Increasing Commercialization on the Electronic Frontier
Aaron Kreider, University of Notre Dame
SOC 566 -- Sociology of Consumption
May 11, 2000
Ten years ago, very few members of the public would have been able to predict the rapid growth of the Internet. Back then only an elite segment of the population had any access, but now according to a recent March 2000 Nua Internet Survey estimate, over 40% of Americans and Canadians are Internet users. Along with this general growth in usage, there has been a parallel increase in commercialization. This can be seen in the explosion of newly minted "dot.com" corporations offering their wares to the public, or simply promoting their name in time for a successful IPO (Initial Public Offering) of their stock.
This paper uses a mixture of journal articles, alternative media, and online resources to paint a picture of deepening commercial influences on the Internet. While business to business Internet commerce is a large and rapidly growing market, I focus on how commercialization affects individual consumers. For while business relationships served commercial purposes long before the creation of the Internet, the impact of commercialization on individuals is an additional form of colonization in their life, in an area that was once relatively independent of corporate influences and noncommercial. For instance, this can be seen in the shift in discussions from in-person conversations to corporate-funded email lists.
What impact will commercialization have upon the Internet, the people and the society that uses it? Referring to Habermas’s theory of the public sphere and Marxist arguments regarding the dangers of corporate control of the media, I shall argue that commercialization poses a significant, and overwhelmingly unrecognized, risk to the privacy of individuals and the ability for non-corporate / progressive / anti-capitalist messages to be spread through this new form of media. Corporate-sponsored commercialization challenges the empowering possibilities of the Internet, and threatens to engulf a media that has potential to meet a significant number of requirements of Habermas’s ideal public sphere. Finally while asserting that neither commercialization nor its opposition is assured, I will examine possible future scenarios.Habermas – Public Sphere
The Internet is a new form of media in development. A common framework for evaluating the democratic potential of media is whether, and to what extent, it can be called a public sphere. Habermas defined the public sphere as "a realm of our social life in which something approaching public opinion can be formed." (1974, p. 49 qtd. in Schneider) Keane (1984, qtd. in Schneider) explained more precisely what that would entail, "a public sphere is brought into being whenever two or more individuals, who previously acted singularly, assemble to interrogate both their own interactions and the wider relations of social and political power within which they are always and already embedded."
Habermas’s notion of a public sphere, and his example of the salons of the Enlightenment (17/18th centuries), is limited by its exclusion of traditionally marginalized groups (such as women and the poor). However given that Habermas defined an ideal, not necessarily an achievable reality, how well does the Internet fare? If the Internet is an important public sphere, then any changes to it, such as the growth in commercial use, should be of greater concern than if the Internet was already compromised (and showed less proof of democratic / empowering potential).
Schneider’s (1996) study on the USENET discussion group talk.abortion shows mixed results regarding the Internet’s public sphere potential. On the one hand he argues that "Usenet newsgroups share all the characteristics of the idealized public sphere, and are free from the weaknesses of Habermas’s degenerate public sphere. They are responsive to neither commercial or state pressures; they exist in a space that is essentially owned and controlled by participants; there are relatively low barriers to entry and no obvious distortion effects on the communication." But despite the Internet’s democratic potential, he finds a vast inequality in the number of postings to the discussion group. Between April 1 1994 and March 31 1995, 3276 people posted 46,592 emails. However just one person wrote 11% (or 5000 emails) and the top ten people wrote 40%. While the length of the messages was about equal and did not appear to be proportional to the frequency of posts, it remains clear that one cannot have a quality public sphere discussion which such levels of inequality.
Benson (1996) compares USENET discussion to talk radio. It follows a set of rules, but is highly uncivil with regular flame wars: "These debates are often characterized by aggressiveness, certainty, angry assertion, insult, ideological abstraction, and the attempt to humiliate opponents." The incivility and lack of listening may be a product of how individuals are socialized into a media culture that relies on the five-second sound bite, and stories of either human interest or mass terror to keep the public’s attention. He also recognized some democratizing potential: "On the other hand, the debates might, even admitting these faults, be characterized as displaying a high degree of formal regularity, as robust exercises in free speech, as closely attentive (if unsympathetic) to opposing arguments, as performing virtuosity in argument and language, and as a rare opportunity for free participation in a political forum where one may meet widely divergent viewpoints."
Ward (1997) argues that the Internet is like the Enlightenment public sphere, as it also offers a relatively equality for the privileged few (globally few, though nationally many) who have access. She is skeptical of its potential, though not dismissive.
USENET is one instance of possible communication (and public sphere) channels on the Internet. Other forms of discussion that share many of the uncivil and unequal characteristics of USENET include listservs (especially when not moderated), personal email (especially when sent to people one does not know from outside of the media), web-based discussions (especially if anonymous), instant messages (similar to email), and chats. It’s possible that Internet phone and eventually Internet videophone will come closer to public sphere conditions, by reproducing conditions similar to in-person communication. Finally one should note that, in contrast to hot-button topics like abortion, there are many USENET groups that for years sustain highly civil and productive discussions. Using Habermas’s perspective, the Internet shows both democratic potential and limits that prevent it from attaining the ideal.
A Marxist Perspective
One of the sharpest limiting factors on the ability of the Internet to act as a public sphere is its growing dependence upon corporations. Marxists have done the most in depth analysis of how the Internet is structured and what impact this might have upon the conversations that are heard and not heard. Oskar Negt and Alexander Kluge (1993, ctd. in Poster) add the existence of a radical / non-bourgeois public sphere to that of Habermas’s liberal / bourgeois one. How does the structure of the Internet affect this, often anti-capitalist, sphere?
