Brief presentation to Chinwag Live, London, 3 February 2006 Good evening, how nice it is to address an English audience. At every panel I've addressed for the past six years - I've been living in San Francisco - I've seen the tops of everyone heads, their noses are in the laptop, and no one's paying any attention at all! I was looking for a snappy quote to introduce this subject, "The Next Bubble?" The best one was supplied about 9 months ago by a friend of mine who did very well out of the first internet boom, and has about 100 million dollars to spend, and he's only spending about 1 million of it in new web start-ups. So I asked him "Why are you sitting this one out?" He replied, "the big ROIs are going to come from solving the really big problems that haven't fixed yet, and Web 2.0 doesn't solve any of them". OK, tonight I'll ask if this is bubble, what's going to make it burst if it is a bubble, and then conclude with some very optimistic technology scenarios that once we stop focusing completely on the web and think more broadly about technology, there's actually quite an interesting picture out there for all of you. Firstly, then, "Is this a bubble?" I'd agree with Mike and Dave, earlier, in this isn't a bubble on the scale of five or six years ago. That was the biggest loss of wealth in human history. This time around I believe the figure is something like $500m that's been invested in web companies. And people aren't losing their houses or their investments; there isn't the IPO market, so I think those earlier points were really well made. So there isn't an economic bubble of any particular significance. But there is a rhetorical bubble. I think we're at the crest of a wave of utopian rhetoric which we haven't seen since the Artifical Intelligence hype 30 years ago, when people confidently predicted chess playing computers would beat humans in a couple of years, and five years down from that we'd be enslaved to robots, who would nevertheless tuck us in at bed time.. This is the real problem with the Web. I've been trying to figure it out with our readers - why this is? Let me give you an example of how there's a very different view of the world when you're inside this One- Web kind-of-thinking than to when you're outside it. About 18 months ago I did a little satirical, throwaway piece about Tim O'Reilly's definition of Web 2.0 because the poor bloke had just made his 45th attempt to try and define it. He'd come up with this very blobby chart full of nebulous concepts, so I suggested five definitions of my own. And invited readers to supply their own. When I looked at my computer three hours laterm I saw 600 incoming emails in response. Within 24 hours later there were about a thousand. Just one of them defended the idea. "Boy," I thought, "do people really not like Web 2.0." A lot of these came from infrastructure people. You could see this great wave of opprobrium going round the world. It started with people who runs systems for companies in the city, who were getting in at 6am. They don't like it for I think two reasons. One is that - and web designers please don't take this the wrong way, because it's a real skill - Web 2.0 is presentation layer people trying to solve infrastructure level problems. The internet has real big problems with spam and security, but a utopian approach to building computer systems doesn't solve them. Tim O'Reilly had this phrase on his Web 2.0 chart: "Radical Trust"That really got them annoyed! Anyone who has to maintain a firewall or a corporate data system isn't going to depend on "Radical Trust". People really hated that one. The other reason is that they see this very woolly Californian New Age rhetoric - which actually has its roots in some of the cults that started on the West Coast - as the wooly cover for the next wave of Management Consultants. Now why does this utopian rhetoric appeal to people so much? I think because it is a genuinely seductive world. Things are really broken now - the media is owned by the same people who own the government; it's very hard to get a political consensus even on something like global warming; but Web 2.0 is seductive because it offers a kind off-the-shelf belief system. You can walk into a store and get an suit to measure, well look at the Web offers you. You have an alternative media - the Blogosphere - you never have to leave that. You have an alternative epistemology - Wikipedia - where nothing has to be true. And you have an alternative economics - The Long Tail, that never has to add up. None of this has to add up! So it's very seductive, and I can see how it appeals to be people, who start to project their fantasies onto it. Let's easier to be realistic about the internet, we can see what makes money now and some of the fog's cleared. But only once we've got past the utopian rhetoric will we be able to see the much more realistic opportunities for growth in the future. Why do I think if this is a bubble why will it burst? Fundamentally it's the same as last time, There's a rhetorical bubble because people expect too much from technology. It can't solve problems that don't exist. A lot of the uses that people are expecting to generate downstream benefits from the internet aren't going to work even if you have a laptop strapped to your head the whole time. Now for the positives I promised. Where do I see the growth coming from? I see two waves once we've got some of the crazy rhetoric about the web behind us, and the web is distracting us from both of these. One is going to come from what's called near field electronics and RFIDs in particular - I'm not altogether sure this is going to be a good thing, though. Now, most of you have experienced the self-checkout at Tesco, where you spend far longer trying to wave things over a scanner than you otherwise would. Well, the good news is you're going to have to do that fairly soon, you'll just walk out with your basket. And you card will be automatically debited. The downside, as I'm sure you can begin imagine, is that there's no human contact at all. Tesco's will simply be a warehouse and you walk in and walkout with your basket. A pretty soulless experience. The other big change I'd like you to think about, which will really transform things hopefully in a more positive way, is there's a lot going on developing new compensation mechanisms for digital media. I was at the big annual music festival Midem a couple of weeks ago and there's such a lot going on behind the scenes to find ways of compensating artists for what currently is called "piracy", file sharing. We've barely begun to think about the consequences for this. I'm confident it will be the biggest positive boom in our lifetimes. You'll be able to walk in hear and your iPod will fill itself with music from the jukebox. Your iPod will be a personal broadcast station - for people on the bus. The only reason we don't have this in place is because the compensation mechanism isn't in place, the blanket or flat fee or all-you-can-eat license. As a consequence a lot of the technology utopians have this great big beef about copyright, "it must go!", or "artists will have to work for free - because we deserve it, we're geeks". Obviously this is unsustainable in the long run and it will end fairly shortly. I predict this within five years - although France very nearly voted for it last year from a top-down point of view - it more or less said, "here's a 50p fee on your ISP bill, you can swap as much music as you want, go and do it". But it'll be here in five years. It's one of the very few technologies I write about that's truly social - it gets us out talking to each other. Most technologies put up barriers, and we use them to avoid each other. Any questions on either of these, shout them out in Q&A. Thank you!