I just noticed that, at this particular moment in time, the top four posts on Tech Memeorandum are New York Times articles, and of the top ten, six are from the Times. Sometimes I think that if it weren’t for the shadow of the cathedral, there’d be no place to set up the bazaar.

In his influential 1995 book Being Digital, Nicholas Negroponte wrote that, by freeing us from “the baggage of history,” “digital technology can be a natural force drawing people into greater world harmony.” The sense that the internet transcends the geopolitical boundaries of the physical world, that it creates a harmonious supranational community freed from old geographical and ethnic divisions, has continued to shape discussions and perceptions of the internet. It’s often said, for instance, that the very way the internet works – by distributing small packets of data through a global, “centerless” electronic web – is antithetical to national borders and will tend to thwart governments bent on imposing control over the flow of information.

Legal scholars Jack Goldsmith and Timothy Wu take a very different view. In Digital Borders, an article in the current issue of Legal Affairs that’s adapted from their forthcoming book Who Controls the Internet?, Goldsmith and Wu argue, persuasively, that the internet will come to be carved up along traditional geographic lines and that, in fact, this process is already well advanced: “the Internet is not, as many in the 1990s believed, an unstoppable technological juggernaut that will overrun the old and outdated determinants of human organization. To the contrary, the Internet itself is taking on the characteristics – good and bad – of the governments and people beneath it in different parts of the world.”

Goldsmith, a Harvard Law School professor, and Wu, from Columbia Law School, use a story about Yahoo! to underscore their point. In May 2000, the company was ordered by a French judge to prevent French web surfers from accessing Yahoo!-hosted auction sites that sold Nazi memorabilia. (Selling such memorabilia violates French laws passed in the wake of World War II.) Yahoo! founder Jerry Yang dismissed the ruling, saying, “We are not going to change the content of our sites in the United States just because someone in France is asking us to do so … Asking us to filter access to our sites according to the nationality of web surfers is very naïve.” His reaction, write Goldsmith and Wu, was to be expected:

Yang’s defiance reflected turn-of-the-century assumptions about the Internet’s architecture. Internet protocol addresses (each computer’s Internet ID), Internet domain names (such as mcdonalds.com or cnn.com), and e-mail addresses were not designed to indicate the geographical location of computers on the Net. These architectural “facts” meant that most users of 1990s Internet technology did not know where their e-mail messages and web pages were being viewed, and thus what laws in which nations they might be violating. Yahoo! said that it didn’t know where its users were, and which laws it should comply with.

At the trial, however, it became quite clear that Internet addresses could be – and routinely were – traced in such a way as to identify their geographic location – “with over 99 percent accuracy at the country level.” Although “Yahoo!’s lawyers reiterated that it was impossible to identify and filter out French visitors to the firm’s U.S.-based websites,” it was revealed that Yahoo was actually hosting the auctions on servers in Sweden for the purpose of distributing them in Europe. Moreover, the judge noted that “Yahoo! greeted French visitors to its U.S. website with French-language advertisements. This showed that Yahoo! was tailoring content for France and that, to some extent, it could identify and screen users by geography.”

In January 2001, Yahoo! backed down. “Soon after,” write Goldsmith and Wu, “the Chinese government insisted, as a condition of access to Chinese markets, that Yahoo! filter materials deemed harmful or threatening to the Communist Party’s rule. Yahoo! agreed to China’s demands, and by 2005, the company that was recently the darling of the Internet free-speech movement had become an important agent of thought control for the Chinese government.” By then, Yang had changed his tune about filtering content. “To be doing business in China, or anywhere else in the world,” he said, “we have to comply with local law.”

China’s use of filtering to curtail free speech represents “the downside of the bordered Internet,” say Goldsmith and Wu, but that doesn’t mean that the bordered internet is on balance a bad thing:

The bordered Internet is widely viewed to be a dreadful development that undermines the great network’s promise. But the Net’s promise was not fulfilled by the 1990s vision of an Internet dominated by the English language and the idiosyncratic values of the American First Amendment. People who use the Internet in different places read and speak different languages, and they have different interests and values that content providers want to satisfy. An Internet that accommodates these differences is a more effective and useful communication tool than one that does not.

