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This is an archive article published on October 5, 2002

The evaporation of the e-spirit

Those who use the Yahoo mail would be familiar with the mysterious advertisement window that opens quietly on their screen whenever they use...

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Those who use the Yahoo mail would be familiar with the mysterious advertisement window that opens quietly on their screen whenever they use their mailbox. The window is completely unsolicited; the Yahoo users don’t even get to know when the window has opened. It is only when they log out that they notice the advertisement sitting on their desktops. Most users get rid of this unwanted window, which in advertising parlance is called a pop under ad; but some click to learn more about the advertisement. Each click means more traffic, and more revenue, to the website that has cleverly served the advertisement.

Millions of such advertisements are being served across the world. These sites are in for a shock. They may now have to pay royalty to Exit Exchange, the American company that developed the ad serving process in 2000 as an alternative to pop up ads. Reason: The US Patent and Trademark Office has notified that Exit Exchange’s patent application has been accepted and is up for public scrutiny. If no one is able to challenge it satisfactorily in the next 18 months the patent will be awarded to Exit Exchange.

What a turnaround. The internet companies have undergone a 180-degree reversal. Five years ago, in the heady days of dotcom boom, the internet pioneers and entrepreneurs developed processes and shared them across the globe to boost the growth of the net. The word free was the mantra then, not monetisation which is the mantra today.

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No one, of course, will quarrel with a mantra that helps companies make money in a legitimate manner. In purely business terms the act of Exit Exchange cannot be faulted. After all, they are the ones who developed an alternative process that made internet advertising more lucrative. The biggest advantage of pop under ads was that they were not intrusive as pop up ads, and did not slow down page downloads. This came as a great relief to internet users who were getting tired of unwanted ads popping up on their pages.

However, almost every internet pioneer and net user will quarrel with the patenting of a process that for two years was available free on the net. The process was not patented when it was developed. More than that the process was further improved and modified as different companies adopted it.

Imagine the fate of the net if processes like chat and e-mail were patented. There will always be one company or one individual who can claim that he was the first to develop the process, and now he wants to charge royalty for it. It is not that internet companies do not license or patent software developed by their programmers. There are hundreds of companies and hundreds of software products that are licensed, and which sites buy and use in their day-to-day operations. But this is the first time that a popular service that was available free, and which had been widely adopted, is being patented.

This is going to give a new spin to the development of the net. Individuals and companies will fight shy of sharing processes that add to the net’s popularity. A big casualty will be the arrival of new killer applications like chat and e-mail. These caught the fancy of the world not because of their utility alone but also because of the fact that they were free. It is unlikely that individuals would have opened multiple e-mail accounts if it was a paid service.

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We can therefore expect a slowing down of new ideas and processes on the net. There will be fewer visionaries fired with the spirit of innovation. Two years ago it was impossible to keep track of developments; new applications were pumped out at a blistering place. Today the innovative spirit faces the danger of getting buried under the economics of bottomlines.

Indeed, the rewriting of internet rules may benefit companies and individuals. It may also dilute the red marks on company balance sheets; but it will never revive the heady excitement of the free days when the sheer challenge of innovation drove the net forward.

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