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The wires have been buzzing lately with the growth of Ello, an alternative social network which some think could displace Facebook.

For all I know it will, or won’t. The timing seems about right. Facebook has successfully evangelised the social networking concept, but seems to be irritating people all over the place. Like many people I use it all the time, but dislike its design and much of the way it works. It would be good to have an alternative, and so I have joined the waiting list for Ello. Whether it comes to anything will depend on its ability to attract other people I want to connect with.

That’s been part of Google’s problem with its Google+ alternative, though it’s not the only problem (Google’s attempts to force anyone with a Google account to go there have not made any difference). Google+ looks much nicer than Facebook, but it seems complicated and I simply haven’t found much value in it.

Whether or not Ello succeeds, its significance goes deeper than the future of social networking. It’s really about the next phase of the Internet.

Tim O’Reilly, a millionaire publisher and digital evangelist, has proclaimed prematurely that the heart of the Internet revolution turned out to be “advertising!” The attractiveness of Ello proves him simply, radically wrong.

His conclusion is as much political as it is economic. The existence of the Internet is not especially comfortable for free market capitalists, created as it was by non-commercial entities. This independence from business interests was and is an important part of its appeal, and for a while too the fact that it’s undermined old business models (at least those which depended on control of distribution) while characterised by a “free” culture appeared to raise problems for those interested in making money. Hence O’Reilly’s relief that the answer, whatever the question, turned out to be something old free marketeers could understand and relate to.
I’m pretty sure advertising is not any kind of answer, though it may be some comfort to O’Reilly and like minded observers that the real way forward does involve the creation of income streams.

Ello has accepted venture capitalist funding, and proposes to “monetize” its user base by offering extra features which those users will have to pay for. This is not radical. It’s the Freemium model, which gained acceptance through the gaming world, and has morphed into pervasive practice in mobile apps. Many apps are available free, but the paid versions offer more functionality, and strip out the ads.

Perhaps even the music business is about to wake up to the concept. In the wake of its debacle with a forced U2 download Apple announced it was working on a new music “format” with the much mocked stadium band. It turns out not to be a format at all, but a way of persuading people to buy an enhanced experience rather simply copying MP3s of the tracks they like.

Alongside this conceptual shift sits a growing concern about privacy and transparency. It was prodded by the Snowden revelations, but it’s an anxiety that would have crept over people anyway. Businesses are amassing detailed data about our habits, our preferences, and our interests. They don’t have any lurking ill intent (we’ll leave that to governments who as we’ve seen have tried to yoke this data collection to their surveillance operations), and claim that this enables them to communicate with us more effectively, offering us things we might like rather than a cascade of junk.

But this assumes we want them to communicate with us at all. What’s more when my phone starts telling me how long it’s going to take me to get home, or promotes a restaurant that happens to be just around the corner from wherever I might be, I’m pulled between frissons of excitement at the unprompted helpfulness and irritation that my movements are being tracked.

Of course I could switch off the geolocation signal in my phone, which would be to make a conscious decision about the trade-off between privacy and usefulness, and in some ways this sense of control is the most important thing Google can offer me. The trouble is it’s only control over a very small part of what’s going on.

I’m not much of an Apple fan, but one thing it has got right is to give users of its ecosystem (its devices, software, and associated internet services) transparency and control over the data collected and used in the delivery of those services. It can do this because it charges a premium for its products so it doesn’t need to make extra money from the information it collects. Google’s business model in contrast (and much like Facebook) depends almost entirely on that information, and so it literally can’t afford to give away control.

We surrender control over our our privacy, and subject ourselves to a stream of (still largely irrelevant) advertising garbage in return for using Google services and Facebook for free. But the appearance of Ello and the buzz surrounding it suggests that given a choice, we might make a different choice.

Facebook and Google are often seen as rivals, but this is only true in their rivalry for advertising dollars. The service proposition is quite different. Given the right features and communities I could move painlessly from one social network to another. I would not want to pay a fortune for the privilege, but I’d be happy to shell out maybe £20 a year in exchange for complete control over the experience.

