How social media brought big power to the smallest players

April 11, 2013: 12:13 PM ET

While new technology has given the once overlooked little guys more power, The End of Big author Nicco Mele cautions that it comes with unintended consequences.

WHITE BOOKFORTUNE -- Big is powerful, or so it's generally assumed. But in today's social media-centric world, small is big again, as everything from pint-sized companies to tiny political parties are quickly becoming just as powerful.

In The End of Big: How the Internet makes David the new Goliath, social media guru Nicco Mele offers a thought-provoking look at the ways new technologies, which comprise what he calls "radical connectivity," are shrinking, and therefore altering, who controls all aspects of everyday life -- from who governs us to who sells us goods and services to who delivers our news and educates our children.

As Mele acknowledges, the book goes wide rather than deep. He starts off describing the birth of the internet within the U.S. military, then chronicles its evolution from something used to communicate research at U.S. universities to what it has become today -- a technological force with the incredible ability to decentralize the powers of today's biggest institutions. It's an important read for anyone curious about what the future might look like. While new technology has given the once overlooked little guys more power, Mele cautions that it comes with unintended consequences. For instance, staying connected has given fringe political forces -- varying from the Tea Party to terrorist groups -- tremendous potential to enter the mainstream and undermine central power.

Mele is an expert in political campaigns -- he worked as the webmaster for Howard Dean's run for U.S. president in 2002 and later went on to work for Barack Obama's 2004 U.S. Senate campaign under his company, EchoDitto. He argues that new technology has disrupted America's two-party system, giving rise to a new kind of democracy that could either produce effective leaders or what he calls "scary candidates," such as Minnesota Congresswoman Michele Bachmann, Herman Cain, and Texas Gov. Rick Perry.

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Mele pays special attention to the Fourth Estate. The Internet has given virtually everyone the power to publish. Blogs have flourished, and once giant news organizations have quickly downsized as competition intensifies for web audiences. It used to be that journalists relied on key sources to break news. Now those sources have the ability to break news directly via Twitter and the like.

There is a danger in this, however. Just as blogs flourish in the 24/7 news cycle, big media companies are languishing. They're becoming smaller, with fewer resources to commit to the kind of investigative journalism that helps protect America's freedoms and democracy. On this point, it's worth noting that while Mele's argument echoes other experts, it goes against what many thought years ago. Before Twitter and Facebook (FB), it was widely thought media companies would get bigger and bigger. And as they merged, the delivery of news and information would come from fewer and fewer outlets. The issue was highlighted in Benjamin R. Barber's 1992 book, Jihad vs. McWorld: Terrorism's Challenge to Democracy, which noted that mergers within big media companies would greatly undermine the free flow of information critical to a healthy democracy.

As it turns out, media companies are getting smaller, not bigger. A few examples: Cox Enterprise's move in 2008 to sell off several of its newspapers throughout the chain, AOL's (AOL) spinoff from Time Warner (TWX) in 2009, Time Warner's planned spinoff of Fortune parent Time Inc., and so on. Interestingly enough, just as experts years ago thought big media would threaten democracy, Mele fears a similar outcome as news shrinks to, say, a 140-character tweet.

Where Mele's argument seems less convincing -- even a bit alarmist -- is when he highlights the end of big companies. Just as the end of big journalism and government could lead to a serious accountability gap, the same problem could arise with the end of big business: "In this respect, we might even return to the 19th century, when any quack could make bizarre advertising claims, and you had no way of knowing if you were getting medicine or baking soda."

It's true the Internet has disrupted some of America's biggest retailers. Take a look at big-box chains such as Barnes & Noble (BKS), which has closed hundreds of stores as it struggles to compete with the likes of Amazon (AMZN). What's more, companies like Etsy and Quirky have empowered entrepreneurs in the retail space.

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While small companies may be getting more competitive, Mele acknowledges not all big companies are getting smaller. In fact, the biggest ones have been sitting on record levels of cash for years.

What's more, Wall Street isn't getting smaller, either. Three years after President Obama vowed to eliminate the danger of financial institutions that are too big to fail, the nation's largest banks are bigger than they were prior to the financial meltdown. As critics argue, the scale of these institutions poses an enormous threat to the security of the global financial system.

Nonetheless, the end of big is hitting many aspects of our lives. And Mele makes us seriously think about the world we live in today and, more importantly, how we'd like to live in it tomorrow.

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About This Author
Nin-Hai Tseng
Nin-Hai Tseng
Writer, Fortune

Nin-Hai Tseng covers economics and finance. Before joining Fortune, Tseng was a reporter at The Orlando Sentinel and a public affairs associate at GE. She holds an MPA from Columbia University and a BS in Journalism from the University of Florida. She lives in New York City.

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