Carl Malamud: Internet Talk Radio, flame of the Internet.
Malamud: This is Geek of the Week. We’re talking with Tim O’Reilly, who’s the publisher of O’Reilly & Associates. O’Reilly & Associates of course is one of our sponsors. This isn’t just a shameless plug for one of our sponsors. As you’ll see, Tim is actually interesting person to talk to. Welcome to Geek of the Week.
O’Reilly: Hi Carl. Thanks.
Malamud: Tim, you’re a publisher. You take lots of paper, and you produce it and you sell it. Granted, a lot of that paper is about the Internet and it’s about Unix and things like that. But is online publishing gonna destroy your paper business? Is this is a different world we’re getting into here? Is it gonna replace you?
O’Reilly: Well, I don’t know what’s going to happen to publishing as a whole. To me it’s…for our business it’s perfect. We’ve always been really an information company. We started out in technical documentation doing consulting. And one of the things you do as a documentation company is you plagiarize shamelessly. You know, you go in, somebody says “Oh, we need a manual in two months” and you go, “What do you got?” And you take whatever they’ve got and you build on it.
And really our publishing business really got launched in that same way. We found that we were— We did manuals, for example our X books, which were built on top of the free documentation from MIT. We added value. We went in there, we took some raw material, we improved it, we arranged, we added to it, we built on it. And turn it into something that we’re able to sell. So here was something that was essentially free, and we added value to it in such a way that people were willing to buy it. And for example, we license it to companies, who could have done the same things themselves. In fact some of them did and they said “Gee, it’s cheaper just to buy it from O’Reilly. Why should we bother?”
And the Internet publishing really fits so completely to us because there’s a big ocean of information out there. There’s so many free resources. But they’re generally poorly-organized, poorly-maintained, and often relatively inaccessible. So we see enormous opportunities in what is in a way a very traditional publishing activity, which is acting as a filter, as a selector, as an entity that brings focus in particular areas.
Malamud: Well but let’s say you’ve come up with the ultimate one-page description of what sendmail is. You’ve just added some value to the basic manual pages and things. How are you going to sell that? What happens— You know, you put one copy on the net and then everybody else copies it. How do you actually base a business on value-added on an Internet?
O’Reilly: Alright. Well, that’s a good question. And certainly you know, moving tangible goods is a very proven economic model. It’s something that everybody knows about, and in fact you know people, are very comfortable with the idea of oh yeah, I bought this book. And they think that they’re buying the hard product. They don’t realize that actually that book probably cost about two bucks to manufacture, even though it may sell for $25. The real cost is in two things: the development of the information, and the distribution.
Now, in the Internet, distribution is a lot easier but it still doesn’t go away. In fact in some ways it’s more difficult. People think about the fact that you could put up a server anywhere. But the fact is if you really want to get that information to a lot of people, you’ve gotta have a big pipe. So they’ve got to pay for the pipe. And so there are infrastructure issues that need to be developed. By the time you’re serving you know, tens of thousands of people you need a big communications pipe, you need a lot of computer equipment. So there are real costs and then the question is how do you recoup those costs.
With our online publications we’re really looking at a wide range of models. And we don’t know which one is really going to be the ticket in the end. Our first online publication, something called The Global Network Navigator, which is a World Wide Web-based information service, in some ways you can look at it as a competitor to America Online, with a big difference: we don’t own a lot of the information that we point to. It’s a layer. It’s oil on the water, so it floats on top of the Internet.
And you say well, gee. How do you get added value? We’re looking at three things. One is we’re trying to create areas of editorial focus that will attract advertisers, something that’s very analogous to a traditional print publishing. You know, online—not online… Printed magazines. You know, Communications Week, InfoWorld. Their advertisers support a publication. Somebody says “We’re going to create editorial content that will attract a certain class of readers, and therefore will get people to advertise because they want to reach those readers.” And really we’re looking at is an advertiser-supported business.
A very good example within the marketplace, which is one section in GNN, we created a travel section to promote a new line of travel books we’ve launched. And before long we had a lot of other travel publishers who want to put their information and were willing to pay us to basically put information up so that the people who come to this area on the net say “Oh yeah, this is the best resource for travel. We’ll come there.” And then they can go to the catalog.
