Author: Jing Conan Wang

Email: hbhzwj

Webpage: sites.google.com/site/wangjingpage

Abstract: This article describes the influence of Crowd Sourcing and Human Computation on the Labor Market. Crowd Sourcing and Human Computation help to break the large job which previously finished by employee into small tasks which will be distributed and accomplished by a crowd of people in a pleasant and rewarding method. As a result, it will increase the tail of labor market to a great extend and generate an extremely large commercial opportunity.

Long Tail dominates the Internet. Many interesting things happen when the entering threshold of a specific field approaches zero and thus generating a extremely long tail. For example, The success of Google Adwords and AdSenses owes to the long tail of Advertisement. The essence of long tail is to generate large profits from small needs.

Usually if you want to have a jobfinished. You need to hire an employee, sign contract with him, provide a working place, train him, describe the job to him and eventually pay money to him. It is very complicated. One benefit of such complexity is that employers are less willing to fire a person he hired because it will cause extra soaring cost of hiring new person. As an definite “employee”, I must thanks to the person who create this process as it protects me better than federal labor law.

Example of Cleaning your office

but at the same time, it also means that employers are less willing to hire person for small tasks. You may think your office is dirty, but except for the case that the office is dirty enough( the degree of “enough” depends on personality ), you would not like to hire a new cleaner. In this case, the threshold, namely the cost of cleaning the room by hiring a cleaner by yourself, is very large. The head of this market is those big companies which really have the needs to recruit cleaners by themselves.

Cleaning Company reduce the cost by maintains employee and employer relationships by themselves and you outsource your tasks to him. In this way, the cost of cleaning your office is reduced and the tail is thus extended.

What if a strange job? The tail of job

But that’s not enough. Cleaning room is a common task whose needs are large enough to support a company. What if you want find someone to “steal vegetables” for you in Happy Farm Game in 4AM everyday? I thinks less than 1 out of 10,000 people may have the similar need with you, and another 1 out of 10,000 people are willing to do that for a pay.

I don’t think there would be company to whom you can call to help you “steal vegetables” in 4AM every day. But in Internet Age, there is still way to meet your need, you can post the task in a website (these kind of website is not popular yet) and person who have interests can contact with you. Maybe a boy who lives 3 blocks away from your home may send you email saying that he is willing to do that for a 9 dollar hour-wage. The tail is extended for another time.

I just said “maybe”, personally I believe it is still highly possible that you get no response because few people can bear this work for more than a month. So why not break the tasks to smaller ones and hire person to “steal vegetables” for only one day? It will be much easier to find a person happens to be awake in 2 AM for a specific day(I often stay up in Friday so it is no bad to gain some bucks by clicking mouse for several times that day).

The general trend is that job is broken into many tiny parts which can be outsourced and finished by many people. In this way, the gap between demand and supply was greatly reduced. Here comes the questions, which kind of jobs can be broken, how to break these jobs, how to find people who are willing to do those and assign each part to them in a optimal way?

Unfortunately, the rule of “breaking” is not applicable for many jobs. For example, it is impossible for you to change your baby-sitter everyday, you don’t like that and your baby would not, too.

But there are still some applications. For example, wikipedia has proved that multi-person cooperation can generate high quality report. Yahoo Answer has proved that Internet can take place of consulting as least partially. Actually, most of the office work can finished by a crowd of people connected to Internet, so called “Crowd Sourcing”. That is to say, crowding sourcing and eliminate the job of most white collars.

People don’t need to sit in office building formally. Instead they only need to do what they want in Internet, like playing games, listening to music and so on. And they will finish other people’s tasks indirectly and get paid. THAT SOUNDS FANTASTIC!!

Why it is a revolution. How large the opportunity is?

The world of long tail is a world of monopoly, that is to say, the long tail of each specific field is always dominated by small number of companies. For example, Google dominates the long tail of Online Ad, Ebay dominates the long tail of E-commerce, so on and so forth

Although the total price of each task is tiny, the long tail can account for the 40% or more of the total value because of their massive number. Each year, hundreds of billions of money are invested into office-related jobs. That’s to say, the dominate company will have sales volumes of 40% of these hundreds of billions dollars, which amounts to at least 100,000,000,000$!! It would be a giant like Google and Apple.

When will it become a reality. What’s the problem make it impractical nowadays.

People do the things they like, and they get enough payment to support themselves. It seems to be utopia! However, this scenery is still impractical now, mainly because the technical limitation.
Both Crowd Sourcing and Human Computation is still in their early stage. Luis von ahn, the creator of human computation concept and the inventor and many games with purpose, also admitted that human computation game can only be used in a small range of field like image labelling, and he don’t know how to develop an general framework, either.
I think the development of human computation and crowd sourcing is closely related to Artificial Intelligence, Data Mining. Maybe it still takes another 5-10 years for this field to have significant breakthrough.

