Can anyone compete with Google
Mining for gold
Mac Greer: Don, the book opens with a story of a Canadian gold mining company named Goldcorp. Now, as a way of explaining this concept of Wikinomics, tell us about the story of Goldcorp.
Don Tapscott: Well, it's a great story. It shows that the Web is moving beyond social networking to becoming the foundation of a new mode of production, basically. The company Goldcorp was run by a guy by the name of Rob McEwen. The reason I know this guy is he's my neighbor, and he found himself taking over a gold mining company, but his geologist couldn't tell him if they had any gold or where it was on their property. So he got quite frustrated, and he was ready to shut the whole thing down, and he happened to have attended a Young Presidents session where someone told him about the Linux operating system. He wondered, if my guys don't know, maybe somebody else knows. So in the gold mining industry, your most secret and proprietary data and information is your geological data, held in high security computer systems and safes. He did a radical thing. He published his data on the Web and held a contest called the Goldcorp Challenge -- $500,000 for anybody who can find gold on my property.
He got 77 submissions, picked the top three. They were extraordinary. They were using techniques that he had never heard of, not just geologists, but mathematicians and computer scientists and graphics people, and he was getting inorganic solutions to these inorganic problems, and for his $500K, he found $3.4 billion worth of gold. His market value went from about $100 million to $9 billion, and because he was the principal shareholder, I can tell you, he's a happy camper. I know because he just renovated his house, now that he's a billionaire.
The story, it's a powerful story because it really underlines a lot of the big changes that are underway right now and how you orchestrate capability to create value.
Competition for Google
Mac Greer: Don, I want to ask you about Google. There are a number of other players hoping to compete with Google. One of those players is the co-founder of Wikipedia, a guy named Jimmy Wales. He's developing a new search engine using more of a collaborative, Wikipedia-type approach, and he's received funding from companies like Amazon.com. Do you think an open-source type search engine can compete with Google?
Don Tapscott: Well, it's going to be interesting to find out. In general, many open models will compete well with traditional hierarchical models and it's basically if you can harness the genius of the millions as opposed to the employees of Google, you can quite possibly build something that's better.
Now having said that, there's an element of mass collaboration in Google itself, because when we're out there using Google and when we create websites, we're in a sense collaborating to create something that can be found through a search engine that uses the Google algorithm.
But I was interviewing [Linux founder] Linus Torvalds and I said to him, "If you can create an operating system this way, what else can you create?" And he says to me, "Well, I'm not very good at predicting the future," to which I chortled, "You just create the future, you don't predict it." But he says, "I used to think that no one would want to create an open-source database because databases are so boring." This is like The New Yorker view of the world, right? (Laughs)
But anyway, so he says, "Well, but it's really happening." He says, "I don't think there are any areas of applications, really, that I can think of, except for very small niche, specialized things where the open source model could not be applied." So if a search engine is made of software, boy, Google has got to pay attention, and even Google has got to embrace mass-collaboration or it can be bypassed quickly.
Amazon's open book
Mac Greer: And speaking of databases and new ways of going about doing things, in the book you also write about Amazon, and you explain how Amazon is changing the game by renting out access to their database. Explain what's going on at Amazon.
Don Tapscott: Well, it's one of these seven wonders of mass collaboration, and this one we call open platforms, where all the world is a stage and you get to be a player. My daughter's boyfriend's parents have a small framing and handicrafts store in Northern British Columbia called The Framing Post, and they're now using the Amazon platform to sell their goods and services.
Essentially, Amazon has opened up its whole infrastructure to the world. There's now close to a third of Amazon's revenue coming from this. So you can have a server for $70 a month, and all of a sudden it goes to a thousand servers in one hour, as in the case of Wikinomics.com. You do some national publicity, and all of sudden you get a huge hit. The cloud expands to fill the requirements.
Wikipedia
Mac Greer: And Don, one example of unleashing that power of human capital, and perhaps the best-known example of mass collaboration in the online world, is the online encyclopedia, Wikipedia. It's incredibly topical. It allows anyone to add to various entries on a minute-by-minute, day-by-day basis, and while Wikipedia has been praised for its collaborative model, it has also been criticized for some entries that were inaccurate. I am a Wikipedia user, but I still don't completely trust the information. Is user-generated content always going to struggle with credibility on some level?
Don Tapscott: Well, it seems to be good enough for The New York Times. It uses [Wikipedia] for fact checks.
Mac Greer: Is that true? Wow.
Don Tapscott: I heard that recently from someone.
Mac Greer: Well, there you go.
Don Tapscott: But I think that, sure, at any point in time when you have something like that, there's going to be an inaccuracy, and especially in its early days, will even be gross inaccuracies that persist and might even last for months. But I will tell you, that, in general, is declining. That study by Nature Magazine said that the number of errors in a typical scientific article in Wikipedia is about equal to Britannica.
So it does raise an interesting question. How can many tens of thousands create something as good as the Nobel Prize winners? Well, it turns out, there are Nobel Prize winners that write for Wikipedia, but that's not the whole story. This is like an organic organis, basically, that when there is some kind of a foreign body introduced into it, that this thing sort of swarms all over the body, kind of like an antibody, and corrects it. This is not always a pleasant thing.
Foolish bottom line
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Don Tapscott is the author of Wikinomics: How Mass Collaboration Changes Everything.
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Amazon is a Motley Fool Stock Advisor recommendation. Mac Greer does not own any of the stocks discussed. The Motley Fool has a disclosure policy.