People right now think oh, it’s easy you know. You just put up a Gopher catalog, or even put up a web server. But the fact is that once you Get past the novelty value and you have tens of thousands of servers on the net, nobody’s gonna notice but your own customers. And so there’s still a role for editorial content to draw advertisers. And what’s more, there’s a really much better model there than there is in the traditional print publication. Right now, you read a magazine and you circle reader service #69 and send off the Bingo card, and six weeks later comes back a packet and you scratch your head and say, “Why did I get that?” Or maybe it arrives, by then you bought a competing product. Now, with something like the Web with active hypertext links, you can collapse that entire process. There can be an advertisement, somebody can click on the ad to read it, they go “Gee, I want more information,” they retrieve the specifications, they go yeah this is really the product they want, they can click somewhere else, and send an order by email. You can collapse that entire process.
Malamud: Well with direct mailing, one of the things you ask is what percentage of the people you send these things out to actually bother circling the Bingo card, or looking at your seminar brochure. In an electronic world it’s much easier to skip over things. You don’t even have to physically turn the page, you can just not bother clicking on that ad. What makes you think that people are gonna actually want to go in and look at advertisements?
O’Reilly: Well, our evidence is that in fact they do. Part of it is there’s a big bias in a lot of people who think about the Internet where they “Oh, gee, commercial information. This is bad.” But it’s all information and people want it. Particularly if you’re interested in a particular subject, commercial information may be what you want more than the stuff that’s there for free. So, people do in fact visit the marketplace section of GNN more often than they visit the detailed magazine part that has the in-depth policy articles about the Internet, for example. Because they want commercial information.
And a lot of the problem is an editorial problem. And for us, for so long advertising has had only the ability to do quick hits. So to try to shake somebody by the lapels and get their attention. And it’s become bastardized. In fact if you think about it, the job of an advertiser to get information that people want out to those people, it’s actually very very interesting. We have a catalog that we’ve put out in print. We call ora.com that’s basically a catalog of our books wrapped in a magazine. And people want that magazine. People have asked us if they can buy it. You know, we’ve made our advertising so attractive that people consider it worth paying for. And there’s a real editorial challenge there. So that’s one thread of how we’re trying to develop an economic model for online publishing. In other words, to have people who want to get their information out work with us to create valuable editorial content that will draw people to their product offerings.
Malamud: Now, the other model in the traditional world is you have advertising and you have subscription. Are you going to ask people to pay per bit of information, or per monthly access or something of that sort?
O’Reilly: Well, we’re looking at the idea of monthly subscription fees. This is mainly driven by another product we’re working on called Internet in a Box which is an attempt to make it very easy for people, particularly in the PC world, to get Internet access all in one. Not everybody wants to be a “net surfer,” as the phrase goes now. And GNN really provides a point-and-click interface to useful Internet information. At the same time our partner in this project, Spry, has put together a very easy way for people to get an Internet setup so that you can basically fill out a form, click, [crosstalk] and the whole thing will set up an account.
Malamud: Several vendors are working on a similar project.
O’Reilly: So we’re really looking to make a product there that we can sell that will make added value. That’s again another possible revenue stream. You actually associate that information with a tangible product that people are willing to buy.
But anyway, in connection with that we felt that it may be necessary for us to offer GNN as a priced product so that we can then bundled it in with the product, just sort of— In many ways it’s establishing the perception of value as it is the actual value you offer.
Malamud: You’re a businessman on the Internet. The Internet started out as an ARPA research project. It started out with a very…populous, non-commercial, research…flair. Is it good to have businessmen in this world? Are you going to be able to successfully fit into this culture of a non-commercial Internet? Or is a non-commercial Internet just a myth?
O’Reilly: Well there’s two separate issues there. One is I don’t think that the Internet has ever been non-commercial. It was just whose goals was it serving. You know, in the old days of the ARPANET, it was serving the goals of the people who were working with the government on the various projects. Those are very definitely commercial activities.
Now it’s sort of gone out, and by cross-fertilization with Usenet it’s sort of seen as the universal access medium. And in my opinion, that is its real strength, the fact that individuals can play, that businesses can play. And the fact is this is a profoundly democratic medium, and I think it’s great for everybody to be on it. And it really is a level playing field in a way that we have not seen in a long long time.
