Documentary: Download - The True Story of the Internet (part 4) (People Power)
Download: The True Story of the Internet is about a revolution — the technological, cultural, commercial and social revolution that has radically changed our lives. And for the first time on television, we hear how it happened from the men and women who made it possible.
From the founders of eBay, Yahoo, Amazon, Netscape, Google and many others, we hear amazing stories of how, in ten short years, the Internet took over our lives. These extraordinary men and women tell us how they went from being geeky, computer obsessed nerds to being 21st-century visionaries in the time it takes most people to get their first promotion. And, how they made untold billions along the way.
The style of the story-telling is up close and personal. With first-hand testimony from the people that matter, we tell a story that has all the excitement of a thriller — full of battles and back-stabbing, moments of genius and moments of sheer hilarity. You will never surf the net in the same way again.
Download is hosted by technology journalist John Heileman. He’s an edgy, combative, hi-energy New Yorker who never takes anything at face value. He’s also a personal friend of most of Silicon Valley’s most important characters and he revels in the craziness of it all.
After all, this is a story in which 20-year-olds become overnight billionaires, create, destroy and re-create more wealth in ten years than the human race has ever seen, and still struggle to get a date.
From the founders of eBay, Yahoo, Amazon, Netscape, Google and many others, we hear amazing stories of how, in ten short years, the Internet took over our lives. These extraordinary men and women tell us how they went from being geeky, computer obsessed nerds to being 21st-century visionaries in the time it takes most people to get their first promotion. And, how they made untold billions along the way.
The style of the story-telling is up close and personal. With first-hand testimony from the people that matter, we tell a story that has all the excitement of a thriller — full of battles and back-stabbing, moments of genius and moments of sheer hilarity. You will never surf the net in the same way again.
Download is hosted by technology journalist John Heileman. He’s an edgy, combative, hi-energy New Yorker who never takes anything at face value. He’s also a personal friend of most of Silicon Valley’s most important characters and he revels in the craziness of it all.
After all, this is a story in which 20-year-olds become overnight billionaires, create, destroy and re-create more wealth in ten years than the human race has ever seen, and still struggle to get a date.
Category
🤖
TechTranscript
00:00You know what it is as 21st century humans value, crave, and worship above all else?
00:15The thing we seek out minute by minute, 24-7, 365 days a year?
00:20Well, an idealist might say the answer is love or maybe happiness.
00:25A cynic might say money or power.
00:28But I'll tell you what I think. After watching my fellow bipeds shamble around this spinning rock low these many years,
00:34I say the deepest human impulse, the most profound desire and need is for communication.
00:40But right now, at this moment, communication is changing.
00:44In the old days, the way our culture talked to itself, all the stuff we read and watched and listened to,
00:49was controlled by the bigwigs who ran newspapers and TV networks, the movie bosses and music moguls.
00:55The big shots decided not just what information you could have, but when and where you could have it,
01:00and how much you had to pay for it, too.
01:03I'm John Heilman, and I'm here to tell you about a communications uprising that's happening all around us.
01:09An incendiary revolt of the little guy that has the assembled forces of big media quaking in their tasseled loafers.
01:15A revolt being propelled by, what else, the World Wide Web.
01:22To bring you this tale, I've explored the infinite expanses of the Internet,
01:26from its busiest quadrants to its most barren haunts.
01:30I've sculpted around behind the scenes in Silicon Valley,
01:33delving into the doings and meetings of the leaders of a new generation of companies,
01:38like YouTube, MySpace and Facebook.
01:41Companies that have begun to turn the web into a two-way, participatory, democratic medium,
01:46controlled by no one and shaped by everyone.
01:49In other words, our medium.
01:55I've also delved into the history of the web,
01:57to tell you the story of how the seeds of this remarkable transformation were sown.
02:03By now we all know how the web has changed the world,
02:06but this is the story of how the world is changing the web.
02:11Silicon Valley, California
02:18This is Silicon Valley, California,
02:20and these dudes are Chad Hurley, Kevin Rose and Jay Adelson.
02:25Now they may look more like Doogie Howser than Che Guevara,
02:28but these guys are among the leaders of the Web 2.0 revolution.
02:33Rose and Adelson run Digg, a social news website,
02:36the content of which is chosen by its devoted user community of millions.
02:41Hurley, meanwhile, is the co-founder of one of the planet's most insanely popular websites,
02:46YouTube, the online video sharing service that was bought by Google in 2006
02:51for a jaw-dropping $1.65 billion.
02:55Now you might think that like other startup players, these guys are in it to get rich.
02:59And yeah, they are.
03:01But they're also on a mission to change the world through web-enabled people power.
03:05I think it's just, this is what the Internet's all about.
03:08The Internet's about connecting individuals or connecting individuals to information.
03:14Who do you trust more?
03:16Do you trust some corporate executive in some smoky-filled back room
03:19or do you trust your peers and the people who are connected to you?
03:25If that sounds like fighting talk, that's because it is.
03:28Digg and YouTube are part of a new wave of web services,
03:31each more popular than the last,
03:33all of which offer an alternative to old-school media,
03:36like the one you're watching right now.
03:44Until very recently, the old television order operated according to a set of ancient and antiquated customs.
03:51Incredibly charismatic and slightly obnoxious,
03:53guys like me would travel around the world with huge expense accounts and even bigger salaries,
03:58getting ourselves filmed by guys like these.
04:02For the average person, the TV industry was impossible to get into.
