microsoft (MSFT) making a big push into the digital video recorder market pioneered by TiVo, television is poised to flip from an archetypal one-way broadcast service to a Web-like interactive model. A growing percentage of those digital video recorders can pull content from the Internet as well. And last year, over 150 million camera-enabled mobile phones were sold, a number expected to grow to 500 million in four years.
By the end of the decade, therefore, a billion people will have the ability to contribute not just text but photos and video instantly to the global virtual conversation. The results will echo throughout society, as did Krakatoa's long-ago explosion. Kevin Werbach is an Assistant Professor at the Wharton School, University of Pennsylvania, founder of the Supernova Group, and the organizer of the Supernova Conference