Author and brain scientist (of course he's a brain scientist!), Jeffrey Stibel writes in WIRED FOR THOUGHT How The Brain is Shaping the Future of the Internetthat business leaders must think of the Internet as a 'thinking machine' - the first real replication of the human brain OUTSIDE the human body.
In the book, Stibel writes how the Internet is evolving into a brain and those companies, networks and Web sites that are able to leverage this insight will own the future.
The book goes on to make some compelling predictions including thelooming dangers that threaten social networking sites like Facebook and Twitter .
I asked the author to write a guest blog for Bullish to share his theory.
Guest Blog: "The Brain Behind the Internet Outperforms the Stock Market" by Jeffrey Stibel, author of "WIRED FOR THOUGHT."
You’ve heard this argument more than once, I’ll bet: Internet stocks are a risky investment. Having served as President and CEO for more than one publicly-traded Internet company, I have heard the cynical rhetoric of those who skim financial headlines: “Sure, Internet stocks perform miracles during boom years, but they always seem to come crashing down during bad economic times.” As a scientist, I’m hardwired to seek out proof, so I decided to see if the “fair weather” investment reputation that Internet companies and their stocks have been tarred with since the dot com bubble can be substantiated.
It turns out that Internet stocks are now some of the best (dare we say safest?) investments around.
Take for instance, a comparison of the recent performances of both theDow Jones Internet Composite Index and the Standard & Poor’s 500 Index. The DJINET is up 57% year- to-date, compared to 16% for the S&P 500. On a rolling 12 month basis (Sept 08-Sept 09), the Internet Index is up 6% as compared to a loss of 16% for the S&P 500. Even across the past two years (Sept 07-Sept 09), Internet stocks outperformed the traditional indices: down only 11% versus 30%.
To be sure, different indices will have different results but this is not a “just noticeable difference”: Internet stocks are outperforming their mainstay stock counterparts by a large margin.
And the reason, while hard for most people believe, is simple: The Internet is a brain!
We have forged swords to extend the length and power of our arms; telescopes and cameras to extend the power of our eyes; artificial hearts to mimic the organic pumps that beat in our chests. But as outlined in my forthcoming book—Wired for Thought—with the Internet, we have created something unlike anything humankind has built before.
Sure, this may all seem like science fiction, but I assure you there is far more science than fiction to this analogy. The brain is one of the most complex networks in the world, with more neurons than there are stars in the galaxy. Its hardware is a complex network of neurons; its software a complex network of memories. The Internet is also a network. Its hardware is a complex network of computers; its software a complex network of websites. The brain has neurons and memories; the Internet has computers and websites.
(The Internet is pictured here below on the left, the brain is pictured here below on the right)