Last Updated Dec 29, 2009 1:40 PM EST
Back when "Web 2.0" was still a shiny new moniker, search engines had unequaled power. They were the gatekeepers between content producers (like newspapers) and the eyeballs of readers, so much so that publishers like Rupert Murdoch came to think of search engines as "plagiarists" and "content kleptomaniacs." If you were putting content online, you had essentially one option: play to search engines by SEO'ing like crazy and buying ads on Google (GOOG). It was, as some histrionic pundits termed it, the "death" of the destination website. If you didn't play by Google's rules, the penalties were harsh: getting bumped down in Google's PageRank has killed at least a handful of startups.
But in 2010, Google won't be the same Web Zeus we've come to revere. How can we tell? Lately, the search giant has shown an unprecedented spirit of compromise, to put it diplomatically: as BNET reported earlier this month, it caved to pressure from paid content providers like News Corp. (NWS), promising to index only article previews, not entire articles, and to end its first-read-free system. It also given publishers more control over how their content is viewed on Google and Google News. A year ago, when Google was still at the heights of its power as content gatekeeper, these concessions would have seemed unthinkable. "There are people who think we are plenty full of ourselves right now," said Google Technology Director Craig Silverstein to MSNBC in September 2008, as the company rolled out products like Chrome and Google Books.
So where's the power going? To content silos like Facebook and Twitter, who are controlling more and more of the data we, the users, consider valuable. Facebook's power lies even beyond its own URL; the company has made itself the "new gatekeeper" with its Facebook Connect login system and its portable comment system, which other websites can use. (Over 80,000 independent sites are using Facebook Connect, according to our sister site, CNET.) Google and Bing have made haste in co-opting this data by striking real-time search deals with Facebook and Twitter. Facebook hasn't reciprocated the compliment; though it has close ties with investor and ad partner Microsoft (MSFT), the company apparently hasn't saw fit to stick a Bing Web search box anywhere in sight. Who needs search when you have the Web's new goldmine in your own backyard?
Older tech giants are privy to the growing power of content providers, which is why many of them are tailoring their businesses to replicate (or dovetail with) Facebook's and Twitter's products. Apple (AAPL) is one salient example: the iTunes maker recently acquired streaming music service Lala, which allows users to backup their music libraries online and serves them new music they might like. (Google indexes Lala's music in its new Music Search feature.)
Music isn't the only theater for Apple's new role as content silo. It's also working hard to become a hyperlocal content silo. This summer, it purchased map software startup Placebase, and several of Apple's patent filings this fall suggest it's interested in location-aware mapping frameworks. Microsoft is following suit. The company announced this month that it was building a user-generated 3-D mapping system in Bing Maps. The always-tardy print publishers have also gotten wind of their newfound power: Hearst, Conde Nast and three other publishing companies have created a content syndicate to build a kind of "app store" for digital newspapers and magazines, instead of going through existing app stores like Apple's.
No company has anticipated the power shift better than Google itself, which looks more and more like a content provider with every passing week. It ditched map-data provider Tele-Atlas and is developing its own hyperlocal map database. It's trying to buy Yelp, which hosts a massive database of user-generated restaurant and business reviews. As one analyst told the New York Times: "Google doesn't need any technology that Yelp has to offer." Instead, he says, Google is looking to own "content, a community" and a localized sales channel.
Google is also trying to turn search itself into a form of content. Earlier this month it rolled out "personalized" search results, explained in the YouTube video below, which industry blog SearchEngineLand calls "the biggest change that has ever happened in search engines."
So why is it so valuable to be a content silo, anyway? Because hosting all that stuff means you have a lot information on your users -- information that can be acutely monetized through super-targeted advertising, something right up Google's alley. This is how the publishing companies rose to power, too. In their heyday, magazine and newspaper companies were, as TechCrunch aptly notes, really just customer database companies that could command big ad money.
Now Web companies are deploying that same business model, with a more advanced customer database -- status updates, profile information, comments, "likes," photos, music -- than the print-media publishers ever dreamed of. The print folks will have a chance to redeem themselves for missing the whole "Web" boat the first time around. If they don't, the new content silos will once again outfox them to the tune of billions.