04:05It was a clubby system that decided on its own what would get on the air.
04:09Them too, in other words.
04:11But not anymore.
04:12Today, the TV industry is being blown wide open, made accessible to everyone,
04:16all because of YouTube and a transformation summed up by its two-word slogan,
04:20Broadcast Yourself.
04:23Before, it was just the traditional media companies that would control the gates of distribution.
04:29And also they were controlling what was being produced.
04:32But we think everyone has an opportunity or should have the ability to be heard.
04:37It's not surprising that some of the titans of television find YouTube so threatening,
04:41especially after its marriage to Google.
04:43For what Chad Hurley and his gang have done has given us all a power
04:47that used to reside only in the hands of the masters of big media.
04:51They've given each and every one of us our own personal broadcast tower
04:55from which we can transmit our home video creations,
04:58be they brilliant or utterly moronic, to a potential audience of millions.
05:04Over at Digg, a similar kind of experiment is underway,
05:07only here the subject isn't frivolous TV entertainment,
05:10but that most self-serious of subjects, news.
05:14Like a newspaper, Digg is full of the latest goings-on from around the world.
05:18But what lands on Digg's front page isn't decided by some stripy-shirted, ink-stained Ben Bradley wannabe.
05:24It's decided by you, the user.
05:27The more people who Digg, which is to say vote for, a given story,
05:31the more prominence it gets on the site.
05:34You know, it's always been a handful of editors that determine
05:36what belongs on the front page of a newspaper or anywhere else.
05:39Now it's the entire, you know, close to a million registered editors that we have
05:43that are constantly looking for great news information, stories, videos,
05:46and anything else to expose to the community.
05:49What Digg is doing is it's saying a blog could be on the same plane as the New York Times.
05:54And it's up to the people to decide what's important.
05:58The guys at both YouTube and Digg are believers in a theory known as the wisdom of crowds.
06:03They're also deeply in touch with the fact that we love nothing more than the sound of our own voices,
06:08the sight of our own images on a screen.
06:11But there may be nobody who understands all that more deeply at this moment than this kid,
06:16Mark Zuckerberg, the 22-year-old founder of the burgeoning social networking site Facebook.
06:22The reason why you spend so much time communicating with your friends, right,
06:26and other people that you respect is because their opinions and what they say actually means a lot to you.
06:31So what we've tried to do at Facebook is we've tried to map out all of these relationships that people have.
06:38About a year ago, I happened to share a cross-country flight with Arthur Sulzberger,
06:42the chairman and publisher of the New York Times, and Mark Zuckerberg.
06:45Zuckerberg arrived about 20 minutes late, to the New York Times jet, no less,
06:49wearing a pair of gym shorts and flip-flops.
06:52Listening to him and Sulzberger talk about the future of media
06:55was like overhearing a conversation between a Martian and a fungo bat.
06:59When the flight was over, Sulzberger asked me what I thought of Zuckerberg,
07:02and I said I thought he was smart, but young.
07:04Sulzberger replied, yeah, smart, but really young, and really, really lucky.
07:09He said he was just the flavor of the month.
07:11A year later, the New York Times' share price and profits were falling through the floor,
07:15and the company was conceding that its web strategy was a total mess.
07:19Meanwhile, Facebook was growing like gangbusters,
07:22getting ready for what was sure to be a multi-billion dollar IPO,
07:25and looking, quite possibly, like the next Google.
07:28But the truth is, Facebook and YouTube and MySpace and Dig didn't come out of nowhere.
07:32They're the direct descendants of another crop of media revolutionaries,
07:36who hit the scene in a couple of years.
07:39Now, today, we've all become a bit blasé about the web.
07:42We take for granted the huge changes it's caused in our daily lives,
07:45especially when it comes to how we consume media.
07:48But take a second and cast your mind back to, say, the mid-1990s.
07:52Remember how it used to be.
07:54Remember the incredibly tedious process that used to be involved
07:57when it came to laying your hands on a new piece of paper.
08:00Remember how it used to be.
08:02Remember the incredibly tedious process that used to be involved
08:05when it came to laying your hands on a new piece of music.
08:08As I recall, it went something like this.
08:12First, you'd hear a track you liked.
08:14Maybe on the radio.
08:17Then you'd have to leave the house and go look for a record store.
08:24Poke around in the bins, find the music you're looking for.
08:29Then come all the way back home again.
08:32Finally, you'd get back to your comfy living room with your expensive new CD,
08:35which you'd bought on the strength of that one single you liked.
08:38You'd pop it into your CD player,
08:40put your feet up,
08:42and give it a listen.
08:53And more often than not,
08:55you'd find out that the rest of the CD was complete and utter crap.
08:58But that's the way it was in those days.
09:00And there was nothing you could do about it.
09:03Or at least that's what most of us thought.
09:06But tucked away in the college dorms and suburbs of America
09:10were some folks who thought differently.
09:13The nerds in question were guys like David Weakley,
09:16Justin Frankel, Cable Sasser, and Steve Frank.
09:21Music lovers who started playing around with some obscure technology
09:24that put tunes together with PCs and the web.
09:28I think most people weren't ready for the idea
09:31that real music could come from their computer
09:34and they'd actually be introduced to new music
09:36through their computer and through the internet.
09:38I mean, most computers didn't even have speakers that came with them.
09:41It was kind of an exciting time
09:43because it was the beginning of that music revolution.
09:45And you could feel that it was changing.
