Web 2.0: IT Revolution Or Pandora's Box?

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Is this the next culture-changing IT revolution, or a Pandora's box unleashing devastating changes we'll only understand after it's too late?

The question threaded its way throughout this week's Web 2.0 Summit, which drew a glittering collection of tech luminaries to San Francisco to discuss the Web's evolution and pitch their latest products and services. At the show's heart was an intense focus on platforms like Facebook and MySpace, networking sites that attempt to chart out the "social graph" of users' personal and professional connections.

Entrepreneurial true believers cast such sites as a major new technology frontier. Commenting on Facebook's move in May to open site APIs and encourage developers to treat Facebook as a platform, investor and entrepreneur Dave McClure called it "the most significant event that's happened in the last five years in the Internet, perhaps second only to Google's IPO."

Others went even further. Ali Partovi, who sold the last company he founded to Microsoft and now runs music social networking service iLike, said his development team studied Facebook's platform plans and "came away with the conclusion that this could be the greatest paradigm shift in technology since the launch of the Internet itself."

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MySpace tossed more fuel on the fire by announcing plans to follow Facebook into the platform market. MySpace will open its currently fairly closed infrastructure to enable deeper development and application monetization "within the next couple of months," MySpace CEO Chris DeWolfe said Wednesday at one of the conference's marquee discussion sessions.

MySpace's approach will be more guarded than Facebook's and will require applications to be vetted before being set loose on the service.

"The idea is to make sure that the applications are safe and secure," DeWolfe said. "At the end of the day we expect the majority of these applications will make it on to MySpace. We will have a sandbox, but it should be pretty easy for applications to get through."

Application developers who have chosen to build around social-network platforms say the sites offer spectacular economics of scale. ILike originally intended to build an independent network to connect people with similar musical tastes. But after taking a look at Facebook's platform offerings, the team decided to halt its current work and devote its resources to building on Facebook, leveraging the site's infrastructure instead of creating their own. The choice also enabled iLike to tap into Facebook's audience, which Facebook estimates at 45 million active users. The gamble paid off: Within 24 hours of going live on Facebook, iLike had more registered users than it had attracted in the entirety of its previous, independent incarnation. And then, it kept growing, sending iLike's engineers scrambling to buy, beg and borrow as many servers as they could get their hands on over a long holiday weekend to keep pace with traffic demands.

"We're confident that Facebook is the right place to put the bulk of our investments," Partovi said. "It's extremely Darwinian. It rewards hard work and valuable applications."

But the dark side of the seductive ease Web 2.0 applications and platforms offer is the rapidness with which they can change -- or disappear. In a popular, contrarian conference session titled "Web Two Point No: And You Thought Microsoft Was Bad," legal scholar Jonathan Zittrain mapped out his concerns about the extensive legal and technical power hosted software services place in the hands of the vendors that run them.

Next: Government bugs and iBricks Facebook's developer terms of service is a draconian document full of far-reaching clauses, like the one requiring developers to pledge that their content is not obscene or illegal "in any jurisdiction," and the one noting that if Facebook begins charging fees for its platform services, it can amend the fees "at any time in our sole discretion," with developers' continued use of the platform counting as their assent to the changes. Meanwhile, Google's API terms of service prohibit using its branded products in ways "defamatory" or "otherwise objectionable" to Google -- a sweeping requirement that would kick off a firestorm of criticism if a company like Microsoft tried to implement it.

Hosted software vendors get away with such terms partially because most haven't yet abused them and partially because their services can be so indispensable that users will gloss over hypothetical future problems to take advantage of tangible, current benefits. Asked about Facebook's terms, which give it the right to unilaterally cut any application off at any time, Facebook CEO Mark Zuckerberg said users will simply have to trust that Facebook doesn't have any nefarious plans.

"Our intent there isn't to go around yanking applications," Zuckerberg said. "We needed to make sure that we had the flexibility to do what we need to do as the business platform grows. ... I don't think the intent there is as egregious as the language might sound."

Omar Kahn, president of Internet development and services firm ISL in San Francisco, uses a number of Google services in his business, such as Google Analytics. ISL is making the calculated risk to trust Google with its data, a decision based in part on the immense business vault proposition Google's assortment of free services offer, he said.

"I think we have a lot of trust for Google as a company -- for them, and nobody else," Khan said. "They've enhanced our ability to do business so much."

Increasingly, though, hosted services open even well-intentioned vendors up to interference and data interception by higher powers. The problems aren't purely hypothetical: Zittrain came prepared with a stack of legal filings and news reports detailing unexpected, tech-enabled government intrusions on citizens' civil liberties. Law enforcement authorities have used mobile-phone microphones to secretly eavesdrop on conversations and have tapped an unnamed, OnStar-like vehicle communications system to covertly monitor passengers' discussions. Outside the criminal justice realm, Apple's recent "iBrick" iPhone flap illustrated how easily providers can alter or rescind services they control.

"The vendor can change what happens at any time, and the vendor can be asked to change what happens at any time by higher governmental authorities," Zittrain said. "This is a completely different technological world, and because it is only a year old, we have no idea about the Pandora's box we have opened."

Daunting as that idea is, solutions providers may have little choice but to ride the new wave and see where it leads. Several at the show said the benefits new Web technologies bring are so overwhelming that they trump ideological concerns. "The reason people use these platforms is that they can bring something to market quickly," said Alistair Croll, vice president of product management for Cordiant, a Montreal-based monitoring and performance analytics developer. Despite his reservations about the "very scary precedent" set when content management system operators are granted the technical ability to control the content itself, Croll uses some social networking and hosted Web services for the convenience they offer.

Steve Glauberman, CEO of interactive services agency Enlighten in Ann Arbor, Mich., is increasingly incorporating sites like YouTube, Facebook and MySpace into his marketing work for clients. To neglect such sites would be a disservice to his customers, he said.

"You need to be where your audience is," Glauberman said. "For many companies, their audience is on MySpace."