Facebook's Internet.org Plan: Flawed, Self-Serving, but Worth It

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"Today, the Internet isn't accessible for two-thirds of the world. Imagine a world where it connects us all." So reads the press release announcing Internet.org , a high-minded effort to provide the entire world with an Internet connection. It is being lead by Facebook ( FB ), in conjunction with major technology companies Ericsson ( ERIC ), MediaTek (TPE:2454), Nokia ( NOK ), Opera (OCTMKTS:OPESF), Qualcomm ( QCOM ), and Samsung (OTCMKTS:SSNLF).

The initiative aims to make Internet access more affordable through less expensive infrastructure and hardware, broader mobile networks, more efficient data handling, and new business models that will incentivize the construction of infrastructure and devices in some of the poorest areas of the world.

The idea is this: Internet access will allow for education and growth in struggling parts of the world. According to a 2011 McKinsey & Co. study, the Internet was responsible for 21% of GDP growth in developed countries between 2006-2011. That made the Internet a bigger contributor to GDP than either the agriculture or utility industries. Facebook and its collaborators want to apply that level of growth to the third world. They would also love to attract all those potential Facebook users.

This Sounds Familiar

As Eugene Arnosky, SEO specialist and blogger at the Livingston, New Jersey-based NetLZ Consulting told me, "This seems like the same thing Google ( GOOG ) is doing."

Google's Project Loon is a long term project with the goal of providing Internet access to rural, remote, and impoverished areas using high-altitude balloons (about 12 miles above the earth) to beam wireless Internet at 3G-like speeds down to devices below. The project began in June of this year when Google began a pilot experiment in New Zealand with 30 balloons. The experiment was successful, and for the next phase of Loon, Google plans to send 300 balloons into the skies over New Zealand, Australia, Chile, and Argentina.

Said Aronsky, "This is basically infrastructure. Google is building infrastructure to expand business." With its Google Fiber endeavor, Google has also been supplying high speed Internet to Kansas City, Kansas, and Kansas City, Missouri, since July of 2012. Fiber will soon be expanding to other cities and towns in Kansas and Missouri, and eventually to Austin, Texas, and Provo, Utah. Of Internet expansion efforts at both Google and Internet.org, Aronsky said, "I see it as a way to get more eyeballs that are loyal to you."

Moreover, Loon may just be a better plan than Internet.org, or so thinks Jared Carrizales, the CEO of the Dallas, Texas-based search engine optimization agency Heroic Search . "Loon looks to connect the world with Internet access, and is likely to set the standard for any related effort done by any other company. Given that Google has such an impact on global Web traffic, it stands to reason that they would be the most likely to accomplish a feat like connecting the world." On Monday, a 5-minute Google outage caused global Web traffic to plummet 40% .

The Problems With Internet.org

A number of tech and Web experts we spoke to about Internet.org expressed concern that the project was too ambitious and not likely to succeed. Ian Aronovich, the Co-Founder and CEO of GovernmentAuctions.org , told us, "The goal for Internet.org is a solid one, and definitely one to root for. However, it's not realistic and will not likely be accomplished anytime soon. First of all, to provide Internet access to everyone in the entire world will involve an unfathomable amount of resources."

The plan also raises ethical questions, says Aronovich. "There will undoubtedly be countless critics who will argue that the deprived should be able to have guaranteed food, water, and shelter long before they're guaranteed Internet access, which is not essential for survival and well-being."

Another problem with the plan? All of the Internet.org companies are publicly traded, and as Jared Carrizales told us, these companies "will always be under tremendous financial pressure from investors…I think the pressure to find a way to make money with this project will be a very steep uphill battle that investors will get tired of hearing about."

The Internet.org leaders are also going to run up against political boundaries, trouble with state-run telecom monopolies, and censorship. In Mexico, for example, billionaire Carlos Slim's America Movil (AMX) (AMOV), and its subsidiary Telmex (FRA:TMX), operate as a quasi-monopoly, as there are only a few other competitors for the space in Mexico. "We face some of the highest prices in cell phones and plans [since] there isn't any competition," says Samantha de la Fuente, co-owner of the Mexico City-based Web development company Ixi studio . "In countries where telecommunications are monopolized, if their [telecom company] business stands to lose, or isn't at an advantage, they will sway politicians against initiatives [like Loon and Internet.org]."

Internet as Life Line

"There's tech for good, and there's tech for tech's sake, and there's trying to get money from everyone on the planet -- this, to me, is the last option," Jamie Diamond, a PR specialist, and owner of the Miami, Florida-based DiamondPR.net , told us. He believes that Google, Facebook, and the other Internet.org partners are simply out to increase their already-growing revenue streams.

But some people, like Nikki Junker, believe that the means, no matter how capitalistic the motive, will justify the ends.

Junker is the Media Manager of the Identity Theft Resource Center , and founder of With More Than Purpose, a non-profit in San Diego, California, that works toward combating human trafficking.

She described to me a recent meeting she had with delegates from 10 African countries via the US State Department-sponsored International Visitors Leadership Program. She was teaching the group how to create and distribute YouTube videos that could educate people about gender-based violence. "One of the [delegates] was a plastic surgeon; he worked with victims of domestic violence, as well as Fistula victims," she said. "At first he seemed so angry with me, and I didn't really understand why. He just kept saying this won't work, this won't work, this won't work for me. How am I supposed to get this to the villages?"

Junker told the man, "We'll figure it out. I don't care if I have to go out there and lay lines myself." Google and Internet.org aim to make it so that she doesn't have to; Junker believes that whether or not the major tech companies will profit from it, bringing Internet to people like the plastic surgeon and his patients will be a good thing.

Additionally, the Internet will be able to open communication between neighboring villages. During a time of drought, villages could communicate with one another and perhaps offer help or resources. As Junker said, "You're not alone anymore when you have the Internet."

Whether Project Loon and Internet.org are strictly capitalistic projects aimed at boosting revenue or an honest push for the sake of equality for all people, it's hard to disagree with Junker: "Many of the world's ills are from lack of education and economic opportunity. The Internet provides both."

Follow me on Twitter: @JoshWolonick and @Minyanville



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks , Technology

Referenced Stocks: ERIC , FB , GOOG , NOK , QCOM

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