Bettig (1997) identifies three economic/structural trends that are affecting the Internet, including a concentration of ownership, rent-seeking behavior by copyright owners, and commercialization. He worries about the expansion of capitalism into the Internet. He believes that the federal government, as evidenced by the Telecommunications Act of 1996 which passed Congress with bipartisan votes of over 90% in favor and allowed for greater concentration of media corporations, has been acting as a proxy for corporate interests and willingly privatizing and commercializing the Internet. The reason why corporations are merging at such a great rate is so they can gain strategic control of copyrights and use their presence in multiple media’s to stifle competition and maximize their profits from charging for copyright use. His criticism of copyright is that it rewards corporations who did not create the good (individual workers did), and that it will be used as a barrier to entry. For instance if a company does not have access to news footage, or is charged disproportionately, from one of the national TV networks, then it cannot setup a news website on equal footing. By controlling the Internet media, corporation can make it focus on entertaining people, conveniently ignoring hard realities such as poverty, racism, sexism, and environmental destruction (Kellner 1995). Finally Bettig is worried about how corporations are dominating the main paths of the Internet, and comparing it to the toll-roads; he wonders how many people will venture from the corporate-sponsored sites.
Many Marxists do not take a purely negative view of the Internet. Typical of this mixed approach is Kellner (1995) who believes that technology can either enslave or liberate, and that it is the goal of "the Left" to work for the latter. Recognizing that most media organizations are corporate controlled, and the inherent difficulty of progressives trying to get their ideas across in a media owned by their opponents, radical academics and activists prioritize the creation of an alternative.
While the goal of mainstream media is to maximize its profit and reproduce the hierarchical capitalist system, "In contrast, an alternative media institution (to the extent possible given its circumstances) doesn’t try to maximize profits, doesn’t primarily sell audience to advertisers for revenues (and so seeks broad and non-elite audience), is structured to subvert society’s defining hierarchical social relationships, and is structurally profoundly different from and as independent of other major social institutions, particularly corporations, as it can be." (Albert 1997) Chomsky (1997) argues that the mainstream media is structured so that the only voices that will be heard are those who willingly preach the ruling ideology and that such a propaganda form of media is necessary for elites to "manufacture consent" and maintain control in "democracy." His notion of "agenda-setting media" which wields disproportionate influence over other publications, is of importance for the Internet where industry-concentration is the norm. Together with Herman (1999), Chomsky lays out a propaganda model involving five filters that ensure that progressive views are not heard. For the purpose of this paper, the two most important are "(1) the size, concentrated ownership, owner wealth, and profit orientation of the dominant mass-media firms; (2) advertising as the primary income source of the mass media" (1999). To the extent that the Internet is monopolized and its growth driven by the desire for corporate profit, it is often used as a tool of the elite’s propaganda system, instead of furthering the radical democratic program of popular empowerment.
An alternative future for the Internet, free (or at least independent) of corporate / commercial pressures is possible. Chesney (1996) contrasts the current struggle over control of the Internet with an earlier confrontation over radio. The first radio stations were run by amateurs and non-profit groups, however by the end of the 1920s corporations were ahead. A "reform movement" tried to keep a significant place for non-commercial radio on the spectrum, however it was defeated by corporations with the passage of the Communications Act of 1934 and the creation of the Federal Communications Commission. By contrast to what happened in the United States, in the late Twenties the Canadian government held a series of public hearings resulting in the creation of a national non-commercial network that was later extended to television (Chesney, 1996).
Origins of the Internet
The first form of the Internet, ARPANET, was a network created by the military starting in 1969 to do research into computer networking (not to handle a nuclear attack – that is a common false rumor). The creators of the Internet were motivated by libertarian values that favored the free sharing of information, and seem to stand in opposition to the present era of corporate control. In its early stages the Internet was not commercial, but it was also far from being a public sphere as it was only available to very few people. In addition to the military it was also used for research, and many universities and eventually corporations were connected. Still only ten years ago, the commercial role of the Internet was still relative small. It was used for email, USENET and other discussions, remote logging-in to computers, and file transferring. There were corporations that used it for their own email and/or offered email service to the public for charge, however advertising did not exist anywhere near the level of today. While the Internet was largely noncommercial the government had already, without a public debate, decided to commercialize it (Request for Comments, 1192) and proceeded to do so over the next ten years.
Sources of Commercialization
A. The Obvious
While the Internet consisted of only Telnet, FTP, Gopher, and email, it was not structurally suitable for commercialization. It had not yet reached the mass availability that was necessary for it to be an important corporate market, but this changed in the early 1990s with the introduction of the World-Wide-Web and the graphical web-browser.
Advertisement images are more appealing than mere text. It is hard to attract a consumer’s attention with just words, especially if those words must be in a common font. So when the Internet developed into a form that could easily transmit images to possible customers, corporations pounced on the opportunity to get their message across. The result is the most common advertising form: "the web banner." A web banner is an image placed on a webpage that advertises a product or corporation, and entices the user to click on it to bring them to the advertiser’s website. Recent web banner innovations include animation, imitating a computer error message (Ex. ERROR: Your Internet connection is not optimized!), and provoking a user reaction by offering a prize or asking a question.
Advertising on web banners is a growing and already significant business. According to the Internet Advertising Bureau (ctd. in Emarketer 2000), Internet advertising has grown from $906 million (1997), to $1.92 billion (1998), and to $4.62 billion in 1999. 56% of the 1999 revenue came from banner ads (and another 27% from sponsorships which may also include a clickable advertising image). Leading web-banner firm, DoubleClick, sells advertisements for between 1.5 and 8.5 cents (per view), depending on how much, if at all, they target a specified population.
