Thursday, November 13, 2008 Ng: Effects of the financial crisis By Wilson Ng Wired Desktop
PEOPLE are discussing whether the present global financial crisis will be a boon or a bane to open source and Web 2.0.
Due to these business models, an individual can get free software or gain free—or at less cost—access to certain applications or services (in most cases, though, you have to pay for additional premium features, or service support) on the Internet. You can get Yahoo Mail, download Firefox, access YouTube or create an account on Friendster, Skype or Wordpress at no cost.
Some say that Web 2.0 and open source will become weaker. Obviously, with the economic crisis, venture capital funding will start to dry up or at least slow down. After all, a lot of the Web 2.0 and open source are not exactly making money.
In past few years, Sun Microsystems has contributed and invested a lot on open source. And while this has expanded the company’s market share, it has caused heavy losses on Sun Microsystems. After all, getting 100 non-paying customers is not exactly as profitable as keeping five good paying customers.
A lot of very popular applications, like YouTube MySQL, Facebook, Friendster, Twitter and Hotmail have been popular for years, but it does not mean they are earning. When the economy becomes bad, the willingness to fund these campaigns could be diminished.
For instance, Ebay had to write off a big investment in Skype, even as it gets more and more users because it was not earning as expected.
Contributing to the theory that the bad economy will be bad for freeware is the theory that people will contribute and share their expertise for almost nothing because they want to accomplish something other than financial gain, and you can only do that if your basic needs are met. In short, a programmer who has a stable job and good income would think about creating something for free; but when is out of job, his priority will be to earn a living.
The other side of the coin says that the financial difficulties of companies will make them more open to getting cheaper or free software.
Only time can tell who wins this argument.
Last week, I commented on the speed of the American election process. In fact, a few hours after the polls closed, the winner—Barack Obama—was already declared.
Many say that Obama would be the first of a new generation of presidents who are tech savvy. In fact, many have ventured to say that his ability to raise more funds and also command more votes was because of his use of various technical tools.
For instance, Obama was one of the top five featured personalities in Twitter, and his profile in Facebook has over three million supporters and followers.
In the selection of vice president, he did something unprecedented. He announced that his supporters, if they register their cell phones, will hear directly from him his choice of vice president, instead of just reading about it in the news. Didn’t this endear him more to the majority?
I would like to share two additional instances which support the role of technology in our lives. In one survey conducted by Pew, up to 80 percent of Americans say that technology have improved their ability to do their jobs while 73 percent say that technology has improved their abilities to share
Ideas. Fifty-eight percent, on the other hand, say that technology allows them more flexibility in the hours that they work.
In another encouraging survey, 56 percent of online retailers say that they expect sales to grow by about 15 percent. This is under the environment when almost all stores foresee their sales to drop—substantially for many.