09:47You could feel that something big was going to happen.
09:49I made software for playing music that was really low quality
09:53and on homemade hardware in high school.
09:56And by the time I was in college, MP3s sort of were available.
10:01So I started playing around with that
10:03and the quality was actually really good.
10:06In the old days, music files were huge and unwieldy.
10:09But MP3 provided a way of compressing the data
10:12in a much smaller digital packet
10:14and therefore making it easy to move back and forth around the net.
10:21Turned on by the possibilities of all this,
10:23Frank, Sasser, and the 18-year-old Frankel
10:25went and created downloadable media players Audion and Winamp,
10:29applications that allowed users to store and play music
10:32in the form of MP3s on their computers.
10:35But that was just the start.
10:37Music lovers and internet enthusiasts like David Weakley
10:40were getting excited about the idea of distributing and accessing MP3s online.
10:46As a Stanford computer science freshman,
10:48Weakley launched an MP3 information website
10:51laden with downloadable ear candy.
10:55About two weeks after I started it,
10:57I got a call from Stanford Network Security
11:00and they asked me, hey, what's going on?
11:02We keep this list of the top 10 to 20 servers on campus
11:06that are using bandwidth.
11:08And normally dorm computers aren't really on this list.
11:10And your computer's number one in this list.
11:12And actually, your computer's using about 85% of Stanford's outgoing network bandwidth.
11:16So we're curious, what's going on?
11:19What was going on was the first stages of an internet insurgency
11:23that would soon catch the old order of the music business totally off guard.
11:28For down in Los Angeles,
11:30executives like Jay Samet of EMI Records
11:32had created a cushy life for themselves
11:34doing things the same technophobic way that they'd always been done.
11:37MP3? Web audio? Ripping? Mixing? Burning?
11:42Their reaction was, not a chance.
11:44The record industry as an industry, all the labels working together,
11:48funded a project called Madison,
11:50which was a test with IBM to put CD burners in people's homes.
11:54This was a test done in San Diego
11:56to see would consumers purchase and download and burn music.
12:00And the conclusion of this very expensive test
12:04done by IBM and these major record labels
12:07was that no consumers would ever want to do this.
12:10And what a brilliant insight that was.
12:13It's worth recalling, of course, that a couple decades earlier,
12:16the geniuses at IBM had decided
12:18that the worldwide market for PCs would never be more than a couple thousand units.
12:22And now the dinosaurs of the record industry
12:24were making the exact same mistake again.
12:26Instead of, heaven forbid, embracing the net,
12:29the music business fat cats adopted a posture of perfect and absolute denial.
12:33Under no circumstances would they allow any of the copyrighted material
12:37of their artists to be circulated anywhere on it.
12:42But as the industry would soon discover,
12:44like every other parent eventually does,
12:46the kids of America didn't really care whether they had permission or not.
12:51The idea that music could be distributed on the web
12:53and freed from the rule of the record industry
12:55was about to go mainstream in a massive way
12:58amidst a frenzy of downloading
13:00that would ultimately pave the way for services like YouTube.
13:04All this thanks to a shy 18-year-old from Boston
13:08with a novel but thoroughly disruptive software idea.
13:12This idea was called Napster, and his name?
13:15Sean Fanning.
13:21Back in 1999, Fanning was studying at Boston's Northeastern University.
13:25He liked to play guitar and, like his friends,
13:27surfed the web for downloadable music.
13:31My roommate in college was really into rap music
13:34and would download all sorts of obscure rap
13:36and he'd have his friends over on the weekends and we'd party
13:39and they were all interested in getting access to his music
13:41or figuring out how to get music in the same way that he did.
13:44But he put so much time into finding tracks,
13:46it was such a pain that he would skip class to do it.
13:48And if he found a good site, he would skip an entire day worth of classes
13:51just to make sure he got everything he wanted.
13:54This gave Sean Fanning a big idea.
13:56I mean, like, really big.
13:58So big that its repercussions are still rippling
14:00all throughout the internet and the entertainment industry today.
14:03I started to come to the realization
14:05that there were all these people with music collections
14:08that had music that other people would be interested in
14:11and they wanted to share them.
14:12And the logical way to solve that and some of the reliability issues
14:15was to do something that created
14:17what was essentially a peer-to-peer architecture.
14:20So how did this peer-to-peer system work?
14:22Well, Napster allowed its users to let their PCs talk
14:25and share stuff with the computers of other users.
14:28This meant that as long as someone somewhere
14:31had an MP3 of the song you wanted,
14:33all you had to do was fire up Napster,
14:35type in the name of the song,
14:36and it would be downloaded onto your hard drive
14:38straight from theirs.
14:41Napster was kind of built out of necessity.
14:43I was...
14:44I really wanted to use what I was building.
14:47And he wasn't alone.
14:48Because Fanning, a kid too young to buy a drink
14:51in most American states,
14:52was about to spark a phenomenon
14:54and cause one of the most heated controversies
14:57in the history of technology.
15:00In June 1999, Fanning finished hacking up the code for Napster.
15:04It was the first program he'd ever written.
15:06He gave it to a couple dozen of his friends
15:08that he'd met through online chat rooms
15:09and told them, hey, just don't spread this around.
15:11But once they got their hands on it,
15:13they couldn't resist.
15:14Within a week, some 10,000 people had downloaded Napster,
15:17unleashing a revolution that promised a future
15:20in which the record shops of the world looked
15:22something like this.
