(Preview) The End of the Ad-Supported Internet, Imagining What Comes Next, A Human-AI Agent PSA

Discussing Ben's Article on the future of the agentic web, including the virtues of the ad-supported internet we've enjoyed for the last three decades, why that model is becoming less viable as the years pass, and the potential for new solutions as agentic web traffic proliferates in the years and decades to come. At the end: An epiphany surrounding AI workflows and chain of thought exchanges between employers and their employees.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Sharp?

  Hello and welcome to a free preview of Sharp Tech.

• 0:08Andrew Sharp?

  Hello and welcome back to another episode of Sharp Tech. I'm Andrew Sharp and on the other line, Ben Thompson. Ben, how you doing?

• 0:19Ben Thompson?

  Doing okay, Andrew. Licking my wounds. I feel like, just in general, I have to take L's left and right in these NBA playoffs, which are really whimpering to a close.

• 0:32Andrew Sharp?

  Yeah.

• 0:33Ben Thompson?

  Gonna have to bow at the altar of Sam Presti and the Oklahoma City Thunder. The nerds won. Look, you have, they have a good team. They have lots of graphics coming forward.

• 0:43Andrew Sharp?

  I feel like I'm partly responsible. Yeah, you were on Simmons' podcast, taking shots at the Thunder. You and I radicalized each other. We're sort of on the intellectual dark web for the NBA.

• 0:55Ben Thompson?

  The reality is, look, the current NBA, you should not go for it. That is the wrong thing to do.

• 1:02Andrew Sharp?

  I wanted it to be true. I wanted it to cost the Thunder, and alas, it will not cost the Thunder. But it's good to be back. We were away all week and we're going to be talking about the state of the web on this episode. You wrote last week about the end of the ad-supported human internet that we've come to know for the past 30 years, and it's an outcome that is probably obvious to most people in technology, but may not be fully internalized by the mainstream just yet. You synthesized a couple different trends that are happening at once. Before we get to the future, though, and how all this might evolve, I want to talk about the ad-supported human internet and talk about what's ending.

• 1:44Andrew Sharp?

  So can you tell me more about the origins of the model that's about to hit obsolescence?

• 1:51Ben Thompson?

  I think there's always been a real, I mean, this goes back to my longstanding general overall defense of advertising and things along those lines. Like, I think it's very easy to see all the crappy parts of advertising and to miss the fact that, just at a real fundamental level, there are products out there that need to reach you. Users and now they can, and I think that's a good thing. And, you know, it's interesting. I kind of put Strategery in that category, even though I've never advertised. But I got free advertising via social media. Like, like, just the fact that this company can exist, this publication can exist, this podcast can exist. Is thanks to the internet. And there's a bit where I'm not gonna sit here and pull up the ladder.

• 2:35Ben Thompson?

  On other entities that don't lend themselves to social media sharing like Strategery did. And yet, which I'm glad to exist, right? Like the, you know, the things that make money on Instagram ads or and, you know. Find people that wouldn't exist otherwise and create products. That wouldn't have a market when back in the day. And everyone, when you talk about margins and Facebook and all these bits and pieces. You forget that to make any sort of product in the past. You had to not just make the product. You had to get distribution for the product. You had to go to a department store or go to Sears or go to.

• 3:13Andrew Sharp?

  Lobby the grocery store.

• 3:14Ben Thompson?

  Right, like software is a great example. You had to like Circuit City and get like your thing on the shelf, right? Like, like the, I think it's really easy to. Forget about all the benefits, particularly all these little niche products that you have like. There's a, um. There's a product I'm a, I'm a fan of is the tiny, I was just thinking about this because I just acquired a third one. The Tiny Pilot KVM Switch. It's like this network attached thing where you can control. It connects directly to the internet. And a KVM is you get the input from a computer and you have keyboard and mouse, mouse input. And KVM switches have existed for a long time. There's actually cheaper ones than this. I like this because it's basically like a Raspberry Pi. It's totally standalone.

• 3:59Ben Thompson?

