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The Internet: Unleashed

In theory, the wireless Web shouldn’t be too hard to build. Start with the content that already exists on the Web, link it to a WAP (wireless application protocol) phone and faster than you can say “end-to-end solution,” you’re in business. Right?

“Not even close,” says Brad Silverberg, the executive who led Microsoft’s Windows business for five years. Now the CEO of Ignition, an investment company that invests in wireless startups, Silverberg says players in the wireless Web space have to learn a whole new set of rules. “It’s a lot more than browsing Internet content on a small screen with a crummy keyboard.”

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Silverberg expressed his viewpoints at Seattle’s recent Internet Untethered Symposium sponsored by the alumni groups of the Harvard Business School and The New York Times Advertising Department.

Seatle24x7: Some people think that the wireless Web is, in essence, the sum of wireless technology and the wired Web that we use every day. Do you agree with that?

Silverberg: No. One of the key lessons we’ve learned is that the wireless Internet is not just the sum of wireless and Internet. There are two basic, independent differences.

First, the business is very different. In the Internet space, if you want to publish a Website and build a business, you send your $35 off to Network Solutions and buy your domain name, you buy a copy of Front Page or whatever, and you’re in business. There are no barriers whatsoever to distribution.

The wireless Internet space is dramatically different. The role of the wireless carriers is as different as can be from the role of the ISPs in the Internet. The carriers have invested billions of dollars in building out the wireless networks that they have, and they understandably want a return on that investment. You’ve got carriers, device manufacturers, network infrastructure players/providers, other software enablers, content providers, and how they all relate to each other is very fascinating and very different. There is some natural competition, but there is also a common interest toward working together to help make the wireless Internet dream come true. All of these companies, from Nokia and Sprint to Yahoo! and AOL , want to play active roles in improving the user experience. The relationship between these various centers of gravity is very different than in the Internet or the PC space, where the number of companies driving it forward is much smaller and those relationships are pretty stable.

The other difference is user needs. A lot of people have approached wireless Internet from the Internet point of view in thinking it’s about browsing the Web on a cell phone. It’s definitely worthwhile to be able to see news, weather, and sports and the kinds of things that you see today, but I don’t think that’s really going to be the breakthrough. I think it’s about new, unique products and services that are tailored to the specific needs of the smaller form factor of personal mobile devices. As important as it is for information on the Internet to be filtered, personalized, and intelligent, it is dramatically more so on wireless devices. I think you’re going to view these things as your future wallet and conduct all your financial transactions on them. You’re going to buy food at your local restaurants, newspapers at the newsstand, or withdraw cash from your ATM
machine. You’re going to use your phone as really as an extension of who you are. That’s very different from carrying around a PC.

Seatle24x7: Is the cell phone going to become more PDA-like, or will PDAs become more cell phone-like, or is there a third way or a coexistence here?

Silverberg: I don’t think anyone has the right answer to that question yet. You’ll see a tremendous amount of experimentation, some form factors to find out what people really like; whether they want ultra small or more powerful bigger ones that are multifunctional. Bluetooth, for instance, opens up a lot of potential for experimentation, so you don’t have to build massive, all-in-one devices. You can build devices that do a smaller number of functions, and do them particularly well, but they can work together in conjunction to provide additional benefits. So you may carry around a PDA-type device as well as a very small form factor cell phone. You may use your cell phone primarily for voice-type communication, but in conjunction with your PDA via Bluetooth, it can be a very high powered, visual radio.

Seatle24x7: Are there lessons to be learned from other wireless efforts in other parts of the world?

Silverberg: There are a couple of lessons to take from DoCoMo’s i-Mode, which is growing like crazy. They did a couple of very important things right. One is having a tremendous focus on the customer. They made a great customer experience–it’s fun. The phones themselves are very well designed and attractive consumer electronics. They’ve provided some great content in useful applications. DoCoMo priced it well. The other aspect is they made it very developer friendly. They used standard Internet protocol, so it was very easy to develop for. I-Mode represents an amazing relationship between applications and platforms; that if you prime the pump and create compelling end-user applications, and then you build a great developer platform underneath it, you can really get that kind of explosive growth.

Also, look at some of the applications we’re seeing from Scandinavia in the way that people really are using their cell phone as their electronic wallet–paying for parking in Finland or buying movie tickets or sodas from a Coke machine. They’re ahead of the curve in Scandinavia in terms of security issues as well. They’re solving problems that people in other parts of the world don’t even realize exist. If you really want to see where the future of wireless Internet is going, you go to Scandinavia and Japan and you’ll learn a lot. Once you find these things become extensions of your life, you don’t want to leave home without them.

Seattle24x7: Is there a technology, or maybe a lack of technology, that’s holding back wireless development right now? Likewise, is there a currently nascent technology that will be a real enabler?

Silverberg: I don’t think there is just one magic bullet. I think it is a collection of things all done right, like DoCoMo did. They did a lot of little things right, and when you do that, you can get that network effect, that geometric growth as a result. I think it’s
going to take packetized networks. One of the secrets to why the user experience for i-Mode is so good is because it’s packetized, so the interactive response time is very quick, even though the network speed itself is only 9.6 Kb. That’s not very fast, but because it’s packetized and always on and there is an instant response, the user experience is very good. Even if you have a faster network, it’s still connection-oriented or circuit-based, it’s very slow; the interaction time is very slow. So I think getting to packet-based network is going to be one of the keys to having great end-user experience. That’s not a guarantee–it’s just going to eliminate a huge barrier that exists today. And you’re going to have to do other things to improve phones–better user interfaces, better applications that really take advantage of the new characteristics of a mobile, wireless Internet, low barriers for developers, and a marketplace for them to get billing and payment. All those things need to come together, and when they do, then magic can happen like we’ve seen in Japan.

Seattle24x7: How long will it take for the wireless Internet to become as integrated into our lives as the wired Internet is today?

Silverberg: With the Internet, I was at SRI in 1977 — they were one of the first ARPANET sites. That was a long time ago. So the overnight success of the Internet has taken more than 20 years. I don’t think the wireless Internet will take that much time, but I think it’s fair to say that these things are easy to predict but very hard to time. It sure seems plausible to me to say five years out. And we will then take it for granted, just like we take the PCs and Internet for granted today, we’ll take it for granted and wonder how we ever lived without it. Growth can take off like crazy. Just look at cell phones today.