Now when you say I’m a businessman, I’m somebody who basically did the traditional “start in the garage” kind of thing. And in a way we doing that with our Internet businesses. We’re not coming in as a big business, we’re simply trying to develop a product that people will find valuable enough to pay for.
And I guess that gets onto one of my kicks. I’m really interested in finding a new model for business going forward through the 90 and into the next…next century, really. Business by so many people is seen as exploitative. And in fact, you know, there’s no reason why business idealism is not possible.
The real challenge of any business is in fact to produce things that people value enough to pay for them. And that’s fundamentally a humane activity, you know, if you’re really trying to serve people’s needs. Now, things get caught up in dynamics that’re beyond those original goals. But I find that a lot of people who work in the nonprofit sector are very…sloppy-minded, in a way, because they’re not subjected to that rigor of the marketplace. I started out without an inkling about business, but I really came to like it. Because it forces you to think through what you’re doing and to really serve someone. You know, if you can go get a grant to do some worthwhile activity, all you have to do is convince some administrator somewhere. But if you’re actually selling a product you’ve got to convince a lot of people. And you’ve got to really produce something that they want. And I think that’s a really good thing to be added to the Internet mix.
Now, I’d hate to see it all get controlled by a few players. And that to me is a very very different proposition.
Malamud: Now, you talk about a level playing field like we’ve never seen before. What does that mean, and what do we need to do to keep that level playing field in place?
O’Reilly: Well, the biggest part of it is simply…when you have a government people talking about the National Information Infrastructure or the national information superhighway, there really I think are two competing models. And one is the Internet, and the other is the cable broadcast television model; they talk about the 500 channels. Well, I don’t really— Even 500 channels is not terribly interesting, as long as it’s got one gatekeeper who sits there and says “Oh yeah, you want to put on a program? Sell it to me.” The Internet is a peer-to-peer medium. The fundamental nature of it is the same technology is used to be a customer as to be a provider. You know, to be sure running a server is different than running a client. But, it’s a bidirectional communications medium. And as long as that’s maintained as we go forward, that we have an infrastructure where the differences between provider and consumer are relatively small, we have an incredible opportunity for it to be a medium that empowers people instead of makes them passive vegetables.
Malamud: Well the connectivity to the home appears that it may be provided by the cable company; they may give you telephone, or television, or other services. It might be provided by the telephone company; perhaps ISDN, perhaps fiber. It might be some weird thing like an electrical company. But in any case, how do you ensure that everyone can talk to everyone in that environment? Are there laws we need to pass? Do we need the equivalent of anti-trust laws for the Information Age that says “You must have an open interface for the set-top box, or you must allow people to provide service.”
O’Reilly: That’s a tough one. I’m not a good person ask questions about laws, because so often laws produce the opposite effect from what they intend. I think I’d rather see it simply be that the technological solutions that we adopt are open solutions. Whether or not… I don’t think the dan— I think the industry will produce open solutions, in the absence of laws. I think the greater danger is that somebody will…in an ill-advised attempt to get this thing launched, will back a technology which is fundamentally a closed technology instead of an open one.
Malamud: Is there a role, then, for the government to be playing? Should they be worrying about government information online? I mean, are there things that our policymakers in Washington should be focusing on?
O’Reilly: Well, one of the things that I would love to see government focusing on is how to use the Internet as a communications tool. Most people who are new to the Internet, particularly in big companies or in government, don’t realize the full range of its capabilities. They think either of “Well we’ll put up an email address and we’ll be flooded with mail” or “We could put government data online,” but not realizing that there’s a continuum between those two, and that the Internet is uniquely suited to play along that continuum. For example when I was talking to some people at the House and they’re saying “What should we do?” I said don’t just open the floodgates for mail. What you want to do is start publishing on the Internet, putting out information about questions that you want feedback on. You know, putting out your policy papers, asking for feedback about particular things. Creating directed communication. Opening the channels in a way so that it’s guided.
