geert lovink on 15 Feb 2001 13:21:48 -0000

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<nettime> Jon Katz: The Myth Of The Tech Slump

(in this interesting essay, slashdot editor jon katz reinterprets the
current fall of the dotcoms as a possibility to go back to basics. the great
internet inventions did not come from the industry anyway. true, but what
jon katz perhaps does not ask is the role of hackers and geeks inside both
start-ups and larger organizations these days. are programmers really slaves
of the capital, passive victims of CEO agendas? if geek culture did not
benefit from the hyped-up internet boom, then why was there hardly any
protest or resistance against the new economy craze? anyway, everyone is
happy that's it all over. /geert).

The Myth Of The Tech Slump
by Jon Katz, posted on, Thursday January 18, 2001.

The latest media-transmitted meme about technology and the Net is that the
tech world is in the midst of a slump. This is true only if you define
technology's overall status by dotcom stock prices. If the dotcom era is
really over, good riddance. Maybe we can forget about dog and cosmetic
sites, venture capitalists, copyright and lawsuits for a bit. Some of the
tech world's most interesting innovations -- from the Net and Web to mom and
pop online retailing to countless individual web pages to file-sharing to
Freenet to P2P programs, AI to gene mapping -- have been developed far from
venture capital cash.

The outside world has always viewed the Net in terms of its most simplistic
extremes: First it was a hive of hackers, then the world headquarters of
pornography, and more recently, the corporate pot of gold. The rise of the
dotcom era gave birth to the notion of the Net as the locus of the new
global economy. While there is some truth to that notion. the end of the
dotcom era is spawning now the latest variety of hype: the Tech Slump.

If you define the purpose or utility of the Internet strictly in terms of
business (which mainstream media do, when they're not obsessing on porn) --
new equipment orders, consumer spending on telephone data services, the
exact state of the NASDAQ on any given day -- then there's inevitable bad

Nothing can mask the awful truth about tech spending, Business Week reported
recently. "In recent days, networking-gear maker 3Com, PC maker Gateway, and
chipmakers LSI Logic and Xilinx, and electronics retailer Circuit City all
warned that earnings will fall shot of expectations, knocking their stocks
down as much as 36 per cent. Then, on Dec. 5, Apple Computer Inc. dropped a
bomb, saying that slower-than-expected PC sales will vaporise $600 million
in fourth-quarter revenues from its original estimate of $1.6 billion."
These unexpected turns, says Business Week, are certain to reverberate
through techdom, forcing consolidations that will extend well beyond the
already tottering dotcoms. "Unable to survive past the easy-money days," the
magazine concluded, "a lot of companies, from niche e-tailers to the
umpteenth optical-networking upstart, will simply vanish."

Corporate predators are buying up the stock of imploding dotcoms, selling
them off at bargain rates. There are now no-frills "shut-down" parties in
New York and San Francisco instead of lavish start-up fetes. The media is
filled with reports of mounting tech layoffs and bankruptcies.

This is an era that won't be mourned by many. If ever there were an unholy
marriage, it was the frenzied coupling of venture capitalists and dotcom
entrepreneurs. It had to end sometime, and now is a good a time as any. The
dotcom era distorted the purpose of technology and the promise of the Net,
flooded the Net with intrusive scrutiny, legislation and information
barriers, focusing some of the best tech minds on making useless junk and
obscuring the beneficial possibilities of networked computing.

Bankers are finally demanding that the companies they lend to earn profits.
That doesn't mean technology itself will collapse, or that the Net and Web
are in for bleak or uninteresting times.

In fact, that's a foolish way to gauge the rise of fall of technology, the
state of the Net, or the vitality of either. The network is growing by the
day, all over the world. More than half of the U.S. population now has
access to computers at home or work, making computing the fastest-growing
technology in history, and companies like Ford, Delta and Intel are giving
away computers as employee benefits. There is no significant social or
cultural group, from blacks to Hispanics to the elderly, with the notable
exception of the impoverished underclass, that isn't moving rapidly online.
E-mail has become a universal personal and business communications tool.
Hard pressed to function in the Corporate Republic, WalMart-driven world,
hundreds of thousands of small retailers have moved online, re-creating mom
and pop stores on the Web.

And search engines and ISPs have given many thousands of people free and
customisable web pages, sparking a culture that is expressive and
personalised, and which offers mind-boggling marketing opportunities.