Confronted with the Digital Divide (an inequality in Internet access by income and race), corporations are lining-up to offer solutions. Most of their solutions require that the consumer already own a computer. One that did not was Free-PC (see Cringely 1999). It distributed ten thousand computers to users, but these were not completely free and the offer has not yet been repeated. In return for two year’s use of a $700 PC, customers had to use it at least ten hours a month, fill-out a long survey to build up a user profile, and were forced to view a irremovable advertising bar that took-up 40% of the screen. Free-PC’s limited offer was designed to do market research to develop effective advertisements, however it is possible that they will show enough ads to make money. If they show five ads at a time, switch them every minute, and sell them for 1 cent each (a conservative figure), then they would make $720. Thus I suspect, unless the market for advertising banners collapses, that there will be more corporations offering free PCs in the future. The only other offers for "free computers" are from companies who require the user to sign a three-year contract to pay $20-$30/month to use a favored Internet Service Provider (ISP). These are definitely not free.
Once a customer owns a computer, thanks to recent developments in commercialization, they can get permanent free Internet access. Free permanent access is a definite improvement from the 100 or 500 free hours of American Online (AOL), which have to be used in the first month. One leading free ISP, Net Zero , reached four million members in March of which 1.8 million were active, and it offers local dialup access in 2500 locations. Like almost all free ISPs it relies upon a built-in irremovable advertising bar, which it used in the last quarter to display 6.4 billion ads. Like most free ISPs it is growing rapidly. Another free ISP, Bluelight, which has marketing agreements with Kmart, Yahoo, and Martha Stewart Living Omnimedia, has grown to 1.5 million members as of April. It relies on web-banners and encouraging users to shop online at its homepage. World Spy which has 200,000 users as of March and expects a million by the third quarter, is the only major free ISP to not use a permanent advertising web-banner. It hopes to make enough money from online shopping.
Net Zero sells itself as offering an array of services to advertisers beyond the traditional advertisement banner. Corporations can buy an "Ad Missile" to "Immediately target a member who is visiting a competitor's site," or a "Defense Shield" to "Advertise over your own site to block out competitors." Net Zero will also sell keywords, so that searches trigger a corporate ad. It also offers "NZTV", a thirty-second video ad that will be shown while the users log-in, or "LaZerMail" where users choose to receive advertising solicitations in their email. And if this is not enough, it also builds a comprehensive profile of its users to improve its ad targeting. Millions of Internet users are being subject to irremovable ad-banners, and are forced / coerced to view around a hundred advertisements each hour they are online.
Once an individual has signed-up for their "free" Internet service, their first priority is likely getting an email account. Probably all free ISPs offer free email either directly or through an affiliate (Ex. Bluelight encourages users to get a Yahoo account). Free email precedes free ISPs by at least a couple years and is used by tens of millions of people. Some of the largest free email providers include Hotmail, Juno, and Yahoo. They make their money off advertising banners.
If one wants to participate in a discussion, one can create a free listserv using services like Listbot, Onelist, Topica, and EGroups which will place advertisements in the bottom of some email messages such as:
Avoid the lines and visit avis.com for quick and easy online
reservations. Enjoy a compact car nationwide for only $29 a day!
Click here for more details.
While this may not be much of an annoyance for one individual, if a list has several hundred or even a thousand users, that is a lot of advertising potential for a corporation.
Web advertisements fund a large array of services which Internet users have come to count on, and have become essential to the Internet’s function. For instance, banner ads fund almost all of the main search engines such as Yahoo, Netscape, MSN (Microsoft Network), GO/Infoseek, Lycos, Exchange, and Alta Vista. Without these search engines users would struggle to find their desired website in a stack of the one billion webpages that now exist. Google, which is currently building up its market-share in the search engine business before adding advertisements, plans to sell its upper-middle class (mean income: $71,000), well-educated (65% BA/BS), mostly professional (73%) users to advertisers whose message will be placed right before all the "hits" from the search are returned. Most users also realize that web banners fund sites that offer "free" webpages such as Geocities which claimed 7.8 million members in March and Xoom which claims 13.5 million. A large portion (possibly a majority) of personal webpages rely upon commercialization and promote the views of corporate sponsors in return for their, now compromised, access to the Internet’s public sphere.
"WebRing: An Internet Marketer's Dream"
(Business Week qtd. in email from email@example.com)
If one wants to promote a webpage by linking up to other similar pages, one can join a webring. Webring.org (which just happens to be owned by Yahoo) claims over 1.5 million websites in over 77,000 rings and dominates the market. It profits by placing targeted banner advertisements on the page which hosts the webring, which users access if they want a list of member sites. It charges between 1.8 and 3.8 cents per general or targeted exposure. "Every ring is a micro-community - a demographic group or interest area - that in turn represents some of the most targeted advertising possibilities on the Internet today." Even decentralized ways of promoting one’s webpage that try to subvert the hierarchical system that search engines use, requires using a corporate-sponsored service. Promises of advertisement-sponsored "communities" driven by corporate profit are of questionable merit to the consumer.
If email is not quick enough, one can use an instant messenger program to track which acquaintances are online and send them messages or chat. Once again the programs are free, but "free" comes at a price. AOL’s Instant Messenger program has fifty million users, and AOL also bought out competing Israeli-startup ICQ ("I seek you"). AOL and Microsoft Network’s Instant Messengers both have large advertisements linking to their homepage, along with numerous menu options (such as "news") that connect users to their web services. Yahoo’s Messenger and ICQ lack the large advertisement, but strongly promote a series of webpages. As an example of the dangers of corporate control, ICQ does not list the most popular search engine, Yahoo.com, though it lists others. As these messenger programs are used primarily for text communication (though audio will become important in a couple year), they require very little effort by their sponsoring corporations and in return promise to integrate tens of millions of people into their corporate recommended version of the web.