People in different places, for example, disagree about what types of information they deem harmful. These differences are reflected in different national laws, and government officials charged with enforcing national values must enforce these laws, as cases like Yahoo! make clear … To understand the virtues of a bordered Internet, consider the opposite: an Internet dominated by a single global law. When you choose a single rule for six billion people, odds are that several billion, or more, will be unhappy with it. Is the American approach to Nazi speech right, or is the French variant? To what degree should gambling and pornography be allowed? Should data privacy be unregulated, modestly regulated, or heavily regulated? A single answer to these and thousands of other questions would leave the world divided and discontented.

The proposition that the internet can promote “greater world harmony” sounds lovely, but it begs a question: Harmony on whose terms? As Goldsmith and Wu imply, the idea of One Internet for All may be an expression of digital imperialism as much as anything else.

A perceptive Slashdotter notes that we just witnessed a remarkable turn of events in the computer business. Consider:

October 6, 1997: “When it comes to the state of Apple Computer, everyone has an opinion. And at the Gartner Symposium and ITxpo97 here today, the CEO of competitor Dell Computer added his voice to the chorus when asked what could be done to fix the Mac maker. His solution was a drastic one. ‘What would I do? I’d shut it down and give the money back to the shareholders,’ Michael Dell said before a crowd of several thousand IT executives.”

January 13, 2006: Apple’s market value surpasses Dell’s:

Dell: $71,970,702,760

Apple: $72,132,428,843

It’s good to know that fortune’s fickleness remains intact.

“Open source is not a religion. It is not an ideology. It can be used for both good and bad. It does not inhabit the higher moral ground, nor is it a more ethical way to conduct business. It just is, and it will continue to grow and expand.” So writes John Mark Walker in his level-headed article There Is No Open Source Community.

Dismissing the “conventional wisdom” that open-source software represents a movement or a cause or an ideal – the good side in the “struggle to protect users from the malevolent intent of large software companies” – Walker shows that the rise of open source is at heart an economic phenomenon. It’s an inevitable consequence of the dramatic reduction in the costs of software production and distribution resulting from the enormous economies of scale made possible by the internet. And economics will, in turn, determine where open source takes over and where it doesn’t.

For widely used software, he argues, the internet pushes prices inexorably toward zero, at which point “software developers have two choices when trying to win over users: (1) add features not available elsewhere, and (2) release the source code. There is no other currency of value that developers can extend to users.” And because open source development is the most efficient way to produce valuable new features, “open source becomes a necessity in a competitive market.” For more specialized software, where the internet-fed economies of scale are less pronounced, open source won’t take hold: “there is simply no incentive to release open source software in those markets.”

Walker does a good job of explaining why it’s economic, rather than ideological, forces that are determining the course of the software industry. When any product becomes a commodity, and when the marginal costs of producing it hit zero, then that product is going to become free. For anything other than the most specialized software – software written for, essentially, a single purpose – marginal costs are hitting zero. Once the program exists, there’s no cost for creating and distributing a new copy of it or extending it to a new user. The only question, then, is whether or not a given piece of software is a commodity or whether there continues to be true differentiation (in the eyes of users) among available choices. Users, it’s clear, are deeming more and more types of software to be commodities, and open source continues to expand apace.

There’s another important economic force at work here that Walker doesn’t mention. It’s the fact that many companies have a vested interest in turning software into a free resource and, cynically or not, can use the “open source community” to further that interest. For these companies – think IBM or Red Hat or Google or even Intel – software is a complement to their core product or service, and as Joel Spolsky points out in his excellent book Joel on Software, “demand for a product increases when the price of its complements decreases. In general, a company’s strategic interest is going to be to get the price of their complements as low as possible … Understanding this strategy actually goes a long, long way in explaining why many commercial companies are making big contributions to open source.” By making software free, you can expand demand for your own products – and maybe hurt a competitor to boot.

So if you’re contributing to an open source initiative to make the world a better place, that’s great – but you probably won’t want to pay too much attention to the underlying economics. You may discover that you’re just a cog in a very big machine that’s shifting dollars from one “malevolent” big company to another.

UPDATE: Matt Asay provides a good critique of Walker’s essay.

The Register, displaying its usual British reserve, calls Google’s new video store “a really crap web site,” featuring “a dismal interface wrapped in a shambles of a delivery mechanism.” Google’s other new innovation, the Google Pack, is also suffering some rough reviews. Paul Thurrott, writing on the Windows SuperSite, details his unpleasant experience installing the pack: “I consider myself to be reasonably competent with a PC, and I was already familiar with most of the applications found in Google Pack. But it still took me about 90 minutes from start to finish, along with several system reboots, to get this suite of applications up and running on my test PC. There’s just no real integration here, and the fact that many of these applications require so much updating speaks poorly of this effort.”