This highlights another truth, that despite the best efforts of the marketing world the internet and advertising are not natural bedfellows. It’s true that advertisers themselves have been promised a holy grail, in the combination of precision targeting and hard response data, but this ignores the fact that one of the great things the internet does is put us in control of our own experiences. We are no longer at the mercy of TV channel schedulers, and we no longer have to buy a whole music album to get hold of the three songs we do like. Habituated to that control it becomes all the more irritating when ads force themselves in front of you. As a result I avoid Android apps that push ads, even discreetly in a lower corner. It just feels wrong. I’m happy to pay a few pounds to get rid of them, and support the developer directly.

But then it is only a few pounds, and that’s another important aspect of what’s going on. When software like Microsoft Office and Adobe Pagemaker was first launched its developers were serving a relatively narrow market and charged hundreds of pounds for a “licence”. Those developers did not seriously change their habits and expectations when they found themselves serving a mass market, instead happy to rake in the cash. But those heady days, fuelled by useful upgrade cycles, have come to an end, and despite the last ditch attempts to sustain revenue streams through value-free subscriptions, they are being undermined by the predominant Freemium/lower cost model of the mobile world.

Google has become far more important to me than Facebook, mostly because until a few days ago I had an Android phone and tablet (I’ve since moved to a Windows phone, but more of that in another blog). I don’t use Gmail much, but depend on it for synchronised contacts and calendaring, as well as its maps. I don’t use Chrome any more than necessary (preferring the Chrome-based Opera) and I mix and match search engines.

I suppose it could be argued that if Google is going to offer a profile of me to anyone, it would be best if it was complete, as accurate as possible and that by limiting Google’s opportunities to gather data about me all I’ve done is ensure that I get inappropriate advertising. But the net effect of all this to leave me dissatisfied and open to alternatives. Even with my limited usage it would be harder for me to leave Google services than Facebook, but if the privacy/control situation gets any worse I’d certainly consider it.

Google could address this by shifting its business model. It has to some extent begun to do so, through its Play store and to a lesser degree the charges it levies business users for its office applications. I’d be happy to follow the Freemium model and pay Google a small amount every year to use its calendar and contacts management. I would also pay to retain complete control over my profile while using Android. But then I imagine that amount would be smaller than however much Google earns from me now. The question for Google then is whether it wants only to squeeze those last dollars of advertising revenue out of my existence within its data machine, or whether it might want to start regarding me as a customer, perhaps with rather more potential thanks to the entertainment and other services I might be happy to buy.

If Google doesn’t do this then the lesson of Ello is that someone else will (whether or not Ello proves to a be a Facebook killer). There might be an opportunity for Microsoft here, trailing badly in the mobile space: CEO Nadella has already spoken of the need to offer a service model that does not invade user privacy. With a far larger desktop customer base than Apple it might be able to do this at an attractive cost and still remain very profitable, but it will need to note the typical asking price for the apps in its own Windows store. If it wants to offer premium technical support it should do so at a premium for those who need it. Bundling unwanted services and then trying to claim that these constitute worthwhile value won’t be tolerated. Compared to the earlier costs of Office the 365 home subscription might look reasonable, but that’s only if you need five licences, and it’s not the only comparison. Office is competing with the genuinely “free” of LibreOffice, with the plausibly free Google apps, or (my preference) the much lower cost of Softmaker’s excellent office suite. The Freemium model works by offering a relatively painless step up to things you might want, but keeping the pain out of the equation means keeping the incremental costs down.

This shift is happening everywhere. I’d much rather pay Netflix six pounds a month and watch programmes there, at my convenience and without interruption, than endure the mindless rubbish forced on me by the TV channel internet services. Netflix might have a limited selection, but there’s enough to keep me going from month to month.

The internet has changed pretty much everything it’s touched. It’s not surprising that people should try to graft old commercial models onto the way it works, since this was all they knew, but when those models undermine the experience we’ve come to expect then the graft is not likely to take. I’m not suggesting Google is about to disappear, and perhaps even Facebook will adapt to survive, but we are entering the next phase of internet development. We can live in hope that this time round a larger part or the revenue created will find its way back to the content-creators.

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