As corporations seek to integrate their users into an all-encompassing corporate version of the Internet, the software market is critical to their task. The most important software program is the operating system. Despite the recent hype (and some real growth) about Linux, most computer users have only one operating system and use Microsoft Windows 95, 98, or 2000. With Windows 98, Microsoft chose to integrate the operating system with its web-browser program (Internet Explorer), and by doing so it built in links to various entertainment and news websites – promoting the Microsoft version of the world-wide-web. If a corporation lacks access to the underlying operating system (because it is not Microsoft), it can still integrate advertising into its software. Such integration is still in its early stages (and should be expected to dramatically increase in the next couple years), however one early example is Qualcomm that just released a free "sponsored" version of its popular Eudora email program on Feb. 15, 2000 (which Net Zero will offer to its hapless ad-overloaded subscribers as the preferred program). It comes with a small ad-banner. Another example is Pkzip (a compression and extraction utility) which offers a free version of its program with a larger size ad-banner.
Voice Mail, Fax, Hard Drive Space, and Phone Calls
A final form of advertisement funded services include free voice mail and fax (Ex. www.onebox.com, www.fax4free.com, and www.efax.com), and hard drive space accessible using the world-wide-web (Ex. www.xdrive.com – 100 megabytes, www.freedrive.com – 50 megabytes, or www.mydocsonline – 20 megabytes). Dialpad.com uses Internet telephony (sending the call over the Internet – which can lead to small delays) and even offers free phone calls without advertising, however they are likely doing it for free publicity and to increase their market share so that they can add some form of advertising in the future.
Not only do corporations promise that everything can be free thanks to the technology of web-banners, but they also facilitate the direct involvement of computer users into the independent online buying and selling market. Firstly users have the choice of shopping for almost any good imaginable at online stores. While the integration and transformation of traditional shopping with the world-wide web is powerful in changing consumer behavior, the innovation of facilitating user participation in buying and selling through online auction sites is a larger qualitative shift. Online auctions by radically reducing the transaction costs of buying and selling, and dramatically expanding the number of sellers and buyers allow for everyone to become an Internet entrepreneur. Selling online is much easier than organizing a garage sale, and promises a higher price. As a budding entrepreneur, one can buy a large quantity of a good and try to auction it off at a higher price, or buy and sell collectibles. Ebay dominates the online auction business. It grew from 340,000 to 2.18 million users in 1998 and sold $307 million of goods in the last quarter of that year. Ebay makes money by charging a percentage of the selling price (between 1.25% and 5%) that declines as the price increases. Ebay’s success can be seen in its stock price that skyrocketed from its IPO of 18 to a high of 324, though it has since declined to around 130. Yahoo is trying to gain market share by offering its auction service for free (funded a little by advertisements). Other corporate websites such as Excite are also promoting their own online auctions. One risk for consumers is the possibility for fraud, however it does not appear to be rampant. Another danger is that the auction mentality favors sellers, as prices can be bid-up to irrational levels. Participants in a shortwave radio discussion group (rec.radio.shortwave) were surprised to see the prices paid for old (possibly antique) radios, and even a not-old digital shortwave radio from the late seventies that was sold for $1300, despite being relatively common and only worth between $200 and $300. Online auctions (due to the ease of buying and quick reselling, combined with the concentration of large numbers of people interested in narrowly defined markets) can fuel speculation on niche market collectibles, similar to the historical Dutch tulip bulb bubble.
In contrast to the Internet’s founding philosophy that information should be free, there are recently created websites (Ex. www.inforocket.com and www.AskAnything.com) that allow people to buy and sell answers. A person can ask a question and offer a suggested reward for an answer. Self-appointed experts whose qualifications are listed in their profile, can bid on the question. The asker can choose to purchase any of the answers and then rates the quality of the response. So instead of asking a neighbor, a co-worker, or a local expert for information (or inquiring at one of thousands of email discussion groups), one can avoid having to talk to another person by posing a question by email.
To summarize the extent of corporate sponsored Internet services one can look at the suite offered by Yahoo. With Yahoo one can get a free ISP (Bluelight), free email (firstname.lastname@example.org), free webspace (Geocities), a free search engine, webrings (webring.org), an instant messenger (Yahoo messenger), online shopping or online auctions if the shops does not carry the item one desires. The goal of all this advertising is to promote online-shopping, which reached around $20 billion in 1999 (Nua 2000b).
"Why would I want ads on my computer?
You see ads everywhere. Unless you want to go hide in the hills you aren't going to get away from them. The difference is that in the past, other people have been paid to show ads to you. Does this really make any sense? Why should advertising executives and media people get rich from your advertisement exposure? This is a chance to get a little back from all those companies that usually make money off you."
