Silicon Insider: Looking Back a Year, and Beyond

As we near the end of 2005 and I look back over this column for the last year or so, I'm struck by just how often the topics have evoked what might be described as exhilarated pessimism.

By that I mean that so many Silicon Insider columns have led with R.I.P. this or the death of that as one venerable institution after another gets dealt a mortal blow by the advance of technology. It is also worth noting how much anger and backlash these columns have created in the media, not just in traditional newspapers and magazines but also in the new media of the Web and blogosphere.

When I was the first member of the so-called mainstream media to call for Dan Rather to be fired in light of the National Guard forgery revelations in the blogosphere, ABCNEWS.com felt obligated to append the disclaimer that still appears at the end of this column. When I suggested that Microsoft had peaked, it provoked hundreds of angry blogs and comments that I was at least an idiot and likely in the pay of Apple Computer (ironic, given that I'm usually accused of being a Steve Jobs hater).

My next question was why the music industry was making a fool of itself hunting down music downloaders instead of embracing the new technology. After that I argued that Wikipedias, by being more timely, and ultimately more accurate, would soon replace traditional encyclopedias.

But perhaps nothing I've ever written has created as much of a stir as my claim that traditional newspapers were dead men walking and that within a few years most of the major U.S. dailies would be gone, with many magazines and television networks to follow. That Rupert Murdoch made a similar claim a week later didn't seem to dampen the calumny that poured down on me in the months after.

Yet looking back, I would argue that events have proved me far more accurate in my predictions than my critics have been. Rather is gone. Microsoft is now so defanged that there is a growing (and misplaced) nostalgia for the good old days when Gates ruled instead of Google. Wikipedia recently suffered the inevitable scandal that comes with success but just this week was rated better in science coverage than old-line encyclopedias. And iPod, the consumer product of the decade, finally forced the music industry (and now Hollywood) to wake up.

Newspapers Are Going to Die

As for newspapers … well, you know the story. Knight-Ridder may soon be torn asunder. And the San Francisco Chronicle, in a harbinger of things to come, is the first major paper to find itself in a circulation freefall under the twin assaults of the Web and CraigsList.

It might be fun to gloat over all this, but the simple fact is that accurately predicting the near future of commercial and social institutions in this country really only requires that one ruthlessly apply the underlying forces of the digital revolution (notably Moore's Law) and not let any emotion or nostalgia color the result. If the pace and direction of technology argue that some beloved profession or enduring market is about to be blown apart and rebuilt, or simply annihilated, you simply have to go with that result, no matter how much it hurts.

And sometimes it really hurts. I've spent much of my adult life writing for newspapers. I love newspapers. To me they are a living thing: Every time I travel I always buy the local newspaper and read it all the way through, right down to the classified ads, because nothing does a better job of giving me the spirit of the place, the personality of a community. I love sitting in a coffee shop, tearing open the paper, feeling the weight of the newsprint, looking at the layouts, the typefaces, the way local editors construct leads, the opinions on the editorial page, the choice of comics.

But newspapers are going to die, and there's not much anyone can do about it. They will be replaced by something different, and with luck, something better -- just as the PC replaced the typewriter and adding machine.

With Loss Comes Heartache, Nostalgia

But something will be lost too, an essence and an experience that future generations won't even remember -- just as we can't remember what it was like to live in a world without electricity, where people gathered around the radio in the parlor on Sunday nights, or where streets were filled with only horses and skies only with clouds.

These losses, especially when they come in staccato bursts, as they do right now, create an ache in the heart, a kind of cyber-sickness that arises not only from mere nostalgia but from the sense that those larger entities by which we've defined both the world and ourselves have become extinct, leaving only … us.

For example, should the current trends continue, and the San Jose Mercury-News disappears, there will be no full-time employer in my career that still exists -- a very lonely thought, especially when I look back over my life and try to put it into a larger context.

And I suspect I'm not alone. I sense that whenever I read someone arguing, as many reporters are doing now, that something as venerable and influential and important as newspapers can never go away, what they are really saying is that they can't imagine their place in a world without them. They can't imagine telling their grandchildren about the work they did in their lives -- and seeing only blank stares in return. They don't want to be the tail end of a multicentury parade.