Google Pack and Google Video are both, according to Google, in “beta.” So are a lot of other publicly available Google products, like Google Groups, Google Blog Search, Google Book Search, Google Reader, Google Web Accelerator, Google Scholar, and even the venerable trio Gmail, Froogle and Google News. This approach of constantly launching new products as betas has earned Google considerable praise. It’s been held up, for instance, as a new model for how software companies can get new products or features out into the marketplace quickly, then improve them as they’re used. It’s also been noted that calling new products “betas” may insulate Google from lawsuits.

But while I used to think the beta approach was a pretty nifty idea, now I’m having my doubts. While Google has certainly proved that it can produce wonderful products, like its bread-and-butter search engine and its addictive Google Earth, a lot of those beta products – and not just the new ones – are pretty lackluster. Froogle, for example, is unpleasant to use, and Blog Search is just plain dreary. The tossing of half-baked products onto the web is starting to look less like a brilliant idea than a sign of hubris. You get the sense that the great minds at Google believe that we lowly users should be grateful for any scrap they throw out to us. Google may be in the process of creating a dysfunctional “beta culture” that puts the interests of its engineers ahead of the interests of its customers. Eventually, if it keeps pumping out mediocre beta products and letting them lie around more or less indefinitely, it will start to tarnish its brand, if not wear out its welcome. We all know success breeds hubris, and we know what hubris breeds, too.

Yes, there’s a certain thrill to feeling like you’re a beta tester for the world’s coolest company. But once the thrill wears off, you’re just annoyed. You start to remember why they call them betas.

Maybe the most interesting news to come out of Macworld is Apple’s quiet confirmation that you’ll be able to install and run Windows on its new Intel-based computers. Apple’s top marketer, Phil Schiller, told the Associated Press that “the company won’t sell or support Windows itself, but also hasn’t done anything to preclude people from loading Windows onto the machines themselves.” He also felt compelled to get in a little dig: “”If there are people who love our hardware but are forced to put up with a Windows world, then that’s OK.”

Now, we’ll finally get to see if Windows users actually do suffer from Mac-envy. Will business travelers, for instance, buy the new PowerBooks – sorry, MacBooks – and use them as Windows machines? Anyone have any insight into the ramifications? Is this going to be a big deal, or trivial?

UPDATE: Venerable Apple writer Henry Norr sees big potential in running Windows on Macs, but Nate Mook rains on the parade.

The first of my five predictions for 2006 was this: “A free online game, supported by advertising and product placement, becomes widely popular, threatening the traditional business model of the gaming industry.” Somebody immediately posted a comment reminding me that one ad-supported online game, Neopets, has already become widely popular – among kids. That’s absolutely right (have you read the Wired piece on “the Neopets addiction”?), but we’re still awaiting the mainstream game that overturns the old pay-for-the-software-and/or-the-subscription model. The game that makes all games free.

It’s certainly getting closer. This morning, Business Week reports that an ad agency specializing in in-game advertising has just been launched. The company, Engage In-Game Advertising, claims it will provide “strategic planning and placement services targeted specifically for videogame advertising,” and it announced its first client: Subway. An Engage executive says, “Since it’s a relatively new medium, many companies are unaware of the promotional reach and creative flexibility videogame advertising can provide when trying to target the elusive 18- to 34-year-old male audience.”

The video game industry had weak sales last year, for a variety of reasons. But I think the really big disruption, the one that will overturn the business models of both game makers and console makers, lies just ahead.

But what really fascinates me is the idea of virtual advertising creeping in to virtual worlds. No doubt we’ll also begin to see “real” virtual stores being constructed within games – so you won’t have to leave the game to, say, shop for and order a new Alienware PC. Having the biggest virtual mall will become a selling point for games. And we’ll see entrepreneurs begin to open “virtual” virtual stores that will actually compete with one another to sell magic potions and broadswords and other stuff to use within the game. And those stores will, of course, buy advertising in the game – and they’ll even have to bid against each other for the prime spots. The economies of virtual worlds, already complex, will become, well, real.

Where does it end? I shudder to think.