Get Paid to Surf the Web
If "free" services are not adequate proof for consumers as to the advantages of the commercializing the Internet, corporations have gone one step further by actually paying computer users. The most popular form is getting paid to surf the web. Yahoo lists over thirty places that promise to pay (http://dir.yahoo.com/Business_and_Economy/Business_Opportunities/Get_Paid_to_Surf_the_Web/). In exchange for viewing a permanent web-banner, web surfers get between $0.40 and $0.75 per hour. All Advantage is the largest corporation in this market, having grown to over three million users only a year after its March 1999 start-up, with over 20,000 users joining each day. Like most Internet schemes that pay, this functions on the principles of multi-level-marketing. Similar to a pyramid scheme, a person gets paid a share of the earnings of anyone that joins on their recommendation, down to as many as five levels. This allows people to commodify their relationships with others. One can also get paid to receive advertising emails (www.allcommunity.com and www.extrasalary.com offer $0.03/email). Bepaid.com will even pay users to view full-screen advertising videos – offering a minimum of 16 cents for a thirty-second ad with an additional ten cents if one visits the advertiser’s website. Finally while one is getting paid to surf the web, one can also be earning money ($0.20/hour) by listening to radio (www.radiofreecash.com -- "radio free ca$h: you say you want a revolution?"). These offers are somewhat limited by a maximum number of hours per month that they will pay for, a minimal balance before they pay, and requirements like clicking on some of the ads or moving one’s mouse every sixty seconds.
B. The Subtle
The surface forms of commercialization that have been listed so far are already troublesome in their ability to threaten the ability of the Internet to be either a public sphere or an alternative form of media, but at least it is easy to recognize that a website is being sponsored by a corporate-funded web banner. The direct appeal of web banners is, or should be, obvious to most computer users. Unfortunately, there is a much more complex, and arguably quite insidious, marketing structure that underlies the structure of the world-wide-web and is effectively invisible to almost all users.
The least subtle form of this advertising, is the sale of keywords by search engines to advertisers. By buying keywords, a corporation can ensure that their banner ad will be displayed each time the key word(s) are typed. This can be used to promote their product (Ex. a search for "BMW" on Yahoo comes up with a bmwusa.com ad, or to compete (Ex. searching for "Linux" at MSN returns an advertisement for "Windows 2000 Professional"). The net effect of these advertisements is to promote corporate websites at the expense of non-commercial ones that clearly will not be able to afford a significant publicity budget. Testing out keyword targeting with Yahoo, "sex" predictably led to pornography (and displayed a pornographic advertisement that should not be seen by children), "rap" to Black Entertainment Television, "trees" to www.garden.com, "lesbian/gay/queer" to gay.com, and "woman" to ivillage.com ("Look good in five minutes"). Anyone of these keywords could lead to numerous noncommercial websites, but instead the web banners promote a corporate site with a picture that is more powerful than the textual description that the other sites will get. Combined with the hierarchical index structure that search engines like Yahoo use before returning non-indexed hits, this serves to point users to a corporate / mainstream version of the Internet.
A central problem of advanced capitalism is how to sell an ever-increasing number of products to consumers. The answer lies in using marketing to convince consumers that their desires can be satisfied, and their life improved by buying certain (magical) products. As consumers are saturated with advertisements and grow more resistant to its influences, one solution is to target the advertising to the consumers’ specific interests. The ability to target and maximize a corporation’s publicity budget returns depends upon developing a database of individual profiles so that, for instance, the advertising firm knows which consumers will buy computers and which will buy cars. The more information the advertiser knows about the consumer, the better it can target. And with powerful computer technology is has become possible to develop a very detailed profile of each consumer (whereas before computers one might only have a general profile of BMW buyers, now one can have a profile of thousands of BMW owners or possible owners). Advertiser likes this because it increases their effectiveness and corporations that sell web-space (Ex. Yahoo) like this because they can charge more for the advertisements.
All computers that are connected to the Internet are assigned an IP address which allows them to be distinguished from and communicate with other computers. Computers that are permanently connected to the Internet generally have static IP addresses, while someone using AOL or another ISP would have a dynamic IP address that changes each time they connect. Almost every single website keeps a log of which computers have visited. All of these logs will include the visitor’s IP address, along with basic time/date information, and often the web browser they used and the site they visited before. Corporations (and non-commercial websites if they wanted) could use the IP log to start building profiles on people. A corporation does not need to know one’s name, simply that if, for instance the same IP address visits their financial news webpage about once every day – they have enough information to start building a profile. Thus if that IP address visits another one of their sites, like a sports site, they might display a financial services ad-banner for them.
When cookies were first implemented, it was impossible to refuse them. Since then, the web-user must choose between either refusing all cookies, accepting only cookies that come from the site one is visiting, being given an option to reject or accept each individual cookie, or accepting all of them. Most users will likely choose to accept all cookies, as some webpages will not work without them, and having to choose whether to accept or reject six or more cookies just to visit one webpage is very annoying.
A March 1998 Federal Trade Commission study of 1402 websites, found that 92% of them collected some form of personal information, especially one’s email address, name, address, and phone. Only 14% of the websites had any form of privacy statement (except for the "Most Popular" sites that were warned about the survey in advance – 71% of which had statements).
Privacy statements do not guarantee anything, as witnessed by the case where Geocities was charged by the Justice Department with selling its information and settled not by changing its practice, but by altering its privacy statement (Baekkelund et al, 1998). If given a choice, for instance while installing a new software program, most people click on "accept" or "I agree" without reading the terms of agreement
There is little to no regulation regarding the collection of information, and enforcement generally relies upon consumer outrage. Oakes’s Nov. 30, 1999 article: "Mouse Pointer Records Clicks," explains how an animated mouse which one could add-on to one’s web browser, kept track of the websites one visited. While the company’s intent was to monitor the level of traffic (it charged websites for the service of integrating the animated mouse with their site), the possibility for this information to be used to build profiles shocked some users. Similarly RealNetworks, maker of RealAudio, was found to be communicating information on user’s music listening habits without their permission and stopped once public pressure was applied (Kahney 1999).