15:28We just had an explosion of downloads
15:30and the network started to go crazy.
15:32From there on, it was a blur.
15:36College kids, forever on the prowl for anything free,
15:39were the first to catch the Napster bug.
15:41In the next few months,
15:43the program raged across American campuses,
15:45and by October of 1999,
15:47Napster-driven MP3 downloads were taking up 75% to 80%
15:51of the available bandwidth of many U.S. universities.
15:54In less than four months after Fanning released it,
15:57Napster had passed the million-download mark,
15:59making it the fastest-spreading software ever.
16:06For many, the equation was dead simple.
16:08Napster equals free music.
16:10But what Fanning had created
16:12had implications that went way beyond music.
16:14He created a means of turning users
16:16from passive recipients of information
16:18into active and engaged participants,
16:20announcing their tastes,
16:22sharing their most prized possessions,
16:24and talking to each other about their greatest passions.
16:26And in the process,
16:28they were becoming one of the first genuine web communities,
16:31something that countless sites in the future,
16:33from Friendster to Myspace to Facebook,
16:35would try eagerly to become.
16:37It was one of those things where just something as simple
16:40as seeing someone downloading a particular track from you
16:42and being able to right-click on them and message them
16:44and talk to them about the track
16:46was something that became so powerful,
16:48and it wasn't really possible before Napster.
16:51With Silicon Valley venture capitalists pounding at the door,
16:54Fanning picked up and moved out west to California,
16:57turning Napster from a hobby into an official business.
17:00The future looked bright for the fledgling service,
17:02but there was just one little problem.
17:05Napster's unprecedented success
17:07hadn't passed unnoticed by Hillary Rosen,
17:10the head of the Recording Industry Association of America,
17:13an organization set up to represent the interests
17:16and protect the revenues of the music business.
17:19Rosen was known as one tough cookie,
17:21and she wanted a word with Fanning.
17:24We called Napster and said,
17:27wow, cool idea, did you know it's illegal?
17:31And really, really, no, it can't be illegal.
17:34This is, well, okay, maybe it is.
17:37Tell us what you want us to do.
17:39She says, well, you're really going to have to filter out
17:42the copyrighted songs on your site.
17:44Well, how do we know what's copyrighted?
17:46Well, pretty much if it's a Rolling Stones song,
17:50you can imagine it's copyrighted.
17:54It didn't matter how cool and cutting-edge it was.
17:56As far as the music industry was concerned,
17:58using Napster to trade files online for free
18:01was the same as going into a record store
18:03and stealing a bunch of CDs.
18:05And with millions of files being traded online every day,
18:08this was shoplifting on a vast and epic scale.
18:14It was only a matter of time before someone said,
18:16enough's enough, threw down the gauntlet,
18:19and tried to take Napster down.
18:21But as it turns out, that person wouldn't, at least at first,
18:24be the RIAA or some music industry executive.
18:28Far from it.
18:34These golf club-wielding fellows are Howard King and Peter Paterno,
18:38top Los Angeles entertainment lawyers.
18:41Back in the summer of 1999,
18:43King and Paterno looked up one day
18:45and glimpsed the arrival of Napster,
18:47the renegade web file-sharing application
18:49that they realized had enormous implications.
18:52Well, you know, the whole file-trading phenomenon
18:55was starting to sweep mostly college campuses,
18:58and music was getting exchanged,
19:00and nobody was paying for any of it.
19:02Golf is so rock and roll.
19:04It's like, let's see, I got 20 bucks,
19:06I could buy a CD or I could buy enough weed for the weekend.
19:09Well, I can download the music and I can still buy the weed.
19:13All right, I'm in.
19:15I thought, OK, fine, they're swapping these MP3s.
19:18You know, college kids will steal it and won't catch on.
19:22But really within a week, we understood how big it was.
19:25Once we went public and people started coming to us
19:28with technical information and stories,
19:31we realized that this really was
19:33not only the potential end of the music business,
19:36but the end of the movie business and the book business,
19:39and really the end of protection for intellectual property.
19:42We understood within a week that this was a huge genie
19:46that had been let out of the bottle.
19:48And boy, was you right about that.
19:50Though Napster may not have actually put an end to intellectual property,
19:53it had set music free,
19:55breaking the distribution monopoly exercised by the record business.
19:58All of a sudden, millions of kids were swapping songs willy-nilly,
20:02threatening to cut out the middleman and eliminate the profits
20:05that paid for the Ferraris and fancy country club fees
20:08of the suits who ran the labels.
20:10But it wasn't just the suits who were in danger of taking a hit.
20:13It was the artists, too.
20:15So King and Paterno set their sights on them,
20:18trying to persuade their superstar clients like Dr. Dre
20:21that Napster and the Internet
20:23were a clear and present danger to their blink.
20:26We actually took a laptop to the studio
20:29and we said, let's show you how easy this is.
20:32Dr. Dre.
20:34Every song he ever recorded is on there.
20:38And there's all kinds of versions of it.
20:41And you can see, in those days, for every song there might be
20:455,200 people offering it for free.
20:48He got it, and he goes,
20:51so I work 24-7 in the lab, I come up with stuff,
20:55and they can steal my shit the day it comes out?
20:58He goes, fuck that.
21:01Now the language that Dr. Dre used may have been ghetto,
21:04but the sentiments he was expressing were 100% corporate.
21:07Suddenly he and his crew were reading up on copyright law
21:10and starting to realize the very future of intellectual property,
21:13the thing that allowed them to rake in the Benjamins, was at stake.
