Network Monetization

Stuart Borgman - 7 April 2010

My learned colleague Richard Brandon recently posted a blog to this site summarising his thoughts around the recent Barcelona Mobile World Congress. In his own amusing style he managed to tease out some of the key themes across the event, while recreating some of the local Spanish atmosphere which not only provided food for thought, but also left me reaching for a bottle of 1996 Faustino 1 Rioja my weekend guests had kindly left behind.

What stood out in Richard's blog was the inclusion of term "Network Monetization", which is indeed a continuing theme in the industry for both vendors and services providers alike. I have heard and even used the term many times over the recent months and years; however it did make me wonder if it is a real word? Would I find it in the Oxford Dictionary? I picked up my mini Oxford Dictionary dated 1991 and did a quick search without luck; Monetarist, monetarism, monetary; but no monetization. I then checked the web and without surprise found a dedicated Wikipedia page:

Monetization - the process of converting or establishing something into legal tender.

The fact I found it on Wikipedia was not completely lost on me. Its relevance to the industry seems to have started around the post millennium "dotcom crash" when the Internet and the Worldwide web went through its greatest challenge. Looking back, the impact on the Internet and its ecosystem was minor; I'm sure there are a few individuals who are still nursing a damaged bank balance. While others retired to enjoy their yacht, but the Internet continues to grow as if the Dotcom crash never happened. It could be viewed that the crash became the point when the Worldwide Web and Internet business models truly decoupled. The "Internet" and "Worldwide Web" are two terms often loosely interchanged, but in my mind they help differentiate between the Web Content and Internet network infrastructure. Recent estimates from the research company 'Enders' estimated Google generated £470 million in revenue from UK advertisers in the last three months of 2009, which is staggering. At the same time the Internet Service Providers continue to punch it out with ever increasing promotions to reduce broadband costs and increase access speeds. To add to the competition the mobile operators have joined the battle with 3G mobile network dongles and their content hungry iPhones for those truly addicted.

What's clear is the content providers and Internet infrastructure providers are dependent upon each other. The good news is both make money, albeit with different revenue and profit models. But their interaction is no different to a manufacturer using a shipping and freight company for distribution, however for the shipping company to be successful it needs to scale with the manufacturers business. It may even offer value added options such as guarantees and tracking.

So what is my point? Well I'm not sure Internet networks, whether fixed or mobile, can become legal tender if that's the definition of monetization, however I do believe it has its own business model which needs to adapt and grow with its customers. Getting the economics right for this growth is critical, but the ability to scale the network infrastructure and offer value add services such as delivery guarantees, reliability, prioritisation and measurement is possible and the technology available today, it's "how" that is sometimes the problem... .

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