Consumers are also at the risk of software bugs or holes that very few people could imagine exist. One such bug allows old implementations of VBScript and Java Script to "obtain information about a user by reading their web caches (pools of recently visited web pages that a browser often keeps for better performance) or reading data about a computer type or the files within it" (Baekkelund et al, 1998). Smith (1999) explains that another technique is that since many email programs, such as Eudora, can read email messages which are in html format they are also susceptible to receiving cookies. One clever use of this software hole is to send a 1x1 image (an almost invisible dot) as part of an email, causing the recipient to get a cookie from the site that hosts the 1x1 image. A company can use their own mailing list or rent a spot in someone else’s spam (a.k.a. mass email), and by comparing the returns from the cookies to their database profiles (many of which would only have an ID number that is not related to a user’s name) they can associate some of their profiles with email addresses. This allows them to possible identify the name of the individual, and link to other non-internet-related profiles if they wish. Both Amazon.com and Barnes & Nobles have admitted to using this.
The possible power of profiles hit me when I was doing test searches at Yahoo (for "BMW" in this instance) and a banner ad asked me if I wanted to move my business to southwest Indiana. Most likely the profile knew I was from Indiana, possibly from looking up local weather.
The power of profiling is most apparent when corporations are granted total access to a user’s web-browsing activities. As a general rule, websites only know whether one has visited pages that they host or are hosted by an affiliated corporation (though in the case of double click this network is extensive), but this is changing. A corporation that provides a user with Internet service can monitor all the websites that they visit and develop a strong profile. Most of the free ISPs are relying upon profiling so they can target the advertisement banners that finance their free service.
For instance, Net Zero ("Defenders of the Free WorldTM.") states:
"Subscribers to NetZero provide basic demographic and geographic information along with data on their hobbies and interests. Based upon this NetZero Profile, sponsors are able to precisely target the exact consumers they want to reach. This win-win situation enables both our sponsors and our members to benefit from ads that have been designed with the members' specific interests in mind." (http://www.netzero.com/advertisements/advertisers.html)
As AOL, a pay-ISP, already collects profiles, one can expect that others are either doing it already or will in the future as more sophisticated profiling techniques are developed.
A user’s experience of Internet commercialization is mediated by their race and class. Already Internet access is strongly stratified by both race and class. According to the 1998 study, "Falling Through the Net," families with incomes over $75,000 were five times more likely than those under $15,000 to have a computer and seven times more likely to use the Internet. Also only 1.9% of black families with income under $15,000 used the Internet, compared to 3.8% of Hispanic families and 8.9% of white ones. If the federal government decides that the free market can solve this inequality, than poor people and racial minorities may be forced to hand over their identities (by permitting profiling in ever increasing detail) to corporations and live with permanent advertisement banners so they can access the web. This may cause a negative feedback cycle, as if the average income of advertisement viewers drops, advertisers will pay less, and the poor will have to view more ads in exchange for access. Richer Internet users will likely be able to opt-out and protect their information by paying a monthly charge for their ISP.
There is not only inequality amongst Internet users, but also a large gap between the most popular websites and the others. Lada and Hubermand (1999) studied the web-browsing activity of 60,000 AOL users on Dec.1, 1997. Excluding visits to aol.com, the top 0.1% of general sites received 32.36% of the "general" visits (with yahoo.com getting the most). Visits to educational and adult sites were more equal, however the top 1% of them still received 15.83% and 23.76% of their category’s total visits respectively. They argue that this shows the Internet is a "winner-take-all" market. The popular corporate sites are getting almost all the traffic and thus almost all of the benefit from the media form. A Sept. 1999 report by Nielsen / NetRatings showed that seven search engines reached over 10% of Internet users each month (Yahoo 43.6%, MSN 31%, Netscape 21%, Go / Infoseek 20.8%, Lycos 15.4%, Exchange 14.6%, and Alta Vista 11.2%). While these and other corporate webpages will receive up to millions of unique visitors per day, non-commercial sites may receive as few as a hundred, while my personal webpage gets about five. Corporate mergers (AOL with Netscape and now with Time Warner, ABC and Disney, AT&T and TCI) or arrangements (Ex. MSNBC – a joint effort of Microsoft and NBC) are creating oligopolies that are restricting competition. When for-profit websites like CNET can spend $100 million on an 18-month advertising campaign, how will noncommercial sites compete (http://www.commoncouragepress.com/course/course_archive_1_35.html, 1999)?
Possible Benefits of Commercialization
Commercialization is not a purely negative influence on the Internet. As the U.S. government is historically non-interventionist it is unlikely that it would do much to offer the services that advertisement-sponsored corporations provide to computer users (Ex. notably free ISP, webpages, email, listservs, etc). And while important segments of the Internet remain free from corporate control, it is better for users to have corporate-sponsored access than to have no access at all. Some of the advertisement-sponsored services are used by progressive, even anti-capitalist groups, that lack the funding to create them on their own. For instance there are many activist listservs hosted by commercial listservers (Ex. United Students Against Sweatshops and the Student Alliance to Reform Corporations have over twenty such lists), many progressive webpages hosted by Geocities, and numerous activists have Yahoo email accounts. Perhaps the corporate influences will moderate the message of these groups, but the effect is likely so subtle as to prove very difficult to observe.
