The arc of the Internet is misunderstood. From its early description as the Information Superhighway to its current utility for seemingly limitless search, most pundits have characterized – even lauded – the Internet as a transformative portal to information and data. This is true as far as it goes. But this is far from the true essence of the Internet.

The Internet is about connections, not information, and this has been the case from the start. Certainly, people use the Internet for news, information and entertainment, but even more they have flocked to the Internet to strengthen and forge connections with others. The content – news, information and entertainment – is not merely content; it is something people share that binds them together in tighter, more meaningful bonds. It’s the creation of these bonds that marketers need to better understand. To get there, let’s look back.

The precursor to the Internet was the now-famous ARPANET that was begun not as urban legend has it to geographically distribute data and control systems to survive a nuclear attack, but rather to link up widely distributed networks and computers so that they could be uniformly, and thus more easily, accessed. Hence, the neologism Internet, short for “internetwork.”

Better access to information was central to the thinking behind the early Internet, but more telling about what is central to the Internet are the ARPANET recollections of Robert W. Taylor, the so-called father of the Internet. It is worth quoting at length from an interview he did with reporter John Markoff for The New York Times in 1999. When asked what he ‘discovered’ using early versions of ARPANET, Taylor replied:

“The thing that really struck me about this evolution was how these three systems caused communities to get built. People who didn’t know one another previously would now find themselves using the same system. Because the systems allowed you to share files, you could find that so-and-so was interested in such-and-such and he had some data about it. You could contact him by e-mail and, lo and behold, you would have a whole new relationship.” [Emphasis added.]

ARPANET was set up around accessing data, but the emergent property of ARPANET was one of communities and relationships – connections, not information. Similarly, the Internet has improved information access, but the sharing of information and the engagement around it has utterly transformed the ability of people to connect. The true essence of the Internet is connections.

As the Internet evolved, data and information access grew in size but connections grew both in size and in character. One of the earliest creations on the public Internet was the WELL, or the Whole Earth ‘Lectronic Link created by Stewart Brand and Larry Brilliant in 1985. It was an online gathering place, the first virtual community where people could connect in a way that transcended the traditional boundaries and barriers of geography, culture, language, profession, gender and time. More information was accessible, but what emerged from this was a worldwide community of connections heretofore impossible to create, and only imaginable to a few pioneering visionaries.

The arc of the Internet has been connections – from early email and discussion boards to the WELL to newsgroups like Usenet to bulletin boards or BBS to discussion forums hosted by services like CompuServe and Prodigy to member communities like AOL to early instant messaging services like ICQ to online forums to dating sites to the online communities like Geocities and Tripod to early blogging sites like LiveJournal to MMORPGS like World of Warcraft to wiki sites like Wikipedia to virtual worlds like Second Life to product review sites to online petitions and social organizing to video chat and meeting services to the explosion of social networks we know today that revolve around anything and everything, including friends like Facebook and business colleagues like LinkedIn and video like YouTube and photos like Instagram and bookmarking like Digg and news like Reddit and real-time updates like Twitter and microblogging like Tumblr and lifestreaming like Justin.TV, and more. Just to cite a few highlights!

The point is simple – the Internet is all about connections, and thus the most valuable currency online is not the exchange of dollars at online retailers or the cataloging of data at search and archive sites. The real value of the Internet is in its social currency.

Given everything that has happened throughout the history of the Internet, it would seem simple to keep social currency front and center when making decisions about brands and businesses. But as a recent article at Gizmodo about Yahoo!’s purchase and subsequent mismanagement of Flickr makes clear, even companies in the very midst of this transformative online arc often lose sight of what the Internet is all about.

Instead of nurturing the community built by Flickr around sharing photos, Yahoo! just wanted the data created by that community. As a result, Flickr was rapidly leapfrogged by other services that introduced features and innovations to support and grow their communities. Yahoo! got the data and information in the Flickr database. But in only doing that, Yahoo! let others have the value because the value in anything online is in connections not information.

This is the classic mistake of “marketing myopia” that the late Harvard marketing guru Ted Levitt aptly illustrated in his classic, award-winning and now legendary 1960 article in Harvard Business Review in which he wrote that railroads lost their way by not understanding the true essence of the business the were in – not the business of railroads but of transportation. The same heads-up is pertinent today – the Internet is about connections not information. As Levitt noted, such myopic misunderstandings come from focusing on products rather than customers.

A smart focus on customers today is revealing for brand marketers. As discussed in a previous post, what people want most nowadays are stronger relationships with other people not closer, more revealing relationships with brands. People want people connections, and in a marketplace where relationships among people are the highest priority, the gold standard for brand marketers is the highest form of relationships. That, of course, is family, which means, in turn, that kinship is the principle that must animate brands today in order to engage consumers in a compelling and effective way.

The impact of the Internet on brands is more than virtual. It is the real necessity for brand marketers to move away from thinking that consumers want relationships with brands and to see with greater clarity that what consumers really want are relationships with other people. The decades-long trajectory of the Internet is the clearest manifestation of this, and the forte of the Internet has been its facilitation of the ability of people to forge more relationships and to strengthen the ones they have already.

Facilitating relationships is what brand marketers need to do as well. People will engage with a brand when it provides something they can share with kith and kin. Such social currency is what people want to spend these days, and only after that are people keen to spend dollars and cents.

The kinship economy is a new context for brands that have thrived in years past with little if any attention to the social dynamics connecting consumers with one another. Marketers worried only about the transactional dynamics connecting consumers with brands. It’s different today. Not because connections are something new, but because connections are now much easier and much more possible for people to put first. It is a world in which brand marketers must relearn the business they are in – no longer the business of brands but the business of kinship and social currency, or to put it in a word, connections.

Contributed to Branding Strategy Insider by: J. Walker Smith, Executive Chairman, The Futures Company

Sponsored by: The Brand Positioning Workshop