21:16And there was worse to come,
21:18because Dre wasn't the only one of Paterno and King's superstar clients
21:21to notice that their music was being traded for free by a Napster.
21:25Sean Fanning's little invention had also caught the attention
21:28of the biggest, ugliest, hairiest, and scariest,
21:32and richest heavy metal band of them all, Metallica.
21:37And to put it mildly, they were not amused.
21:40I was a pretty big Metallica fan,
21:43and I remember being really surprised by the fact that they were so upset
21:47by Napster and by people sharing their music,
21:51because I know they were really into
21:54the taping of live shows and sharing of live shows.
21:57They were pretty hypocritical.
21:59Yeah, I'd say it was pretty hypocritical.
22:07On May 3, 2000,
22:09Metallica's drummer and de facto spokesman Lars Ulrich
22:12arrived here at Napster's San Mateo headquarters
22:15on the northern edge of Silicon Valley.
22:17He was flanked by his lawyers, Paterno and King,
22:20for what would turn out to be a legendary, or ludicrous,
22:23depending on your point of view, encounter with their digital nemesis.
22:26I think he expected to come there and find a big company
22:29with a big sign out front with its own separate building,
22:32and he came there and it was one small office with a couple guys
22:35in a bank building.
22:38And so I really don't think he knew what he was getting into.
22:41We let the press know, but I have to tell you,
22:44when we rounded the corner in front of Napster's headquarters
22:47and saw at least 250 reporters with all the trucks in the towers,
22:52we were all shocked, because that was the first real sign
22:56that this is a pretty hot issue.
22:58Ulrich and his lawyers were here to make a point.
23:01They wanted some 300,000 Napster users,
23:03all of them trading Metallica songs, to be banned from using the site.
23:07And in case there was any doubt about who those users were,
23:10they brought with them a stack of computer printouts
23:13listing the names and details of each and every one of them.
23:16There were people outside with signs and smashing Metallica CDs,
23:20and it was pretty funny.
23:22It was a cutting-edge issue with quality clients
23:25and substantial intellectual issues.
23:28It's a great experience for a lawyer.
23:30And we were right.
23:32We had the added convenience of being correct,
23:34something as lawyers we don't often have.
23:36They may or may not have been right about the law,
23:39but they definitely were not cool.
23:41The furor over the Napster-Metallica war
23:43boosted Napster's popularity even more.
23:45Its user base was exploding.
23:47Sean Fanning had become a cult icon,
23:49worshipped by kids all over America,
23:51while Metallica was left looking like a bunch of greedy Luddites.
23:54And worst of all, totally square.
23:58But there was more trouble to come.
24:00Hilary Rosen and the RIAA filed a lawsuit against Napster,
24:04one that promised to have profound implications
24:07for the role of copyright in the digital age.
24:11After a furious, bitter legal battle
24:13that took place here at the Ninth Circuit Court of Appeals,
24:16amid a massive swarm of press from around the world,
24:19in July 2001, a verdict was rendered.
24:22Napster had to be shut down immediately.
24:24The music business had won, at least for now,
24:27but it had also shown itself to be a reactionary force.
24:30Rather than embracing the future, it had panicked
24:33and declared war on its customers,
24:35calling them outlaws rather than what they really were, fans.
24:41With its vindication in the courts,
24:43the music industry could claim a victory
24:45in its war against file sharing.
24:47It had shut down Napster and sent Sean Fanning to jail.
24:51But with the benefit of hindsight,
24:53the music industry's alleged triumph
24:55seems more like a hollow, pyrrhic victory.
24:58Did shutting down Napster halt the decline in music sales?
25:01Mmm, no.
25:03They just continued their long and steady journey
25:05to the top of the music industry.
25:07But the music industry had to pay a price.
25:10It had to pay a price.
25:12It had to pay a price.
25:14It had to pay a price.
25:16It had to pay a price.
25:18It had to pay a price.
25:20The company continued their long and steady downward spiral.
25:23Did shutting down Napster stop illegal file trading in its tracks?
25:27Mmm, no.
25:29Services like Kazaa simply picked up where Napster left off
25:32fueling even more trading in pirated tracks.
25:35Well, OK, then, you might say at least the lawsuits
25:38sent a shot across the bow of Silicon Valley
25:40on behalf of the entire entertainment industry,
25:42a stern warning to every impudent punk kid
25:45that trading in copyrighted material would not be tolerated.
25:49Napster broke the law, it also broke new ground.
25:52Ground that a new generation of 21st century web startups
25:55would soon rapidly lay claim to.
25:58The best known of those startups, of course, is
26:00YouTube, which in the past couple years has become a
26:02worldwide sensation, in no small part by being a place
26:06where people can go to view countless clips from popular
26:08TV shows, shows produced and owned by giant media companies
26:13such as Viacom.
26:15So how have those companies reacted to this borrowing of
26:19their content?
26:20Well, recently I interviewed Philippe Dalmond, Viacom's
26:24CEO, and what he had to say about YouTube carried distinct
26:28echoes of the Napster controversy.
26:30It's a very high quality company, a lot of very, very
26:34smart people.
26:34They can do things very quickly when they want to.
26:38And I guess they haven't wanted to until this point,
26:42but maybe they will want to in the future and will want to
26:44join the consensus that they need to be a part of.
26:49Dalmond's obvious unhappiness has expressed
26:52itself in legal form.
