The End of the Internet

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Listen to this post: It was the summer of 2003, just weeks before I was set to move to Taiwan, that I decided to create a blog to document my journey. I had, at that point, had a GeoCities site, a Blogspot site, a site I built in Microsoft FrontPage and hosted…somewhere, so this was my fourth swing at the blog thing (it was the seventh that ended up being Stratechery). I was intrigued by a just-released piece of software that promised a five-minute install; it was called WordPress. It did, I must confess, take me much longer than 5 minutes to install WordPress: it turned out I needed to learn how to create a MySQL database and configure PHP; once you had all of those component pieces in place, then yes, it only took 5 minutes to install! I was thinking back to those days last week when news broke that every version of PHP had a critical bug that allowed for remote code execution on the host machine; Stratechery today still runs on WordPress, but that WordPress is managed by Pressable, an Automattic company. That meant that my site was patched before the vulnerability was disclosed, and it would be crazy for me — or anyone else — to do it any other way. It’s kind of insane to think that twenty-some years ago I was doing everything by hand without having any idea what I was doing, and that it was totally fine. That’s the Internet, though: an insane invention from a time that is, sadly, gone forever. The End of Blogs 2003 was, roughly speaking, right around the beginning of the blogosphere; yes, blogs existed — Dave Winer, often considered the father of blogs, started Scripting News in 1997, after early experiments with a personal site called DaveNet; Justin Hall started Links.net in 1994; Jorn Barger coined the term “weblog” for Robot Wisdom, also in 1997, and the influential kottke.org started in 1998 — but it was the early 2000s when blogs suddenly seemed everywhere, particularly in the political space: - Talking Points Memo, Andrew Sullivan and Boing Boing launched in 2000 - Instapundit, Little Green Footballs, and Dooce launched in 2001 - Matt Yglesias, Daily Kos, Eschaton, The Volokh Conspiracy, Power Line, Gizmodo, Gawker, paidContent, and Daring Fireball launched in 2002 - Ezra Klein, Marginal Revolution, ReadWriteWeb, and AVC launched in 2003 That political blogs featured so prominently speaks, I think, to both the power and peril of the Internet’s first transformation. Up to that point the Internet was mostly technologists, comfortable discussing the intricacies of text editors and programming languages with other nerds on BBSs, early forums, and mailing lists; it was the politically minded, however, that realized that the freedom to start your own publication that could reach everyone was a radical development. The goal was not to make money; it was to make a difference. Originally these new publications were novel; what soon became clear, however, is that they were the tip of a wave of content that would dramatically expand the web. Newspapers had influence by being geographic monopolies; early bloggers gained influence by being the first to a new medium. Ultimately, however, the real winner of the web was Google: as the amount of content became abundant, Google offered not distribution — which was free — but rather discovery; indeed, it’s because distribution was free that discovery became the most important part of the value chain. Many of those early bloggers made a decent amount of money from Google through its AdSense advertising program; by the end of the decade, however, the ads became more intrusive even as the payouts shrank, both because the inventory was limitless, and also because the most attractive ad slots were on Google Search. And so we saw one of the first examples of how the Internet fails: because everything is open, everyone has an opportunity, which means infinite competition, which is terrible for business. For many years I rued the fact I wasn’t one of those early bloggers; a decade later, however, I realized that I was actually just in time for a much more sustainable business model: subscriptions. I wrote in 2015’s Blogging’s Bright Future: It turns out, though, that there are more business models than simply advertising, as Sullivan himself sought to show. Sullivan was, for the last two years, supported by reader subscriptions to the tune of nearly one million dollars a year, and while many were skeptical of Sullivan’s efforts when he started, his ability to raise money shouldn’t have been a surprise: his is a singular voice — to put it in economic terms, Sullivan’s writing had a low elasticity of substitution — so people were happy to pay for something they couldn’t get anywhere else. Right there was the exact loyalty that Klein fears has been lost… I am, of course, acutely aware that there is a tradeoff when it comes to the subscription business model: by making something scarce, and worth paying for, you are by definition limiting your number of readers. Stratechery, though, serves a niche, and niches are best served by making more from customers who really care than from milking pennies from everyone. In short, the answer to drowning in abundance is to purposely limit your audience — to go small. That is an economic model that works, and notably, there are a lot of bloggers on that list who are using that model today. Blogging is alive and well, it’s just constrained, and thus worth paying for. The End of Social Media Google wasn’t the only Aggregator: a decade later there was a new means of discovery, which was social media. Now instead of searching for a site you could have a link shared directly to you, not just by email but on a site that served up interesting updates about whomever you chose to follow. And, for a period of time, followers could become friends. Stratechery’s fortunate timing was not just in terms of subscriptions becoming technically viable, but also the fact that Twitter was a community, not unlike the