The history of IT Industry witness the emergence and the fall down of many famous companies, most of which are labeled with a certain kind of technology. The development of these companies are tightly associated to corresponding technology.

For example, prior to the Microsoft Age, software was rarely considered as profitable, let along become the center of whole IT Industry. It is Microsoft led by Bill Gates that open the gate to proprietary software age. Microsoft teaches people all round the world (may be except China) that software development should be well respected as the other essential part of PC in spite of Hardware.
In the mid 90s, few people realized the power of Internet. Yahoo was one of the first companies that really treated Internet as paramount new media which can totally change the method of information distribution. Since then online AD gradually become the mainstream ad distribution method. Cherry Yang’s efforts greatly damage the traditional media like TV and Newspaper and reshuffle the whole media industry.
Similarly, another Internet giant Google has totally changed people’s way to get information since its setup at 1998. With novel PageRank technology, Google shows web users organized information indexed by millions of key worlds instead of orderless web pages.
Now Microsoft, Yahoo and Google have become the synonym of Software, Online Ad and Search Engine. It is new technology that creates the prosperity of these IT Giants. However, this is not always the case, new technology doesn’t always means new successful company.
Take Netscape as example. The Netscape Navigator represented the advent of Internet Age with rich multimedia content. With this revolutionary product, Netscape became the favorite of the Wall Street and its market value surplus 5 billion dollars in a short time. This situation was totally changed when Microsoft entered the field of web browser. In short 3 years, Netscape suffered from sever defeat in the both web browser and intranet market. Under the giant financial pressure from the Wall street, Netscape finished its brilliant and short life and was sold to AOL.
Compared with the trategy of Netscape, the ending of youtube is more pleasant. The creators sold youtube to Google with a high price, at which time youtube was burning money and didn’t have clear profit model. The two creators gains 300 million dollars respectively. Many other companies have the similar happy ending, like hotmail, doubleclick.
All of these companies hold new technology that has total redefined a market, however some of them succeed at last and some other are sold. We must admit that creators’ characteristics play an important role in the process. But creators’ choice is not the only reason. the characteristic of the technology and market condition have pre-decided the destiny of each company.
To produce a new IT giant, a new technology must has the following characteristics:

1.  Foundational Application with huge market demand
Not all technology is enough to support a huge IT giant. OS, online AD and search engine all share a common point: it is a necessity and foundation of whole industry. Every PC needs Operating System and all other software must be build on API of operating system. Online AD is in the base of Internet Economy, no Internet Company without the support of Online AD. Search Engine is the portal of Internet and it directly determine other websites’ flow, which is essential to generate profit.
Although applications like google map is awesome. It is not enough to support a independent company because map service is not a basic application of Internet Industry. It is in the upper layer of online ad and search engine. Map services rely online ad to make profits and search engine to import users. However, no other service is based on map service. Mail serice is similar. That’s the reason why Google Map, Gmail and Hotmail indeed cannot operated by independent company, but only by Search Engine company or Online AD provider.
2. Easy to understand.
No investor want to invest in a program he doesn’t understand. No matter how good the technology is, you cannot even start without the initial investment.
3. Gap with existing technology Or Ignorance of Existing Gaints.
The fall down of Netscape owes to its violation of this condition. Despite its importance, Web browser is indeed a simple software which is easy to reduplicate. At first, Microsoft didn’t realize the importance of web browser and didn’t pay much attention to this emerging market. However, the improper speech of Netscape’s CEO and the alliance of Netscape and Sun, the main competitor of Microsoft at that time, infringed the godfather of software industry. A crazy revenge started when Microsoft bind their own web browser to OS. In fact, it took Microsoft only several months to develop their own web browser and performance of IE caught up with Netscape Navigator in one year. With the profit generated by Windows OS and Office suite, Microsoft had no intend to earn money before Netscape is closed down.
4. Low Monetary Investment At the beginning Stage And Foreseeable Profit Model.
This can be used to explain why youtube is sold to Google. It is well known that online video is a promising mainstream application in the future. And youtube has solidify its own consolidate its leading position in video sharing market.  If the cash of youtube is enough to support itself for 3 year or long, there is no need for steve chen to sold youtube. However, online video uses so many network bandwidth that few investor has patience and enough money to wait for such a long time. Besides, if youtube has forseeable profitable profit model which can helps to persuade investors, youtube can walk longer in the way of independent development.

Unfortunately, youtube lacks both of the essential conditions. As a result, it is reasonable to accept the price when Google bids for 1.5 billions.