26:53Viacom has launched a $1 billion lawsuit against
26:57YouTube, accusing the site of, quote, brazen disregard for
27:01intellectual property law because of the copyrighted
27:03material that appears on the site.
27:06You might be tempted to ask, have these
27:08people learned anything?
27:09And to answer, I guess not.
27:12Even though YouTube will take down any copyrighted material
27:15as soon as the owner asks it to, and even though YouTube
27:17is trying hard to come up with an easier system, Dalmond's
27:20fears seem undiminished.
27:23But bringing YouTube to heel won't be as easy as shutting
27:25down Napster was, because unlike Napster, YouTube is no
27:29longer some underfunded startup.
27:31It's got a deep pocketed sugar daddy in the form of the
27:34search giant Google, which acquired YouTube
27:36at the end of 2006.
27:39I think it definitely would have been hard, to say the
27:42least, without Google's resources in place to deal
27:47with the level of interest in our company from the larger
27:50media players.
27:53YouTube may have become the largest target of the old
27:55guard's attempt to protect its flank.
27:57But while the service has indeed become a place where
28:00millions of people post and share copyrighted material,
28:03that may not be the most significant threat that
28:05YouTube poses to big media.
28:08I think what they're feeling is just the effects of the
28:12internet is that the internet opens up new opportunities
28:15for distribution that they don't necessarily control.
28:18And people have the opportunity to create their
28:20own content.
28:21And people are entertaining themselves.
28:23I think at the end of the day, that's what
28:25it comes down to.
28:26Sometimes they feel threatened by the fact that people would
28:30rather watch themselves than to watch their content.
28:33From its inception, YouTube has been at the forefront of
28:36the movement towards user-generated content.
28:38It offered a platform for people to express their
28:40creativity and indulge their vanity.
28:43And people went wild for it, posting countless online
28:46videos of wildly varying quality.
28:49But YouTube wasn't alone.
28:50With the rise of sites like Craigslist and Flickr, Dig and
28:53Match.com, posting online video was just one of many
28:57ways in which people became active players in an
29:00increasingly two-way web.
29:04They shared their music.
29:05They sold their stuff.
29:06They posted pictures of themselves when they
29:08tried to get a date.
29:10With this shift in attitude, a new era began on the internet.
29:13An era where content was created by the crowd in all
29:15its wisdom and stupidity.
29:18An era that would come to be known as Web 2.0.
29:22The phrase means different things to different people.
29:25But no one has been a more pivotal theoretician of it
29:27than Fred Wilson.
29:29Wilson is a New York venture capitalist, a very rich man.
29:32And the backer of such cutting edge Web 2.0 services as
29:35Delicious and Twitter.
29:37He's also a highly respected blogger who draws a large
29:40audience of people eager to listen to his musings, not
29:42just about money and investing, but about the
29:44meaning of it all.
29:46The fact that the people who are firing up their web
29:49browsers and going onto the web now can actually
29:53contribute back and be a participant in the web
29:58experience, whether that's contributing content, whether
30:01that's voting on Dig, whether that's taking a video on
30:05YouTube and putting it somewhere else.
30:07It's just they are having an everyday meaningful impact on
30:12what the web is.
30:13That, to me, is what Web 2.0 is all about.
30:17Where all the strands of Web 2.0 come together is in the
30:20new world of social networking, which was born in
30:23the wake of the dot com crash.
30:25First came Friendster, a glorified dating site that
30:28rose and fell quickly.
30:29But that was followed by Myspace, founded in mid-2003
30:33by two LA hipsters, Krista Wolf and Tom Anderson.
30:37Myspace page is very similar to a person's bedroom or
30:41potentially their apartment, whereby on their Myspace page
30:45there's different colors.
30:47There's music playing in the background.
30:49There's photos of your friends up, and it's very similar to
30:52what you may have in your bedroom or your apartment.
30:54It gives you this real insight into someone that,
30:56ordinarily, you wouldn't have.
30:59As it was with Napster, the initial popularity of
31:01Myspace had a lot to do with sharing and accessing music.
31:05By the spring of 2005, the site had gone through the
31:08roof, attracting 27 million registered users, growing at a
31:12blistering pace and overtaking even the web's reigning
31:16colossus in terms of monthly traffic.
31:19When we passed Google in page views, that was a
31:22significant moment.
31:23It just seemed, wow, we can't be that big.
31:25It just didn't seem right for us in the small
31:28company that we had.
31:29And Google was so huge and always in the news.
31:31And that was a very significant
31:33moment when that happened.
31:35By the summer of 2005, Myspace seemed to be everywhere.
31:39All of a sudden, every kid you met had a Myspace page.
31:41Every band had one, too.
31:43Hollywood had started using the site as a prime marketing
31:46vehicle for its wares.
31:47It didn't take a genius to see that Myspace was a potential
31:50gold mine, although genius is exactly what many people
31:53attribute to Rupert Murdoch, the man who presides over the
31:56globe-spanning media empire that is News Corp, and who
32:00that July wrote a very big check to take over Myspace.
32:09At the height of the internet bubble, I had a conversation
32:11with Murdoch about the implications of the web.
32:14The old man pooh-poohed it.
32:15Everyone's getting a bit overexcited by this digital
32:18deluge, he said.
32:19Most people just want to sit back and watch.
32:21Interacting is hard work.
32:23I remember thinking I'd finally found a
32:25blind spot in Murdoch.