early Internet: genuinely interesting conversations happened in public, and you could reply-guy your way to broader distribution. Social media was also free, however, and even easier to get started than a blog ever was; that meant that the amount of content was greater by many orders of magnitude. This meant that algorithms started to matter — Facebook had one relatively early, but it took Twitter much longer — and also anyone with any sort of prominence had to start taking a much more defensive approach. Community, sadly, doesn’t scale; any platform that is available to everyone starts out special and spirals from there. Ultimately, public social media sites became personal entertainment sites, tuned for engagement, culminating in TikTok, a social media site with basically zero social component. However, that doesn’t mean social networking went away: in fact, I think that social networking is stronger than ever; the difference is that it isn’t public, but is rather in group chats. Group chats are familiar, they are high trust, they are, in many respects, the best of the Internet: even as technology atomizes us the group chat is the only place you can connect with people you care about, anytime and anywhere. In other words, the redemption of social media was — just like blogging — to become smaller. The scaling that mattered for most people was not an ever larger audience, but a proliferation of infinite finite groups. Social media 1.0, even at its best, followed the 90-9-1 rule: one percent spoke, nine percent commented, and 90 percent lurked; the magic of group chats is not in giving everyone a voice, but a place where you feel safe to talk. The End of the Internet The PHP vulnerabilities were just two of a host of security issues last week alone; there were also: - Compromised intermediate CA private keys (although this was an example of sheer incompetence, not AI hacking) - Major new vulnerabilities in Node.js, GitLab, Java, and Cisco products - Breaches in LiteLLM’s supply chain and Railway developer platform This is, believe it or not, only a partial list, and I expect things to only get worse. All of software is built on an inherently creaky human-authored foundation; the human factor meant the primary gate in all of software development was “Did it work?”, not “Is it secure from every possible privilege escalation or race condition?” or the myriad of ways that software can act in ways not intended. The saving factor previously is that attackers were limited by human time and ingenuity as well; AI, however, has limitless time and the ability to substitute iteration for cleverness — and it’s getting pretty clever as well! It’s not a surprise that this wave of vulnerabilities is coming to light, and it’s going to get worse before it gets better — which I do, for the record, expect to happen; after all, the good guys have AI as well, and in the long run software will be better when it is (re)written by AI, and defended by agents continuously. At the same time, what this entails is that the public Internet, to an even greater extent than now, will be a battle zone at best (i.e. social media), and a wasteland at worst (everything else). Some of this is economic, as AI consumes everything — both content and attention — without giving any of the traffic back that Google did, but it is also technical: it was already a dodgy proposition to stand up your own site or app, which was the very promise of the Internet, given the hacking risks; in the age of AI it’s madness. It is sad. When I was a kid we called up BBS’s that were hosted in people’s homes; when I was in high school we downloaded music from public FTP addresses; when I was in college we set up our own websites. Anyone could set up a server, and that server was just as much a part of the Internet as any other server; that’s simply not viable any longer, even if you weren’t worried about making money. The Internet as we knew it is dead. There are, however, green shoots of possibility, and once again the answer is to go smaller. When anyone can make an app, the answer is not to try and make a quick buck in the App Store; in fact, the surge in slop will make the market worse for everyone. Rather, it’s to make something for yourself and a small group of trusted friends and colleagues. This is exactly what has happened at Stratechery: we have made a bunch of different apps, for everything from podcast production to task trackers to calendar management, none of which will ever be made available publicly. That doesn’t even include the apps made for oneself: I’ve created a bunch of different apps to manage my house and sports viewing: it turns out I had a lot of software-shaped holes in my life that suddenly I can fill without asking permission. Software has always been different from physical goods in that its zero marginal cost nature meant it could scale to far more people; at the same time, the sheer amount of up-front effort involved in creating it meant that the intended audience needed to be large enough to justify the investment. AI completely changes that: suddenly it’s possible to create software for one person, or one team; smaller target audiences aren’t just a necessity for security, they’re an entirely new and potentially much larger market for software creation at scale, by literally everyone. Or, to use the example above, the group chat era of software is here and it’s going to be so much better than what came before. Markets, Past and Future Venkatesh Rao wrote an absolute must-read essay over the weekend called Cognitive Mercantilism. In brief, Rao makes the case that mercantilism rested on an assumption that economics was about scarcity and control; what brought about capitalism was demand. When people were freed from the burden of subsistence farming they discovered wants and desires at a scale that pulled entire markets into existence. Rao suggests the same might happen when people are freed from “subsistence cognition”. Rao concludes: What gets missed is the possibility