Right now, the noise level on the Internet is pretty high and that scares away a lot of the people who are…I say in big companies or in government, and that’s what drives them towards that monolithic model where they like to keep it all under control. And in fact, what I think we’re trying to develop in my business are models for how do you create information spaces in which dialogue can happen, in which there is direction, there is focus, there is added value, and yet at the same time you keep that wonderful quality of the Internet where everybody can participate.
Malamud: So just putting “firstname.lastname@example.org” up as an email address is not really creating a very sophisticated information space because you’ve only got one avenue to communicate with the Vice President. It sounds like you’re saying that you need a more sophisticated approach to the Internet if you want to live on that world?
O’Reilly: Well, I guess I’m saying that in any conversation, there are two sides to it and you have to realize that there are two sides. When you simply say “Here’s my email address, send me mail” you certainly open the possibilities of getting random input. But heck, you get that with letters. And there’s nothing really added. The responsibility of people who are in positions of power or in positions of information high ground, if you like, is to create invitations for participation. In other words to release information that generates feedback, to start dialogues going. So for example, the kinds of things that I think that any Washington policymaker who wanted to be involved in the Internet would be to try to develop constituencies, people who are interested in the kind of issues that they’re interested in getting feedback on, and try to harness some of the energy and enthusiasm of those people. People do need direction. And really the activity— This kinda brings it back to publishing and my business. You know, there’s a shaping activity that people need to perform. Now, whether it’s somebody in business saying “I have a vision of something that people want and I’m going to try to build it for them,” that sort of direct human energy, in a way. And in a similar way, you know, one of the goals of government needs to be leadership. You know. They need to basically have a vision of going somewhere. They need to articulate. They need to bring people in to the discussion and get buy-in. And you get buy-in in a way by what you put out as much as by what you take in.
Malamud: Tim O’Reilly, you talk about building information spaces. You talk about that happening in government. You talk about GNN as an information space. Are we simply talking using Mosaic and the World Wide Web, or are we talking…a whole range of tools that could be brought in to build that space? Are we architects in trying to build these virtual rooms that people can talk in?
O’Reilly: Well I certainly think that the Web is the most interesting tool, at least from a publisher’s point of view, that’s currently available on the net. Because it does allow you to put together information spaces that map— Basically I think of the Web as a tool for taking a small information space and mapping it onto a much larger space with hyperlinks between the two. Good example, if you can imagine sort of a legal analysis document that sort of talks about the case law on a particular area. And that really becomes a user interface to a body of information. And really that’s one of things that I find most interesting about the Web, is that—
Maybe this is jumping a level, but I believe that we’re on the verge of a new kind of software, if you will. You might call it “informationware.” They used to give away software so they could sell hardware. And then for a long time they gave away information—the manuals, the whatever—that went along to sell the software. Information is the next frontier. Well, where’s the value in that information? What it really is is in creating spaces where relevant information is grouped, organized, framed, in a way that makes it more useful. And the Web I think is very well-suited for that task.
What people thought about the problem of online publishing, the biggest problem is that the damn book is such a successful medium. It’s very hard to think how to do it better. And people have traditionally looked at how to add value to the book. And the first thing they found was…um…well I’m not sure of the order but, multimedia. You can do wonderful things with multimedia. You can do wonderful things with having search interfaces. And the Web really provides a third thing. Or the Web style of hypertext technology. That is really this idea in which you create small, manageable information spaces that map into much larger spaces. And in fact, what you’re creating is a user interface to a very large body of data.
Good example, GNN includes an online version of the Whole Internet Catalog from Ed Kohl’s book. And we originally did that as a demo, and then we look at it and we said heck, this is a product. What it is is a point-and-click interface to the Internet. The Internet in this case is a very large information spaces, and what we’ve done is we’ve put together a small model that is relatively easy to navigate through. You can look through it, you can read it. And when you find something you want, you click on a button, and you go to the real thing. And there are a lot of information products that I see possible using that model. You know, where you have a large body of information and then you have a small information interface. And what’s exciting to me about this is that it’s a real opportunity for publishers, because that’s all they’ve ever done. They figure out who are the good authors, what’s the good information, how do you get to it. And so it becomes a classic publishing problem to put those kinds of things together.
Malamud: Are the publishers taking to this technology? Are they coming online?