Corporate advertisers can directly fund good causes. For instance www.hungersite.com raises money for the United Nations World Food Programme by having advertisers pay half a cent for each time (max. once per day) that someone views their advertisement. With eight advertisers and approximately 270,000 visits per day, it is generating $4 million annually to feed the hungry. Also successful is www.therainforestsite.com which just started on May 1, but as it is directly linked to the hunger site it is currently generating $400,000/year for the Nature Conservancy to buy rainforest. A less successful, www.environmentsite.org is only earning $2-$6/day to buy CO2 permits (at $2/ton) and thus reduce pollution. Naturally none of these corporate-funded approaches present anything more than band-aid solutions to systemic problems, so their overall value is questionable.
Online shopping can also benefit non-commercial (and/or progressive) organizations who are often very hard-pressed for funds. They can market their goods (Ex. buttons, books, T-shirts, etc) online, or they can affiliate with another online-store (either progressive or not) that will give them a percentage for any revenues that they generate. For instance greemarketplace.com sells environmentally friendly products and gets much of its business from affiliates who get 4% or 10% of the sale price, and greatergood.com donates up to 15% to one’s favorite charity.
Sixty years after the corporations won control over most of the radio spectrum, illegal non-commercial ("free" or "pirate") radio stations started popping-up all over United States. The same technological developments that permitted for large corporations to cheaply operate national networks, allow people, who have used the Internet to network, to set-up their own FM radio station for only a couple hundred dollars. With thousands of radio transmitter kits sold and possibly a hundred illegal stations in operation, the Federal Communications Commission decided it had to create a low-power license that would open the FM band to new non-commercial stations (however Congress is threatening to overturn the FCC’s decision).
Likewise the battle for the control of another form of media, the Internet, is even further from being settled. The Internet has made it very easy to copy information and thus to avoid paying for copyright software. It only takes one person, perhaps in a country that does not strictly enforce copyright laws, or on a website with a lax enforcement of its policies, to post a copy of Microsoft Office or another expensive software package to cause that corporation to risk losing millions of dollars in revenues. With the development of the worldwide web, one can now locate pirate software by doing a search for "warez", "appz" or "gamez". Often the sites that host the software or have a link to it, make their money from banner advertisements (primarily pornographic ones as they pay the most). An even greater threat to the commercial software corporations comes from programs like Napster and Gnutella that create large decentralized networks by connecting thousands of users that are able to share and download any files that they choose. While Napster focuses strongly on sharing music files (mp3s); Gnutella supports any type of file thus implicitly allowing for the sharing of pirated software. Gnutella is built to support multiple servers, and thus will prove hard to shutdown. When I last tested the programs, Napster had over two thousand users, sharing 380,000 files (likely many duplicates), taking up 1,500 gigabytes of space. By contrast Gnutella had over three thousand users, sharing 370,000 files, taking up over 2,600 gigabytes.
In wake of this resistance, corporations are fighting back to protect their copyrights (Wolverton 2000). Last Fall Ebay stopped selling software and some music due to charges of piracy, after a Software & Information Industry Association study that found 60% of software was pirated on Ebay, Excite Auctions, and ZDNet Auctions. Also in December the Recording Industry Association of America sued Napster for facilitating music piracy. Lawyers for Metallica recently presented Napster with a list of over 335,000 people who had likely broken the music piracy law over one weekend, asking Napster to bar them from its service.
One possible solution to avoiding corporate-pressure is a group effort to design a "Free Network" (http://freenet.sourceforge.net/). While is very unlikely to ever replace the Internet, it promises "decentralization" through the elimination of IP addresses and the centralized Domain Name System (which allows one to use names like www.revolution.com instead of numbers such as 18.104.22.168) and "anonymity – of both the source and consumer of information." Each node that joins volunteers disk space, and files are distributed across the network with multiple copies stored so that is very difficult to remove something from distribution. As information does not have a readily apparent (or traceable) source, and is somewhat randomly spread across the system, one is not directly responsible for any "illegal" information that might be hosted on one’s system.
Another alternative to commercialization is the freeware movement. Its most famous product, Linux, is still a free operating system that anyone can download off the Internet. However in the past year billions of dollars has been made (and likely lost) from the commercialization of Linux when several Linux-related companies did IPOs. Red Hat, which makes its money by packaging and selling copies of Linux (which could be downloaded for free), offered some stock at the special IPO price to Linux programmers, allowing them to profit as its stock rose 270% in the first day and another 60% in the following two days (though it has since fallen back to just a little above its IPO price) (Eisenberg 1999).
The Internet and the commercial component of it are growing at such a great rate that it is difficult to imagine what it will look like only a couple years from now. Will Internet commerce lead to utopia? Will everyone be able to buy at the cheapest imaginable price, and sell at the top? Will consumers finally get perfect or near perfect information about goods? With virtual-reality will consumers be able to feel, hold, and one-day even "try-on" on-line goods thus drastically reducing the need for real stores?
With further deregulation and increased monopolization, it is conceivable that consumers of the future may get phone, Internet, TV, videos, banking, insurance, help with their taxes, and on-line shopping all from one conglomerate that will charge them in e-cash. Another possibility is expressed by Burnham (2000), who argues that decentralized programs like Napster might replace large sites like Ebay’s online auctions with distributed services that are run by a collective of users who choose to connect to each other. Practically anything could be distributed (news, entertainment, search engines, radio stations, software creation, music) assuming that members of the public are capable of producing it themselves and are willing to share. With millions of people setting up websites and writing billions of emails with strictly non-commercial (a.k.a. "sharing") purposes, and technological progress that makes it easy to make a video, record a song, or publish a newsletter/newspaper/e-zine -- it is possible that this realm of activities may be extended. What would happen if only 1% of news junkies stopped watching and started to make news? If 1% of people who made music for fun released it on the Internet for free? What if 1% of poetry writers created a noncommercial distribution network?
