Utility of Data and Openness of Code

December 24, 2007

Consider the following interesting assertion.

Data has this really weird quality. In economic terms data has an increasing marginal utility… Each incremental point of data adds value to the ones you all ready have.

Those are the words of Brad Burnham. I saw Brad’s post linked to by Fred Wilson, Brad’s partner at Union Square ventures. Brad’s post is mainly about Google; his perspective is that of a VC who would like to see Google’s dominance disrupted, preferably by USV-backed firms.

Matt Asay picked up on Brad’s point about marginal utility of data (MUD?), and tied it to his own thinking about abundance and free/open source software. Thinking about Google, MUD, open source, and abundance didn’t make me think that Google’s dominance is due to end any time soon.

Google takes some of the abundance of open source software and uses it to power web services that are mostly free to the user. These services benefit from, and add to, Google’s private abundance of data. Google cannot realistically be called upon to open up this abundance, since it is data from and about users. The implicit contract between Google and the user is: we’ll give you free web services, you give us your data, and we won’t do anything evil with it or to you.

So Google’s private abundance of data is part of its positive feedback loop. At first glance, that doesn’t bode well for Brad’s wish for his firms, or for Matt’s wishes for open stuff. But I do wish each of them well in 2008.

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