The Master Switch: The Rise and Fall of Information Empires

“It is an underacknowledged truism that, just as you are what you eat, how and what you think depends on what information you are exposed to.”
“The importance of the outsider here owes to his being at the right remove from the prevailing currents of thought about the problem at hand. That distance affords a perspective close enough to understand the problem, yet far enough for greater freedom of thought, freedom from, as it were, the cognitive distortion of what is as opposed to what could be. This innovative distance explains why so many of those who turn an industry upside down are outsiders, even outcasts.”
“It is a vision to out-Darwin Darwin: “competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives.” Schumpeter termed this process “creative destruction.” As he put it, “Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.”
“Vail’s offers were, then, essentially the ultimatums that Genghis Khan made famous: join the network and share the wealth, or face annihilation. But Vail needn’t have looked so far back for a role model; in his own time, John D. Rockefeller had pioneered the “purchase or perish” model to build Standard Oil.”
“It’s the same old story,” he would say, years later; “the inventor gets the experience, and the capitalist gets the invention.”
“No, Zukor’s real opponents, as we’ve said, were the theater owners, recently organized in the First National Exhibitors Circuit. At 3,600 strong, they were still a mostly disaggregated and diverse mob, but as they held the power to decide what would be exhibited and what wouldn’t, they controlled most of the industry’s revenues.”
“Yet if all resources for solving any problem are directed by a single, centralized intelligence, that mastermind has to be right in predicting the future if innovation is to proceed effectively. And that’s the problem: monopoly presumes a prescience that humans are seldom capable of.”
“The reason such prototypes are sustainable, however briefly, and ultimately important is not their capacity to do what the technology is meant to do; rather, their value is in exposing a working model to more minds that might muse upon it and imagine a more evolved version.”
“The case for industry breakups comes from Thomas Jefferson’s idea that occasional revolutions are important to the health of any system. As he wrote in 1787, “a little rebellion now and then is a good thing, and as necessary in the political world as storms in the physical.… It is a medicine necessary for the sound health of government.”
“Critics like the law professor Cass Sunstein go so far as to describe the fragmenting powers of cable and other technologies, notably the Internet, as a threat to the notion of a free society. “In a democracy,” writes Sunstein, “people do not live in echo chambers or information cocoons. They see and hear a wide range of topics and ideas.” There is a bit of a paradox to this complaint that must be sorted out. The concern is not that there are too many outlets of information—surely that serves the purpose of free expression that sustains democratic society. Rather, the concern is that in our society, we have been freed to retreat into bubbles of selective information and parochial concern (Sunstein’s “information cocoons”), in flight from the common concerns we must address as Americans. And so if the networks suffered from being uninteresting in the effort to alienate no one, they did at least tend to feed a sense of a common culture, a common basis of the national self now lacking. There is little to talk about around the proverbial water cooler in a nation segmented by divides of gender, generation, political inclination, and so on.”
“Unlike almost every other commodity, information becomes more valuable the more it is used. Consider the difference between a word and a pair of shoes. Use each a million times: the shoes are ruined, the word only grows in cachet. Every time you utter the word “Coke,” “McDonald’s,” or “Lululemon,” you are doing the brand owner a small service of marketing.”
“To understand what happened to AOL, imagine that the firm had been in the business of delivering pizzas by bicycle, until one day the pizza company bought its own fleet of cars. That is what the telephone and cable companies did to AOL.”
“An empire long united, must divide; an empire long divided, must unite. Thus it has ever been, and thus it will always be. —LUO GUANZHONG The Romance of the Three Kingdoms”
“And just as our addiction to the benefits of the internal combustion engine led us to such demand for fossil fuels as we could no longer support, so, too, has our dependence on our mobile smart phones, touchpads, laptops, and other devices delivered us to a moment when our demand for bandwidth—the new black gold—is insatiable.”