Some of the most creative and significant evolutions in the recent life of
the Net -- the early search engines, Napster, Linux, Gnutella, Freenet,
instant messaging systems, the World Wide Web itself -- were developed far
away from the cash or even the notice of the dotcommers and venture
capitalists. The Net, in fact, was created in the first place mostly by
non-profit researchers.

Its purpose, according to J.C.R. Licklider, the Defence Department official
who commissioned the early research that led to the Net: "Creative,
interactive communication ... a dynamic medium that can be contributed to
and experimented with by all." Licklider hoped for an open, distributed,
educational and intensely interactive medium, a vision shared by architects
of the Net like Jonathan Postel and by millions of people online, including
hackers, and many of the participants in the open source and free software
movements. If the end of the dotcom era means getting back to work on those
kinds of ideas, the tech slump will be a boon.

One could argue that the last few years have actually been the least
interesting, productive and satisfying period in the Net's brief history, as
corporatists swarmed all over the network, spawning legions of lawsuits,
curtailing the free flow of information as much as they could manage,
lobbying for noxious new copyright laws, funding inefficient, ill-conceived
companies and all kinds of technologies which skirt the line between useless
and ubiquitous.

The real legacy of the dotcom era could be 800 numbers that are never
answered, the help that's always promised but rarely comes. Plenty of the
dotcoms seem of dubious value. Americans are in no particular rush to get
their e-mail on the freeway rather than at work a half hour later, or to
transform their TVs into personal programming networks. More than 95 per
cent of all Americans don't even have broadband, and aren't likely to get it
anytime soon. Is the Net era over because there is one place to buy dog food
online, instead of two or three?

The history of technology is filled with periods of great advance and
upheaval, followed by retrenchment and consolidation. We may be heading into
one of the latter.

There's no evidence that business or retailing has failed on the Web, or has
no future there. One day, some of us may live long enough to see Amazon turn
a profit. Catalogue companies like LL Bean and Lands End are successfully
incorporating e-shopping into their business plans. E-trading sites have
revolutionised consumer trading and are making money. Sites focused on the
liberation of sexual information and imagery are among the busiest and most
profitable sectors of the Net, anything but declining. Open media sites like
Napster or like this one, sites devoted to open source distribution of
textbooks and reference materials, are thriving. Peer-to-peer decentralised
information models like Gnutella and Freenet, while still primitive and
intensely geeky and difficult, represent revolutionary software and
communications advances.

Must we mourn the loss of etailers peddling make-up and fashion accessories?
Gaming has become one of the most profitable forms of culture in the world.
A report by PC Data this month announced that 35 per cent of home Net users
plan to purchase console or PC games during this holiday season, and that
gaming is no longer a male-dominated domain. For the first time, women
comprise a majority of online gamers -- 50.4 per cent.

Perhaps then we could funnel some of the creative energy and money of the
dotcom era back into the original ambitions of people like Licklider? Maybe
interactive communities will get the attention they deserve in terms of
attention, conception, price, ease-of-use, design and architecture?

There's no shortage of unfinished tasks that could benefit from some
attention. The virtual community, an inspiring early idea of the Net, needs
redesign and reconnection. Technology, from the sales and support of
computing to the writing of code, needs simplification, to be easier and
more accessible to non-techs.

Online politics is a ripe idea, especially after this year. Can digital
technology help people register and vote more easily and efficiently? Can it
democratise fund-raising, energise volunteers, generate new kinds of
candidates, even provide more meaningful ways of considering issues and

At the same time, a host of new tech issues like gene mapping and AI,
looming social issues that have gotten little attention from the general
population, could use some understanding and discussion.

The first generation Internet belonged to the engineers, dreamers and
military researchers. The second belongs to the Geeks and the Dotcommers,
who battled one another, sometimes directly, sometimes not, for attention
and primacy. It was the Microsoft Era, and it's over.

It isn't clear what the next era will be about, or what, precisely, will
define it.

My prediction: computing will spur the creation of Open Societies, digital
technologies being applied to open government, different models for doing
business, a revamping of intellectual property and a breaking down of
hierarchies, barriers between citizens and government, even some national

The Net is almost ferociously anti-hierarchical. Online authority reflects
online architecture -- it is so de-centralised that the idea of a central
information control seems almost impossible. Many-to-many-models of
communication means open participation in decision-making, from media to
entertainment to business, for better or worse. As computing spread through
different sectors of society -- politics, government, education -- so will
varying degrees of openness.
If the best minds online return to some basic topics, themes and dreams, the
Tech Slump won't be the nightmare Business Week imagines, but might turn out
to be a Tech Salvation.

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