  It's a Linux distribution. It's, it's, it's open source. I put Tailscale on it, one of my all time favorite services, so I can access it from anywhere. And if I'm in a place different than a computer or need access to a network, I can. And that computer is down, I can still have access to it. Super niche use case, but that's the whole point. It's a super niche use case that has not just this product, but actually multiple products in this space that meets a need that I have that I can find out about. Is that going to go viral on social media? Not necessarily, but I can learn about these new products and buy them and acquire them. It's awesome.

• 4:33Andrew Sharp?

  It wouldn't have been in a Circuit City 30 years ago.

• 4:36Ben Thompson?

  Right, no way, no way. Like, I think this was originally like a Kickstarter. There's actually a new version like Jet KVM. I know one of my friends really likes. That needs a web service, so I actually like the more expensive, more hacky one that I have. But whatever.

• 4:48Andrew Sharp?

  Shocker.

• 4:49Ben Thompson?

  We're deep in nerd-dom here, right? But the...

• 4:52Andrew Sharp?

  Yeah, I don't even know what you're describing, but I love it.

• 4:55Ben Thompson?

  It's top of mind because I literally, a friend of mine has one. It doesn't want anymore, so I just bought it for him. I'm like, yeah, I could, I could use it. There's a gazillion things we have and it kind of ties into the trade stuff too, right? Like, oh, there was some, what did I get? Oh yeah, I was shipping some, or I was carrying some boxes back on a, on an airplane the other day. And I got the maximum size box that would fit in my luggage allocation. Hard to carry, right? Because it's like this big box. So I go down to the local, you know, they call them department stores here, but they're like these, these shops that just carry a massive array of junk, all sourced from China or whatever.

• 5:38Andrew Sharp?

  A junk store, sounds great.

• 5:40Ben Thompson?

  I get this strap that it has a little metal triangle in it. So it can naturally wrap all the way around a box, has like a plastic clasp, goes together. It cost me like three bucks. I'm like, you know what? China rules. Like someone randomly is making this...

• 5:58Andrew Sharp?

  This is awesome.

• 6:00Ben Thompson?

  This perfect strap that perfectly meets my needs, that, no, does that exist? Is that out there? Like, there's all this consumer surplus from on the internet. You know, all this is tied together, right? A lot of this quote unquote junk is advertised on like Instagram and you buy this or things like, wow, that's actually exactly what I needed. Never would have known about that or been aware of that, or Amazon carries it or whatever it might be. Like, and it's really easy to forget and not appreciate.

• 6:27Ben Thompson?

  How great that is and all of this just carries.

• 6:30Andrew Sharp?

  Internet makes all the junk you can possibly imagine more accessible than it ever has been.

• 6:36Ben Thompson?

  And I'll be honest, what is junk, like the web is junk, right? There's just like a gazillion websites of every sort of thing. Sure, techery is, you know, one person's treasure, another person's junk, just another website out there on the internet, right? Like, like, because it doesn't cost anything.

• 6:51Andrew Sharp?

  Just another bozo on the bus.

• 6:52Ben Thompson?

  That's right. That's right. And all this is, is amazing and fantastic and advertising is an essential component of that, right?

• 6:59Andrew Sharp?

  All of that is to say, this is a corrective to the people who are wringing their hands over what advertising hath wrought on the internet.

• 7:08Ben Thompson?

  That's right.

• 7:08Andrew Sharp?

  Over the last 25 years.

• 7:09Ben Thompson?

  There was this, this, this idea that was coined by, I, I linked it in this article, Ethan Zuckerman, the Atlantic in 2014. It's got picked up by a lot of people since then about the original sin of the, of the web was not having native payments. And again, there's very good reasons why that didn't exist. There wasn't the infrastructure for it, uh, even if the banks were eager to do it or the credit card companies. I can promise you, credit card payments don't, you need a certain business model for them to.

• 7:35Andrew Sharp?

  I don't even understand what the dream business model was.

• 7:39Ben Thompson?

  There wasn't one. It's just a way to complain about, no, just a way to complain about advertising. Like, like, and, and like, so I, I had another quote from Mark Andreessen where he talks about, because the guy who actually helped invent the web and one of the, the first consumer browsers, and he talks about this and they tried to do something and they talked to credit card companies.

