Information’s Price Tag
The hacker credo “Information wants to be free” set the stage for the
second golden age of the internet. The origin of the phrase is worth
reviewing. First proposed by Stewart Brand, the founder of the Whole
Earth Catalog, at the 1984 Hackers Conference, his formulation was:
On the one hand information wants to be expensive,
because it’s so valuable. The right information in the right
place just changes your life. On the other hand, information
wants to be free, because the cost of getting it out is getting
lower and lower all the time. So, you have these two fighting
against each other.^10Information, like the rest of us, desperately wants to be attractive,
unique, and well paid—really well paid. Information wants to be
expensive. The most successful media company in America, other than
Google and Facebook, is Bloomberg. Michael Bloomberg never fell for
it—giving information away. He mixed other people’s information with
proprietary data, added a layer of intelligence and—here’s the trick—
made it scarce. It was expensive and had its own vertical distribution
(storefronts) in the form of Bloomberg terminals. If you want breaking
business news that might impact the price of a stock in your portfolio,
you sign up with Bloomberg, get a terminal installed in your office,
and soon the screen is rolling with an endless flow of news and
financial data.
The “information wants to be expensive” part of Brand’s quote
seems to have been erased, like Trotsky from photos, by firms looking
for content for free. Indeed, it was the tension between the two that
Brand was interested in, and it was in that tension where he foresaw
innovation. Google (and Facebook in a different context) has mastered
that tension. It takes advantage of the declining costs of distribution
by giving its users access to a world of previously expensive
information, then extracts billions in value by being the new
gatekeeper.