Are Apps Killing the Web - and the Value It Created?

We are witnessing a transformation of potentially significant proportions that is taking place without much public commentary.

Most of the debate today about the web has to do with net neutrality, the desire of the big telecom and internet service providers to charge more for certain users, especially those like Netflix, that require more data.

And that is an important issue. Access to the web has economic and political implications that may well, for the future, define the differences between knowledge and ignorance, poverty and wealth, success and failure. Much of the opportunity that the web offers is based on its universality and on the information it provides to make people more productive, more connected and more effective in whatever realm they operate.

But there is some evidence to suggest that the issue may have already been decided by trends in a related realm, as the following article explains. By which we mean the proliferation of apps which effectively privatize the knowledge and the access to it which the web has, to a great degree, publicly provided until recently.

This is not to say that there is a wrong or a right. But there is a difference. The app imperative has given companies like Apple and Google more control over content. What gets provided and who gets to see it. App-based models enable greater privatization of revenue, improving profits and concentrating them.

The question is whether this fenced in model will end up destroying the wealth creation potential of the web which was based to a great degree on scale. Profits were diffused over a much wider collection of participants, but that very breadth also broadened the market.

By fencing in pieces of the market in order to collect a greater percentage of the available financial output, the organizations dedicated to this approach may well be optimizing returns in the short term. And certainly the current iteration of the financial markets, with their emphasis on high-speed algorithmic trading, display a preference for a short term sometimes measured in nanoseconds.

But commerce and the markets from which they both benefit and to which they contribute have, whether in tech or food or any other product, generally flourished due to the prospect of a longer term opportunity to create and distribute wealth. And it is the future of that broader vision which may be at risk. JL

Christopher Mims reports in the Wall Street Journal:

On phones, 86% of our time is spent in apps, and just 14% is spent on the Web. Underneath all that convenience is something sinister: the end of the openness that allowed Internet companies to grow into some of the most important companies of the 21st century.

The Web—that thin veneer of human-readable design on top of the machine babble that constitutes the Internet—is dying. And the way it’s dying has farther-reaching implications than almost anything else in technology today.

Think about your mobile phone. All those little chiclets on your screen are apps, not websites, and they work in ways that are fundamentally different from the way the Web does.

Mountains of data tell us that, in aggregate, we are spending time in apps that we once spent surfing the Web. We’re in love with apps, and they’ve taken over. On phones, 86% of our time is spent in apps, and just 14% is spent on the Web, according to mobile-analytics company Flurry.

This might seem like a trivial change. In the old days, we printed out directions from the website MapQuest that were often wrong or confusing. Today we call up Waze on our phones and are routed around traffic in real time. For those who remember the old way, this is a miracle.

Everything about apps feels like a win for users—they are faster and easier to use than what came before. But underneath all that convenience is something sinister: the end of the very openness that allowed Internet companies to grow into some of the most powerful or important companies of the 21st century.

Take that most essential of activities for e-commerce: accepting credit cards. When Amazon.com  AMZN in Your Value Your Change Short position made its debut on the Web, it had to pay a few percentage points in transaction fees. But Apple  AAPL in Your Value Your Change Short position takes 30% of every transaction conducted within an app sold through its app store, and “very few businesses in the world can withstand that haircut,” says Chris Dixon, a venture capitalist at Andreessen Horowitz.

App stores, which are shackled to particular operating systems and devices, are walled gardens where Apple, Google,  GOOGL in Your Value Your Change Short position Microsoft  MSFT in Your Value Your Change Short position and Amazon get to set the rules. For a while, that meant Apple banned Bitcoin, an alternative currency that many technologists believe is the most revolutionary development on the Internet since the hyperlink. Apple regularly bans apps that offend its politics, taste, or compete with its own software and services.

But the problem with apps runs much deeper than the ways they can be controlled by centralized gatekeepers. The Web was invented by academics whose goal was sharing information. Tim Berners-Lee was just trying to make it easy for scientists to publish data they were putting together during construction of CERN, the world’s biggest particle accelerator.

No one involved knew they were giving birth to the biggest creator and destroyer of wealth anyone had ever seen. So, unlike with app stores, there was no drive to control the early Web. Standards bodies arose—like the United Nations, but for programming languages. Companies that would have liked to wipe each other off the map were forced, by the very nature of the Web, to come together and agree on revisions to the common language for Web pages.

The result: Anyone could put up a Web page or launch a new service, and anyone could access it. Google was born in a garage. Facebook  FB in Your Value Your Change Short position was born in Mark Zuckerberg ’s dorm room.

But app stores don’t work like that. The lists of most-downloaded apps now drive consumer adoption of those apps. Search on app stores is broken.

On phones, 86% of our time is spent in apps, and just 14% is spent on the Web, according to mobile-analytics company Flurry. Bloomberg News

The Web is built of links, but apps don’t have a functional equivalent. Facebook and Google are trying to fix this by creating a standard called “deep linking,” but there are fundamental technical barriers to making apps behave like websites.

The Web was intended to expose information. It was so devoted to sharing above all else that it didn’t include any way to pay for things—something some of its early architects regret to this day, since it forced the Web to survive on advertising.

The Web wasn’t perfect, but it created a commons where people could exchange information and goods. It forced companies to build technology that was explicitly designed to be compatible with competitors’ technology. Microsoft’s Web browser had to faithfully render Apple’s website. If it didn’t, consumers would use another one, such as Firefox or Google’s Chrome, which has since taken over.

Today, as apps take over, the Web’s architects are abandoning it. Google’s newest experiment in email nirvana, called Inbox, is available for both Android and Apple’s iOS, but on the Web it doesn’t work in any browser except Chrome. The process of creating new Web standards has slowed to a crawl. Meanwhile, companies with app stores are devoted to making those stores better than—and entirely incompatible with—app stores built by competitors.

“In a lot of tech processes, as things decline a little bit, the way the world reacts is that it tends to accelerate that decline,” says Mr. Dixon. “If you go to any Internet startup or large company, they have large teams focused on creating very high quality native apps, and they tend to de-prioritize the mobile Web by comparison.”

Many industry watchers think this is just fine. Ben Thompson, an independent tech and mobile analyst, told me he sees the dominance of apps as the “natural state” for software.

Ruefully, I have to agree. The history of computing is companies trying to use their market power to shut out rivals, even when it’s bad for innovation and the consumer.

That doesn’t mean the Web will disappear. Facebook and Google still rely on it to furnish a stream of content that can be accessed from within their apps. But even the Web of documents and news items could go away. Facebook has announced plans to host publishers’ work within Facebook itself, leaving the Web nothing but a curiosity, a relic haunted by hobbyists.

I think the Web was a historical accident, an anomalous instance of a powerful new technology going almost directly from a publicly funded research lab to the public. It caught existing juggernauts like Microsoft flat-footed, and it led to the kind of disruption today’s most powerful tech companies would prefer to avoid.

It isn’t that today’s kings of the app world want to quash innovation, per se. It is that in the transition to a world in which services are delivered through apps, rather than the Web, we are graduating to a system that makes innovation, serendipity and experimentation that much harder for those who build things that rely on the Internet. And today, that is pretty much everyone.