O’Reilly: Uh…it’s slow, because most publishers are traditionally not very up-to-date with technology. You know, we spent a lot of time when we were first working with this technology trying to proselytize to publishers because we felt the more people who were using the same kinds of technology, the more we create an interesting marketplace. And…a lot of them, certainly we’re still fighting the battle of “No no, we want it to have fidelity to print.” And in fact that battle is still going on. Products like Adobe Acrobat, which basically guarantee to a publisher “We can make it look just like the printed book” are in fact— I think are gonna hold back the industry. I think that SGML the markup language which allows the appearance to change depending on the browser, the—you know, the way the thing is displayed, really makes much more sense for an online environment. And that’s where again that fits right in with the Web, which uses HTML as a markup language. HTML is a DTD for SGML, essentially.
Malamud: Are we going to see a new generation of publishers? Are you the next McGraw Hill, or are they gonna— Are you eating their lunch? [chuckles]
O’Reilly: Well, I wouldn’t say that. Some of these companies are so large that— I don’t know that— It’s very difficult to aspire—even if one thought it was possible—to want to become that big. But, I think we’re certainly being a model for a lot of those publishers. We know that in the publishing industry we’re very very well-known, a lot of people are studying very carefully what we’re doing, and they’re very very interested to hear from us.
And I think a lot of the companies are moving in that direction. Certainly there are ones who are mired in the past, but there are a lot of others who really see themselves in the information business. And often even own various online properties as well as print properties.
Malamud: So do they stomp on you when they come into business? Are you going to be able to survive?
O’Reilly: I don’t think so. I just… People ask those kinds of questions and they don’t seem that relevant to me. You know, we grew up in a very competitive market with our Unix books. There were players who were much bigger than we were, and the idea was well gee, how are you gonna compete? We just did— We did something that was a little different. We’d do something that was better. But it wasn’t head-to-head. It was typically in the spaces. You know, we looked and said what are they not doing? And in fact, as areas become more competitive my interest is to go somewhere else. Similarly, I just started this travel company. And in fact, despite the fact that it’s a very competitive marketplace with a lot of players, we’re off to a really good start because we found a different kind of product and in fact were able to develop cooperative relationships with some of the leading travel publishers to help promote our books. We’re doing trades with people like Lonely Planet where we’re helping them to get their stuff on the Internet in return for them promoting our books to the travel trade. Because there’s synergy everywhere. And so I think that the idea of being stomped on, or stomping, are…not at all where I like to focus. I think that there’s endless possibilities for coexistence and cooperation.
Malamud: And do you think it’s going to be easy for individuals to become publishers in the Internet? You know, we hear the AJ Liebling quote that “Freedom of the press belongs to those who own one?” Is everyone going to be a publisher, or is there still a specialized group of people that fill that role?
O’Reilly: Well I think there’s two issues there. One is people have to realize that publishing is not as simple as it looks. A lot of the services that are put up on the net are thrown together hastily. They’re not maintained. And yes, you can put something together but there’s a lot of work that goes into producing a quality product. So, yes the opportunity is there, but you have to work at it. You know, it doesn’t just come naturally that you can throw something up there. You have to build infrastructure to support it, to make it really worth having.
Malamud: So it’s not magic. You actually just gotta roll up your sleeves and do some work.
O’Reilly: That’s right.
Malamud: That’s a novel concept. Well there you have it. This has been Geek of the Week. We’ve been talking with Tim O’Reilly.
Malamud: You’ve been listening to Geek of the Week, a production of the Internet Multicasting Service. To purchase an audio cassette of this program, send mail to email@example.com. You may copy this file and change the encoding format, but may not resell the content or make a derivative work.
Support for Geek of the Week comes from Sun Microsystems. Sun, makers of open systems solutions for open minds. Support for Geek of the Week also comes from O’Reilly & Associates. O’Reilly & Associates, publishers of the Global Network Navigator. Send mail to firstname.lastname@example.org for more information. Additional support is provided by HarperCollins and Pearsall. Network connectivity for the Internet Multicasting Service is provided by UUNET Technologies, and MFS DataNet.
Geek of the Week is produced by Martin Lucas, and features Tungsten Macaque, our house band. This is Carl Malamud for the Internet Multicasting Service, flame of the Internet.