32:26But then, a few years later, he turns around and buys
32:29Myspace for $650 million.
32:31Had Murdoch, the god of old media, finally got the web
32:34religion?
32:35I don't think so.
32:36What happened was that the social networking tsunami
32:39simply got too big for Murdoch to ignore, and he figured it
32:42was time to start trying to ride the wave rather than
32:44getting drowned by it.
32:46But as News Corp would soon discover, on the internet,
32:49money can't buy you love or a permanent position of
32:52unchallenged dominance.
32:54The new, new thing is always just around the corner.
32:57And when it comes to social networking, the new, new thing
33:00is Facebook, a startup founded by the now 23-year-old Harvard
33:04dropout Mark Zuckerberg, and which out in Silicon Valley is
33:08being mentioned by everyone in the same breath with Netscape
33:11and Google as a startup that has the potential to
33:14fundamentally change the web.
33:16It started off pretty small, right?
33:18I mean, we threw together the first version of the product
33:20in just a week and a half.
33:22Two-thirds of Harvard students were using it within a couple
33:25of weeks, right?
33:26And then all these other students from schools around
33:28Harvard started emailing us and saying, OK, well, can you
33:30open a version of Facebook at our school?
33:32And we just quickly expanded it as fast as we could.
33:37And then we expanded to all the colleges in the US, and
33:40then all the high schools, and then a lot of companies.
33:42And then we made it so that anyone can sign up.
33:47And then since then, it's grown from about 10 million
33:50active users to maybe 50.
33:51And it's still growing at this rate where it doubles
33:53every six months.
33:55This story might sound familiar.
33:57And in a way, it is.
33:59Boy creates software in college dorm room.
34:01Software catches on, takes the web by storm.
34:04Boy moves out to Silicon Valley, climbs into bed with
34:06venture capitalists.
34:08Boy winds up on the cover of Fortune and makes so much
34:10money that you can't help but kind of hate him.
34:13But Mark Zuckerberg isn't just your typical Valley boy.
34:16What sets him apart is the sheer, ungodly, nearly
34:19incomprehensible scale of his ambition.
34:22It's the kind of ambition that reminds you of a young Bill
34:24Gates, who set out with the goal of putting a PC on every
34:27desktop in every home and office in the world, all of
34:30them running Microsoft software.
34:32Or the Google guys, whose goal is to organize and make
34:35accessible all the world's information via Google.
34:39In Zuckerberg's case, the grand ambition is to create a
34:42service that captures the totality of human
34:44connectedness, to create, I guess you'd say, the ultimate
34:48relationship engine.
34:51What we've tried to do at Facebook is we've tried to map
34:53out all of these relationships that people have.
34:56And there are billions of them across the world.
34:59And what we call the aggregate of all of the relationships
35:01that people have, we call that the social graph.
35:05The social graph may sound like another bit of Silicon
35:07Valley jargon, but it's not.
35:09It's actually a concept from academia, from what's known as
35:12social network analysis.
35:14The basic idea is that we're all bound together by a web of
35:17relationships.
35:18Some of the ties are direct and strong.
35:20Others are tenuous and weak.
35:22I know you.
35:23You know a guy named Fred.
35:25And Fred happens to know Bono.
35:27So theoretically, I'm connected to Bono.
35:29It's the six degrees of separation thing.
35:31Everyone's connected to everyone, however distantly.
35:34Now, imagine a diagram of all those
35:36interpersonal connections.
35:38That's the social graph.
35:39So when Zuckerberg talks about mapping, encompassing, and
35:42replicating online the entire sprawling global social graph,
35:46well, that's what I meant when I said before that he was
35:49unusually ambitious.
35:53Zuckerberg's ambitions don't end with
35:55the social graph, however.
35:57He wants to turn Facebook into the Windows of the Web, a
36:00platform on which software developers can build
36:02applications to make the site more useful and
36:05all-encompassing.
36:06And along the way, develop a whole new model of
36:09advertising.
36:11Well, I mean, the developer platform is something that
36:13happened really quickly.
36:14Within the first four days of launching it, this company I
36:19like, they built a music application, had more than a
36:22million users already.
36:23And stuff like that is just crazy.
36:25But I mean, it was really interesting to see how quickly
36:27it grew.
36:28Though its early days and many of the current Facebook
36:31applications aren't very useful, the potential of its
36:34platform can't be overstated.
36:36That's one big reason why Microsoft wasn't just willing
36:39but eager to part with $240 million for just 1.6% of
36:45Zuckerberg's company late last year.
36:48Whether Zuckerberg will become the new Bill Gates of the Web,
36:50of course, remains to be seen.
36:52For one thing, his new ad platform may flop.
36:55For another, MySpace is hardly giving up without a fight.
36:58Though Facebook is growing at a staggering rate, MySpace is
37:01still bigger.
37:03And DeWolf and Anderson, with Murdoch's backing, plan to
37:05take on Facebook head on.
37:09Thus are we about to witness the next great Donny Brook of
37:11the Web, Facebook versus MySpace.
37:14The Valley Geeks versus the Hollywood Slicksters.
37:16But even with Rupert Murdoch lurking behind the scenes,
37:19bolstering MySpace as best he can, this is a
37:22novel kind of fight.
37:23Not old media versus new media, but new versus new.
37:27Two purebred Web 2.0 startups tangling for supremacy.
37:31A battle in which the most important creative assets are
37:33all of us, the amateurs.
37:36Which side will win?