Currently commercial forces are winning the struggle for control. They are threatening to build a corporate Internet where people can entertain themselves and even interact, without risking encountering alternative / radical ideas – unless they choose to do so just to see how "misguided" the crazy critics of corporate power are. Most Internet users do not remember when there were not any advertisement web-banners, and soon most will wonder why anyone ever questioned the corporate concentration and merger-mania that is on-going.
As the Internet rapidly grows, it will soon become the dominant form of media and possibly a dominant form of consumption. I have shown the pressures of commercialization, however it is critical for academics to study what impact this has on content and use. There are many other issues that need study. Is the commercialization of the Internet just "more commercialization," just an extension of that seen in newspapers, radio, and television? Or, perhaps due to the technical possibilities for individual targeting / profiling, is there a qualitative difference? How much of an idea do consumers have of what is happening, for instance with profiling, and do they care? What changes would the Internet need to make to follow the principles of different theoretical perspectives such as Marxism, Feminism, Environmentalism, Anti-Racism, and Anarchism?
Adamic, Lada A and Bernardo A. Huberman. "The Nature of Markets in the World Wide Web." ftp://ftp.parc.xerox.com/pub/dynamics/webmarkets.pdf, May 6, 1999.
Albert, Michael. "What Makes Alternative Media Alternative? : Toward a Federation of Alternative Media Activists and Supporters — FAMAS," Online Z Magazine, http://www.zmag.org/zmag/articles/albertoct97.htm, October 1997.
Austin, S. Email message from email@example.com. April 3, 2000.
Baekkelund et al. "A Framework for Privacy Protection." http://www-swiss.ai.mit.edu/6095/student-papers/fall98-papers/privacy/privacy.html, 1998.
"Banner Year for Web Ads", http://www.emarketer.com/estats/041900_iab.html, April 19, 2000.
Benson, Thomas W. "Rhetoric, Civility, and Community: Political Debate on Computer Bulletin Boards." Communication Quarterly, 44(3), 359-378, 1996.
Bettig, Ronald V. "The Enclosure of Cyberspace." Critical Studies in Mass Communications, 14, 138-157, 1997.
Burnham, Bill. "Napster: Net Market Destabilizer?" http://www.zdnet.com/ecommerce/stories/main/0,10475,2562799-2,00.html, May 5, 2000
Chomsky, Noam. "What Makes Mainstream Media Mainstream." Online talk, http://www.zmag.org/zmag/articles/chomoct97.htm, October 1997.
Cringely, Robert. "There is No Such Thing as a Free PC." http://www.pbs.org/cringely/pulpit/pulpit19990211.html, 1999.
Eisenberg, Rebecca Lynn. "Red Hat's special offer to Linux coders." http://cbs.marketwatch.com/archive/19990814/news/current/rebecca.htx, Aug 14, 1999.
"Falling Through the Net: Defining the Digital Divide." Online Report, http://www.ntia.doc.gov/ntiahome/fttn99/contents.html, 1999.
Federal Trade Commission. "Privacy Online: A Report to Congress." http://www.ftc.gov/reports/privacy3/toc.htm, June 1998.
Herman, Edward and Noam Chomsky. "Background on the Political Economy of the Net: Manufacturing Consent on the Web" The Political Literacy E-Mail Course, 1 (30), http://www.commoncouragepress.com/course/course_archive_1_30.html, 1999.
"The High Price of Auctions." http://yahoo.cnet.com/news/0-1007-201-338739-0.html, Feb. 24, 1999.
Kahin, B, ed. "Commercialization of the Internet : Summary Report." Request for Comments, 1192, Nov. 1990.
Kahney, Leander. "RealNetworks Probe Begins." http://www.wired.com/news/technology/0,1282,32250,00.html, Nov. 1, 1999
Kellner, Douglas. "Marxism, The Information Superhighway, and the Struggle for the Future." Humanity and Society, 19(4), 41-56, 1995.
McChesney, Robert W. "The Internet and U.S. Communication Policy-Making in Historical and Critical Perspective." Journal of Communication, 46(1), 98-124, 1996.
Nielsen / NetRatings, http://www.searchenginewatch.com/reports/netratings.html, 1999.
Nua Internet Survey, http://www.nua.ie/surveys/how_many_online/index.html, March 2000.
Nua Internet Survey (b), http://www.nua.ie/surveys/analysis/graphs_charts/1999graphs/b2c_spend.html, 2000.
Oakes, Chris. "Mouse Pointer Records Clicks." http://www.wired.com/news/technology/0,1282,32788,00.html, Nov. 30, 1999.
Poster, Mark. "Cyberdemocracy: The Internet and the Public Sphere." in "Virtual Politics: Identity and Community in Cyberspace" ed. By David Holmes, Sage: Thousand Oaks, 1997
Schneider, Steven M. "Creating a Democratic Public Sphere Through Political Discussion." Social Sciences Computer Review, 14(4), 373-393, 1996.
Smith, Richard M. "The Cookie Leak Security Hole in HTML Email messages." http://www.tiac.net/users/smiths/privacy/cookleak.htm, Nov. 30, 1999
Ward, Irene. "How Democratic Can We Get?: The Internet, the Public Sphere, and Public Discourse." Journal of Composition Theory, 17(3), 365-379, 1997.
"Who's Using Google?" http://www.google.com/adv/demographics.html
Wolverton, Troy. "Nintendo, EA, Sega Sue Yahoo." http://www.gamecenter.com/News/Item/0,3,0-3938,00.html?tag=st.cn.sr.gc.1, March 29, 2000.