Mark Andreessen, who was there when the web was born, explained in a 2019 podcast why this sin was committed. 'But like one would think like it was the most obvious thing to do would be build in the browser like the ability to actually spend money, right? And so you'll basically notice like that didn't happen. And in a lot of ways it's like we don't even think it's unusual that that didn't happen because maybe that shouldn't have happened. And so I think the original sin was we couldn't actually build economics which is to say money to the core of the internet. And so therefore advertising became the primary business model. We tried very hard to build payments into the browser. It was not possible. Well, we made a huge mistake. We tried to work with the banks and we tried to work with the credit card companies. Basically, it was, you know, it was sort of the classic kind of single point of failure bottleneck or at least in this case two points of failure. Visa Mastercard essentially had a duopoly at the time and so they were just literally, you know, they just if they did not want you to be in the switch, they did not want you to be able to do transactions. You just simply weren't going to do it.'
I think Andreessen is too hard on himself. And I think Zuckerman is too harsh on the model. Andreessen created the conditions for the original web was the human web and advertising was and is one of the best possible ways to monetize the only scarce resource in digital, human attention. The incentives all align. Users get to access a vastly larger amount of content and services because they are free. Content makers get to reach the largest possible audience because access is free. Advertisers have the opportunity to find customers they would never have been able to reach otherwise. Yes, there are the downsides to advertising Zuckerman fretted about. But everything is a trade-off and the particular set of trade-offs that led to the advertising-centric web were on balance a win-win-win that generated an astronomical amount of economic value.
Moreover, I disagree with Andreessen that we could have ended up with a better system if the banks and credit card companies had been willing to play ball. In fact, over the last 30 years, the credit card companies in particular have in part thanks to companies like Stripe gotten their digital acts together and are integral to a huge amount of web-based commerce, which itself is driven through digital advertising. The largest category of advertising for both Google and Meta that too is human and that the biggest outcomes of digital advertising is physical products and real world experiences like travel. Digital products like apps and games, meanwhile, are themselves pursuing human attention.
What was not viable in the 1990s, nor at any time since then, was something like microtransactions for content. One obvious problem is that the fee structure of credit cards don't allow for very small transactions. Another problem is that the cost to produce content are front-loaded, and the potential payoff is both backloaded and unpredictable, making it impossible to make a living. The biggest problem of all, however, is that microtransactions are anti-human. Forcing a potential content consumer to continually decide on whether or not to pay for a piece of content is alienating, particularly when plenty of alternatives for their scarce attention exist.
Subscriptions do work at smaller scales because they are ultimately not about paying for content, but giving money to another human or human institution. From the local news business model, quote, 'It is very important to clearly define what a subscription means. First, it's not a donation. It is asking a customer to pay money for a product. What then is the product? It is not in fact any one article. A point that is missed by the misguided focus on microtransactions. Rather, a subscriber is paying for the regular delivery of well-defined value. Each of those words is meaningful. Paying. A subscription is an ongoing commitment to the production of content, not a one-off payment for one piece of content that catches the eye. Regular delivery. A subscriber does not need to depend on the random discovery of content. Said content can be delivered to the subscriber directly, whether that be email, a bookmark, or an app. Well-defined value. A subscriber needs to know what they are paying for, and it needs to be worth it.'
This last point is at the crux of why many ad-based newspapers will find it all but impossible to switch to a real subscription business model. When asking people to pay, quality matters far more than quantity, and the ratio matters. A publication with one valuable article a day about a well-defined topic will more easily earn subscriptions than one with three valuable articles and 20 worthless ones covering a variety of subjects. Yet, all too many local newspapers built for an ad-based business model that calls for daily content to wrap around ads spend their limited resources turning out daily filler even though those ads no longer exist. End quote. I expect that this model will endure in the age of AI. Obviously, I'm biased on this point, but in a world of infinite content on demand, common content becomes community. If I'm successful, this essay will generate a lot of discussion amongst a lot of people precisely because it is both original and widely accessible, funded by an audience that wants me to keep on writing articles exactly like this.
The death of the ad-supported web. The ad-supported web, particularly text-based sites, is going to fare considerably worse. In fact, the most substantive push back to my defense of advertising was in my own excerpt. Most ad-supported content is already terrible thanks to the bad incentives both Zuckerman and Andreessen bemoaned and the impossible economics enabled by zero marginal cost content generation and consumption. The center of this world for the last 20 years has been Google. Google in its most idealized form oriented content consumers by mastering discovery in this world of abundance directing users to exactly the site they were looking for which was monetized through ads that were sold and served by Google.
Indeed, this is the great irony in the ads antitrust case in which Google is currently embroiled. Eric Seufert asked on Mobile Dev Memo, 'I've heard arguments that because Google suppressed competition in open web advertising markets, those markets should flourish when Google's monopoly is broken. But my sense is that this ignores two realities. First, that consumer engagement has shifted into apps and walled gardens irreversibly. And second, that Google was keeping the open web on life support. And the open web's demise will be hastened when Google no longer has an incentive to support it. What happens to the open web when its biggest, albeit imperfect, benefactor loses the motivation to sustain it?'
Note two points. Walled gardens like social networks are both more attractive to most users and also better for advertisers. And Google might soon lose what little motivation they have left to support the open web. However, that's not Google's and the web's only problem. Why go through the hassle of typing a search term and choosing the best link, particularly as search results are polluted by an increasingly overwhelming amount of SEO spam, now augmented by generative AI, when ChatGPT or Google itself will simply give you the answer you are looking for. In short, every leg of the stool that supported the open web is at best wobbly. Users are less likely to go to ad-supported content-based websites, even as the long-tail of advertisers might soon lose their conduit to place ads on those websites, leaving said websites even less viable than they are today. And they're barely hanging on as it is.
Microsoft and the open agentic web. This reality is the fly in the ointment of an intriguing set of proposals that Microsoft put forward yesterday at the Build 2025 developer conference about the open agentic web. Here's CTO Kevin Scott.