37:38Maybe both, or maybe neither.
37:41With the rise of Web 2.0, everything is up for grabs.
37:45Money is flowing.
37:46Deals are being done.
37:48Millionaires are being minted overnight.
37:50But what's happening today also highlights the true
37:53significance of the Web that first emerged way back in the
37:56days of Napster, the way it's put fantastic power in the
37:59hands of individuals.
38:01And while this power can be turned into profit, there are
38:04those whose aspirations are deeper, more altruistic.
38:08There are the people behind sites like
38:10Craigslist and Wikipedia.
38:12People who can't be bought.
38:14As the traditional media have watched the emergence of the
38:16two-way Web, their denizens have begun to wonder, and even
38:20fret, about the future of their
38:21industries and themselves.
38:23And among the most fretful have been my pals who work in
38:26places like this, in the world of professional journalism.
38:29For nothing epitomizes the democratizing tendencies of
38:32Web 2.0 more than that new form of expression we've come
38:36to know as blogging.
38:40All over the world, ordinary people are posting their
38:42thoughts, their rants, their expertise, and sometimes even
38:46their reporting on the Web.
38:48Everyone has something to say, and suddenly anyone can be a
38:51citizen journalist.
38:56My reporter buddies aren't the only ones rattled by the rise
38:58of the two-way Web, though.
39:00Their bosses, the publishers, are freaking out as well.
39:03Now back in the day, and until very recently, newspaper
39:06publishers could kick back in their offices, comfortable in
39:09the knowledge that no matter whether the economy was up or
39:12down, they always had one reliable source of revenue,
39:15classified ads.
39:16But today, those same newspaper publishers aren't
39:19comfortable at all.
39:20Instead, they're trembling with fear every time one word
39:23gets mentioned.
39:24No, not internet, and not Web.
39:28Instead, it's Craig.
39:31That's Craig as in Craigslist, one of the world's most
39:34popular websites, which acts as a kind of online notice
39:37board in 450 cities worldwide, complete with all the stuff you
39:41get in the classified section of any newspaper.
39:43Jobs, stuff for sale, stuff wanted, places to rent, places
39:46to buy, gigs, services, and of course, personals, many of
39:50them naughty.
39:52And the fact that its classifieds are free is why the
39:54newspaper publishers are in a tizzy.
39:57Considering the scale and global reach of Craigslist,
39:59surely the company behind it must occupy a vast and gleaming
40:03headquarters in the heart of Silicon Valley.
40:05And surely, the man behind it all must be a rapacious
40:08billionaire, fierce and formidable and imposing.
40:11Or maybe not.
40:15Yep, here he is, Craig.
40:18Craig Newmark, to be precise, a cuddly, middle-aged ex-programmer
40:22who runs his free-to-use, free-to-post website out of this
40:25tiny San Francisco office, which was once his apartment.
40:29Like Jimmy Wales, the founder of Wikipedia, the nonprofit
40:32user-generated web encyclopedia, Newmark is living
40:36proof that the web is not just about making money, it's about
40:39setting communication free.
40:42We share some values with pretty much everyone in
40:45America, and maybe everyone in the world.
40:48The deal is that, well, once you make enough money to live
40:52comfortably and to provide for your future, what's the point
40:55in having more?
40:56These are just the values we all get out of Sunday school
41:00or whatever when we grow up.
41:03And we're just following through.
41:05We're in an era when people are starting to realize that
41:08communities, self-supervising communities, can produce work
41:11of very high quality, whether that's open-source software or
41:14something like Wikipedia, the openness, the transparency,
41:18that as long as you've got social rules in place that
41:20tend to encourage good work and to discourage bad things, the
41:24product that comes out is pretty good.
41:28As Wikipedia and Craigslist demonstrate, and as we see all
41:31around cyberspace, the web belongs to us.
41:35It's given us a megaphone to shout our views, however sane
41:38or crazy, trivial or profound, to show off our creativity to
41:42friends, family, and to other strangers, to access media the
41:46way we want and say anything we please.
41:49What we're living through right now is the flow of power
41:54from a relatively small group of people to, in a sense,
41:58anyone who wants their little piece of
42:00power through the net.
42:01We went through the whole dot-com bubble when the
42:07internet started to seem like it might be all about pop-up
42:10ads and selling dog food and things like this.
42:12And then this kind of harkens back to an earlier era.
42:15Which is to say the web is finally turning into what its
42:18originators always hoped for, something that big business
42:22can never hope to control, the medium of the little guy.
42:25Don't believe me?
42:26Just ask the guy who invented it.
42:29Originally, the idea of the web was that it would be a
42:31two-way thing, that I would be able to contribute.
42:33And the web, over the last decade, has missed that.
42:36We are returning to the idea of a read-write web.
42:39So the fact that it's a space in which people can write a
42:43blog and contribute to a wiki is really exciting for me.
42:47Because they bring back the common person as the author.
42:56And what of the future?
42:57Where's the web headed?
42:58Well, if I could answer those questions precisely, I'd be a
43:01billionaire.
43:02And I certainly wouldn't, under any circumstances, share the
43:05information with you.
43:06What I do know is the general direction of the changes that
43:08are coming for the web.
43:10Bigger, faster, more social, more pervasive, more all
43:13consuming, more all enveloping.
43:15Whether we like it or not, the web has taken on a life of
43:17its own.
43:18It's auto-catalytic.
43:20The dominoes have started their chain reaction, with
43:22many, many more to fall.