Closed is the new open

November 25, 2007: 12:12 PM ET

By Josh Quittner

One of the rallying cries of the Web 2.0 movement, during its sensational rise over the past five years, is openness. Open systems (Linux, Wikipedia, any phone you can hack from T-Mobile) are good. Closed systems (Windows, The Wall Street Journal Online, any locked-down cell phone you buy from Verizon) are bad.

The basic idea is that the Web itself, that Shiva of the business world, is built on HTML and Javascript -- code that's as open and free from any one company's control as, say, the United Nations. Smart companies are Zen-like: They give away the store and yet manage to make fortunes. Google, (GOOG) which opens up everything from its data streams (Google Maps, for instance) to the bidding process for advertising keywords is the typical example. Google is Web 2.0 and Yahoo, which has had a tortured time trying to accommodate itself to the new social web, is considered very Web 1.0 -- and on the ropes because of it.

Amazon.com has always embraced openness. Launched in 1994, it's a classic Web 1.0 company by definition. And yet it's also at the forefront of the social web. It allowed its customers to write reviews of products before anyone else, its enormous affiliate program lets everyone sell its products and it was among the first to make its APIs (application programming interfaces) available to developers.

So it was fun, therefore, to watch some of the smartest Web 2.0 thinkers make sense of Amazon's (AMZN) move to a closed, proprietary world last week with the launch of its e-book reader, Kindle. This was a rollout that, on first blush anyway, made the Microsoft Zune look downright innovative in its openness. (At least you can play MP3s on the Zune. For free.)

What's going on here?

Here's my guess: Emboldened by Apple's (AAPL) success, some of the most innovative companies in the tech world are starting to shift back toward closed systems.

Apple, of course, is about as closed a company as we've ever seen. It is what makes the company great and what makes it a horror show. It's why people love and hate it. On the one hand, Apple products are typically so far beyond those of the competition, a visitor from another planet might think that the former is made by humans and the latter by monkeys. (A techie pal, upon picking up his new iPhone some months ago, waved it at me and gushed, "This is like something from the distant future.") On the other hand, virtually nothing about Apple is transparent and open, from it's ghastly press relations to the way it handles customer complaints. The recent incident with the tech pundit Robert Scoble is a great example. He downloaded an Apple update to OS 10.4 and couldn't restart his computer. I had exactly the same problem when I updated my laptop last week. So did many, many other people, judging from the thousands of views at the relevant area of Apple's own support site. Yet, talk to Apple support and they deny there's even a problem. It's about as open as North Korea.

And yet, its success speaks volumes. The stock is up over 100% during the past 52 weeks. The company maintains such tight control over the products it sells you that you aren't even allowed to use them in unauthorized ways. Remember the whole episode when some people tried to unlock their phones, Apple updated its software and bricked the rebel phones? Talk about closed systems...

Steve Jobs has become something of the alpha pack leader of the CEOs in Techland. While many people point to the similarities between Mark Zuckerberg and Bill Gates -- affluent suburbanites, both dropped out of Harvard to pursue their big-picture tech dreams -- its clear that Zuck's role model is Jobs. (Zuck uses a Mac, dresses in his own Jobsian uniform, and tends to make grandiose statements about launching movements whenever Facebook holds an event.) While Zuckerberg's most famous move was opening up Facebook to developers ("Today, we're starting a movement...") so far, he's resisting Google's call to create a truly open platform. Developers writing applications for Facebook must use its own proprietary language, called FBML. Google, and the rest of the OpenSocial alliance of competing social networks, use HTML and Javascript.

And really, why should he? Just because it's open?

Apple is successful because Apple is Jobs. And Jobs believes in an almost pathological control. That is, after all, how a visionary gets results.

Will that work for Amazon and Facebook?

In Amazon's case, if Kindle flames out, it's not a big deal. The project is an ambitious experiment, and as Tim O'Reilly points out, even if the device itself fails, Bezos could well have jump started an industry that Amazon, with its enormous collection of e-books, is perfectly positioned to dominate.

Facebook, though, is at a more critical juncture. If it stays closed and starts to stultify as a result, members could easily pack up their tents and move to the next big thing. But if it manages to fight off OpenSocial? Look for more closed systems.

Join the Conversation
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.