Nostalgia Won't Stop Technology

But none of us can hold back the waves of technology as they roll past. And they have only just begun. Next to go will be the telephone industry. Three days ago my 14-year-old discovered Skype, the free Internet phone network. Two days ago he joined a party line call on Skype with six of his buddies, talking and laughing as he swapped music image files with the others. Today he talked with a girl he met last month in England. The Skype interface is still pretty spartan, but who cares? It works. Six months ago I couldn't believe that eBay would pay $4.1 billion for Skype, a company with no real revenue model. Now I'm beginning to think eBay got a steal.

After that? Cable television. The whole à la carte debate is really the surfacing of frustration with cable's monolithic offerings in a world of increasing mass customization and choice. Cable has its own Skype lurking somewhere in the future. So does the movie industry -- when large plasma television screens display just as much CGI as neighborhood multiplex screens, and home disk servers can store dozens of hours of video, why would anyone go to the movie theater?

Meanwhile, with Rush Limbaugh podcasting and Howard Stern going to satellite radio, local radio as we know it faces its own oblivion. Local content -- talk, sports, traffic, news -- will survive for a while; but, as with newspapers, once the audience drops below a certain threshold advertisers will walk away, and even the local stuff will find a new distribution channel (automotive Internet, podcasting, cellular).

And there is much more to come after that -- trade magazines, traditional book publishing (though not books yet), and network television, among others. Each, when it goes, will take a sophisticated culture and a vast history with it. And each will leave an ache among those who remember and, at most, a mild curiosity among those who don't.

Social Networks Paving the Path

But technology also giveth even as it taketh away. The great thing about entrepreneurs is they have a sixth sense for voids -- even emotional ones -- and rush to find a way to fill them.

Thus, even as we suffer through the dislocation of watching one great cultural institution after another vanish, with the creeping sense of isolation and anomie we feel at the sight of all of this change, new digital institutions are already arising to replace them. And none is more important than social networks.

Social networking is less a process than an emotion. It fills the growing need of people to connect in a world with fewer and fewer traditional modes of connection. That's why, even though they are as yet relatively undefined (for example, they have no established revenue model) they are taking off like wildfire, and showing up almost everywhere.

Almost every young entrepreneur I know is developing a company built upon some sort of social network. Monday I was down in Hollywood visiting Jeff Skoll, eBay's first CEO, who is now celebrated as the producer of this year's hottest, most socially engaged movies ("Syriana," "North Country," "Good Night and Good Luck"). He talked about building social networks of activists around movie Web sites.

But to appreciate the sheer power of social networks you need look no further than MySpace, which has grown faster than any institution in memory. Tens of millions of kids (including my oldest) now visit MySpace every day, swapping photos, making connections and building a very sophisticated subculture (when my son wants to represent somebody as an "emo" he pretends to hold a digital camera at arm's length and turns his head away in profile -- the classic emo pose for a MySpace picture).

MySpace and Skype, not newspapers and telephones, will be the institutions these kids will one day look back upon with nostalgia. And they will chuckle in remembrance of terms like "MySpace Whore," which is a person with more than 400 friends on the site, as we do rotary dials and phone numbers with letters in them.

So, even as my heart wants to call 2006 the year of pandemic cyber-sickness and the widespread death of institutions, my head tells me that it will really be the year of social networks.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michael S. Malone, once called the Boswell of Silicon Valley, is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years, beginning with the San Jose Mercury-News, as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, the Economist and Fortune, and for two years he was a columnist for The New York Times. He was editor of Forbes ASAP, the world's largest-circulation business/tech magazine, at the height of the dot-com boom. Malone is best known as the author or co-author of a dozen books, notably the best-selling "Virtual Corporation." Malone has also hosted three public-television interview series, and most recently was co-producer of the celebrated PBS miniseries on social entrepreneurs, "The New Heroes." He has been the ABCNEWS.com "Silicon Insider" columnist since 2000.

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