• 7:56Andrew Sharp?

  Yeah, I can read his quote. I've got it in front of me right here. We tried very hard to build payments into the browser. It was not possible. We made a huge mistake. We tried to work with the banks. We tried to work with the credit card companies. It was sort of the classic kind of single point of failure bottleneck, or at least in this case, two points of failure. Visa and Mastercard essentially had a duopoly at the time. And so they were just literally, if they did not want you to be in the switch, they did not want you to be able to do transactions. You just simply weren't going to do it. But I don't understand, if Visa and Mastercard had played ball, is it like you pay two cents per website you visit?

• 8:34Ben Thompson?

  No, it doesn't even work with the, with the fee structure. Like this is part of the problem, the whole microtransactions thing. This interview that I quoted Marc Andreessen in was an interview about crypto. He's talking his book, right? Like the idea that this is something that can solve this problem. And that's fine and well. I think there's potentially a role here. I brought up crypto in this article. But looking backwards to the 90s, everyone's talking their book to an extent. Andreessen's talking about crypto. Ethan Zuckerman just wants to complain about advertising. So not only is it mistaken and unrealistic, it actually misses the fact that advertising has a lot of good things, but it's all tied into this concept of the human web. Websites were made for people.

• 9:20Ben Thompson?

  Advertising works on people. Like, like it's, it's a, it's all about human attention. It comes down to just from a economic perspective, we talk about all the time. You could only monetize what is scarce. What is scarce is attention, right? Even if you go to a subscription model, my whole framing of subscriptions is you're, you're paying for the ongoing production of work. My work is scarce, like my time is scarce and I'm asking people to, to pay for that, making a promise about future delivery, et cetera, et cetera. And there has to be something in the trend in that that is scarce. So this idea that we would have had this magically different world if payments had been built into the browser and been there from day one. Number one, it's unrealistic.

• 10:02Ben Thompson?

  And number two, I think it, it ignores, casually dismisses the massive consumer surplus that has been the free internet. And the reality, say like a newspaper or a publication, yes, you can criticize them for making an error and saying, oh, let's put all our stuff online. We can now reach the whole world. But there's a bit where they could have maybe approached it differently, but the structural forces were what they were, which is the internet made you compete. The problem, again, to sort of return to a theme we've been coming back to the last few weeks and months. Is you're now competing with everyone. What everyone's mad about when it comes to the internet is that your is the level of competition.

• 10:44Andrew Sharp?

  Perfect competition is ruinous.

• 10:47Ben Thompson?

  That's right.

• 10:47Andrew Sharp?

  That's a theme we've returned to several times over the past year or two. Yeah, so with newspapers, it's funny you mentioned newspapers because I think about advertising on the open web and the human internet. And it feels like this is the death knell for a model that has been on life support for the last 10 years.

• 11:09Ben Thompson?

  Oh, it's mostly it's mostly dead, right? I mean, the vast majority of newspaper websites are atrocious. There's 50 gazillion ads, basically unusable without an ad blocker by and large. We might have gotten this too. I used to be very self righteous about people using ad blockers. I'm like, if you don't want access to content, then.

• 11:24Andrew Sharp?

  I know. And then you came down from the mountaintop a couple of months ago and said, I don't I I use an ad blocker now. I've become what I despise.

• 11:32Ben Thompson?

  It's unusable, right? And like the the.

• 11:35Andrew Sharp?

  But that's what I mean. I think you look out at the internet right now and we are in the nadir.

• 11:40Ben Thompson?

  Right.

• 11:40Andrew Sharp?

  As far as advertising is concerned, like the advertising has never been less effective outside of Google and Facebook. And also, it doesn't seem to be supporting open websites anymore. All right, and that is the end of the free preview. If you'd like to hear more from Ben and I, there are links to subscribe in the show notes, or you can also go to sharp tech.fm. Either option will get you access to a personalized feed that has all the shows we do every week, plus lots more great content from Stratechery and the Stratechery Plus bundle. Check it out, and if you've got feedback, please email us at email at sharp tech.fm.