On the one hand, we see a mess:  we see 6.5+ billion people most of which know nothing about managing their health, we see the wasted billions people spend on their health every year (or is it trillions), we see charities spending billions (e.g. Gates Foundation) to improve health, we see the battle between scientifically proven medicine and the persistant superstitions, we see obesity and late night TV, the list goes on.  On the other hand, we see the Internet, free, increasingly robust, growing like a weed to every corner of the globe, fully capable of getting the right information to the right place.  So what gives?  Why is health information on the Internet still so bad 13+ years into this?

Has anyone been on WebMD recently?  Given it’s the #1 medical site (by Comscore, so take it with a grain of salt), I found the experience suprsingly lacking…lacking in depth, readability, clarity, humanity.  Not only does the site navigation and design feel so 1997, so does their unwillingness to give much information other than “consult your physician.”   I was hoping that Revolution Health was going to make a difference, and their interface does scream Web 2.0, but I don’t see them getting much traction, and I heard they are burning $6 million per month.  With deep pockets, strong vision, real passion and a bunch of very capable management, Revolution Health has probably bitten off more than they can chew. 

60% of all medical searches online start at Google, and they do seem to be making some small adjustments to their product that may pay off for users.  (See screen shot)

Right above their results for “common cold,” they let you narrow your search so you have a better chance of avoiding the Spam Sites that are trying to swamp their SEO results.   If they do that, people will certainly get marginally more educated.  But Google, from what they say, are not focused on education as much as they are focused on patient records.  It’s certainly a huge mess deserving of attention, and if they solve it, it would make a big difference.   (That’s also probably a wise strategy for them — letting other companies come up with the great health information sites they can spider and put ads next to.)

So we are still left with the sense that getting good health information to people in a way they can absorb it and use it could have a big benefit to the world.  Could be world changing.  The fact it hasn’t happened could be a result of 1) intractability of the problem, 2) entrenched interests don’t want it to happen, 3) good laws and processes we’ve put in place to stop health fraud are now also stopping us from sharing truly useful health information.  I’m interested to find out which one it is.

The tech industry cycles very predictably, and somehow it always feels as if it’s for the first time.  Very refreshing in a way.  Eating lunch at the picnic table in the office, we were talking about what would be some signs that the tech boom is getting into the 3rd quarter…

1) high number of new G.P.’s being hired at VC firms, just in time for their investments to crater in 3 years.
2) more people with British accents around Silicon Valley
3) increasingly attractive people, both men and women, around Silicon Valley
4) VC’s you’ve never heard of, backing companies you think, eh? What the hell is that?
5) new HBS grads joining startups
6) guys in their late 20’s breaking up with their girlfriends rather than getting married and getting distracted from work
7) married couples delaying having babies so they can focus on work
8) pretty large and pretty swanky company parties
9) oversized marketing departments
10) PR companies growing
11)  decoupling of earnings from valuations (e.g. Aqantive, You Tube)

Another thought we had was that if a viable business model emerges for YouTube, justifying the acquisition cost and calming the IP lawsuits, the boom might extend because the markets might assume it means that the ad dollars from TV will continue to migrate online, and perhaps subsequently, the online companies could inherit the viewership from the TV companies, NBC, ABC, etc.  If a good business model cannot be found for YouTube… then maybe the party in our little corner of the IT world will end more or less on schedule in 18-24 months.

Simplifying greatly, we might say the first wave of the Internet was search.  The one we’re in the middle of now is social networking (it comes in many forms: myspace, orkut, msn spaces, facebook, secondlife, yelp).  To me right now, Facebook looks like the clear winner of this phase.  First, every metric of their traffic and usage is formidable.  Second, they are truly excellent with their product.  I haven’t seen them make a significant product or strategic mistake in the last 2 years, as they have been inexorably migrating from their college market to a much broader market appeal. (some say they should stick to their college knitting, but I personally think their aims for world domination are a much better path.)  I think Yahoo made a big mistake not to offer Facebook whatever they wanted last summer. 

Their growth since Sept 06 shows they jumped to the mainstream, and there’s no looking back now.  Facebook has an open field.  They are the only social network that got big while keeping their interface clean, and the name/brand is universally appealing.  Their product reflects the understanding that they need to be a utility, just like Microsoft and Google, (I mean, look at Facebook’s new design and UI, including  their crappy little Microsoft icons and Microsoft pull down menus.  They’re emulating MS whether they know it consciously or not).  Once they get the interface which gets their people to search from Facebook instead of going to Google, they’ll be able to cut a deal with Google and capture the bulk of the value, say 80% of the revenue.

So what’s interesting about this social networking wave is that like the operating system wave of the 1980’s, there is an inherent, real network effect to the business.  That’s not true of Google.  They have a network effect in the number of advertisers bidding on their keywords, which makes them more profitable per query than #2 Yahoo, but that effect doesn’t translate into greater defensibility due to a fundamental network effect for Google users.  What Google has is a brand effect.  Very powerful, indeed.  But not a true “I get more out of using them because everyone else is using them.”  Facebook could achieve that true network effect in the next 24 months.

Further, like Microsoft was able to get into applications in the 1980’s with Word, Excel, PowerPoint, Outlook, Exchange, etc.,  Facebook can add a large number of social apps on top of their platform.  Classifieds, Music, search, digital goods, virtual worlds, currencies.  As Michael Birch of Bebo said a few months ago, “I think the next big thing is still social networking because it can morph into whatever is next.”  Very true.  And Facebook can do just that, just as Microsoft did.

If I were Yahoo, I would want to buy Facebook to stay relevant.  If I were Microsoft, I’d want to buy them so I can stay relevant and have another shot at the network effect operating system business.  If I were Google, I’d want to buy them for both those reasons, and also because I’d want to keep Microsoft from getting back in the ring.  But if I’m Facebook I’d want to stay independent, so I could build the next empire and maybe bring new ideas to how to make a difference in the world through technology.  Here’s hoping they stay independent.