that we are witnessing the beginning of a transition as profound as the one from an overwhelmingly agricultural society to an industrial and commercial one. From a world where 80% of human brains are engaged in subsistence cognition to one in which 95% are engaged in satisfying previously unfulfillable cognitive demands. The most important consequence of the agricultural revolution was not that farming became more efficient. It was that most people were liberated from the necessity of farming, allowing entirely new kinds of economic and cultural life to emerge. Likewise, the most important consequence of the AI revolution may not be that intelligence production becomes more efficient. It may be that most minds, human and eventually artificial, are liberated from the necessity of producing intelligence merely to survive, and become free to discover what they actually want to do with it. The cognitive mercantilist sees a world threatened by an oversupply of intelligence and an impending surplus of useless minds. The AI Malthusian sees a world in which intelligence outruns the capacity of humanity to absorb it, leaving a growing population of economically redundant minds primed for revolutionary explosions. The cognitive capitalist sees the possibility of an almost limitless expansion of demand, and a world full of minds whose potential has barely begun to be explored. I do understand why people have difficulty imagining this future. Capitalism, particularly over the last half century, has increasingly given way to scale, as ever larger corporations mediate ever more economic transactions, and as the Internet has played an important role in making the market a global one. The England in which capitalism emerged, however, and especially the America in which it was perfected, was much different. Alexis de Tocqueville, in Democracy in America, famously wrote: The political associations which exist in the United States are only a single feature in the midst of the immense assemblage of associations in that country. Americans of all ages, all conditions, and all dispositions, constantly form associations. They have not only commercial and manufacturing companies, in which all take part, but associations of a thousand other kinds — religious, moral, serious, futile, extensive, or restricted, enormous or diminutive. The Americans make associations to give entertainments, to found establishments for education, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; and in this manner they found hospitals, prisons, and schools. If it be proposed to advance some truth, or to foster some feeling by the encouragement of a great example, they form a society. Wherever, at the head of some new undertaking, you see the government in France, or a man of rank in England, in the United States you will be sure to find an association. I met with several kinds of associations in America, of which I confess I had no previous notion; and I have often admired the extreme skill with which the inhabitants of the United States succeed in proposing a common object to the exertions of a great many men, and in getting them voluntarily to pursue it. I have since travelled over England, whence the Americans have taken some of their laws and many of their customs; and it seemed to me that the principle of association was by no means so constantly or so adroitly used in that country. The English often perform great things singly; whereas the Americans form associations for the smallest undertakings. It is evident that the former people consider association as a powerful means of action, but the latter seem to regard it as the only means they have of acting. My life is defined by the Internet: I witnessed and participated in its evolution, and maybe in some small way contributed to it; I certainly owe my livelihood and success to it. I bemoan its passing. And yet, in some ways, I am optimistic about what comes next. When it comes to economics, or social interaction, or now software, the only viable approach is to become smaller; smallness at scale, though, means there is not one global market, but infinite local ones. “Local” might mean geographic, or it might mean a private network; what many markets definitely means is many opportunities, because economies of scale matter less than the ability to meet new needs that only arise at the level of the association. This is where I come back to de Tocqueville: the Internet is an American invention, and has long been defined by American mores; the individuals who thrive on the Internet, no matter their nationality, come across as very American in their iconoclasm and cringe. Beyond the individual, however, there is the association, and amongst the association there is not a market, but infinite markets. Markets are just another word for needs and desires and the mechanisms of meeting and fulfilling them; the end of the Internet may mean the possibilities for creation are only just beginning. Presented by When I write about tech companies, I am often writing about businesses that depend on Stripe, because Stripe provides the foundation for Internet-native companies — including Stratechery. Consider Substack: building Stratechery was complicated and involved gluing together disparate pieces; Substack made it easy by delivering an integrated offering. One piece that was the same, however, was Stripe: Substack creators are also Stripe customers, as are creators on many other platforms. Zoom out and the pattern repeats. Fintechs can build entire business models around card programs without ever having to build the issuing and processing infrastructure underneath it. AI companies can charge for what customers actually use, which is particularly important when usage also drives costs, without having to build the systems to track and bill for it themselves. No business succeeds because of Stripe. Stripe doesn’t answer the hard questions about what to build or whether anyone will actually use it. But it does make more things practical to try.