Yaga, Yaga do! -- P2P meets micropayments

by Richard Seltzer, seltzer@samizdat.com, www.samizdat.com

This article was heard on the radio program "The Computer Report," which is broadcast live on WCAP in Lowell, Mass., and is syndicated on WBNW in Boston and WPLM in Plymouth, MA.

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I first turned to Yaga www.yaga.com as an alternative to Napster, for fetching music files for free. It was slower than Napster and fewer songs were listed, but with Napster shut down, it was the best show in town.

Then, experimenting, my 11-year-old son Tim discovered a whole new world out there:
1) The search results seem to differ according to who happens to be online. So while the song you want may not be available right now, try again in half an hour and it might be there.
2) Don't limit your search to audio files. Select "all types." That greatly increases your chances of finding a match -- perhaps in a format you hadn't expected: for instance, a music video that has the song you want synched with images. Many of these music video files seem to have been hacked together by very clever and creative individuals, just for the heck of it. They combine images captured from television (still and motion, from regular programming and ads) with music, dialogue -- anything. (E.g., in the middle of a serious scene, a character starts singing a commercial, with hilarious effect).

Who can play? To enjoy this new playground to its fullest, you'll want a fast Internet connection and lots of gigabytes. The average 4-5 minute music video runs about 30 megs. Yaga's technology speeds downloads. If your connection is faster than the PCs that are serving up the files, Yaga will connect you to several at the same time, taking different pieces of identical files from different sources and automatically patching them all together. But 30 megs a shot does eat up disk space.

FYI -- in the past "firewalls" were a nuisance that you typically encountered at work -- getting in the way of your experimenting with new and interesting capabilities. Nowadays, many people have cable and DSL connections and have installed personal firewalls to protect their machines from intrusion. So it would seem likely that the very folks who are well equipped for the P2P experience would be blocked out. Fortunately, Yaga makes it easy for those with personal firewalls to share files with one another.

So what is a P2P (peer-to-peer) experience? Yes, you use the Internet, but not the Web. On the Web, you post your content on a server, and your audience connects to that server to view it. If you interact live with other users, it is by way of all of you connecting to the same server at the same time. With P2P, the computers of individual users are connected together directly. This connection could be wide open to the public, mediated by a service like Yaga, which allows you to search through available content offered up by hundreds of thousands, even millions, of individuals.

Consider that when the Web went public in the fall of 1993, the average PC probably had a hard drive with a capacity of 50 megs or less. Today, middle-of-the-line PCs are selling with hard drives in the range of 50 to 100 gigs. When PC hard drives were small, it made sense that files should be stored on servers. Now PC hard drives are so large that anybody can store and serve up many large files. And the processing power of today's PCs is so great (1 GHz is becoming common), that with the speed of a cable or DSL Internet connection, your PC can serve up files to people around the world, working in the background, while you go about your normal computer-related/Internet-related tasks without even noticing the difference.

Also, the files that you access via a P2P connection are unlimited -- not just text, graphics, audio, and video: anything that can be stored on a computer. And the P2P service can be set up to be open to the public or only to authorized members -- allowing the construction of custom communication/collaboration communities -- a la intranet/extranet, or on a paid subscription basis.  The content can be available for free transfer, or for transfer only on payment -- allowing the creation of a smooth, fast, hassle-free marketplace for digital content of all kinds. Content can also be provided to subscribers in a push/channel mode (Yaga calls their offering of that kind "YagaNet Gold").

To enable the creation of that marketplace, Yaga just purchased MagnaCash, a micropayments startup.  MagnaCash processes small payments for a fraction of the fees assessed by credit cards. It can also track who earns what from every slice of every transaction -- artist, author, publisher, distributor, etc. -- and can distribute the proceeds accordingly. Money can enter the MagnaCash System from credit cards, bank acocunts and rebates/incentive. Inside the system, money can move from consumers to merchants, consumers to consumers and merchants to merchants. Then money can exit to bank accounts and credit cards. There is no need to establish your own merchant credit card account to participate.

So Yaga is not only opening up the capabilities of P2P to new business models, it is also capitalizing on micropayments -- the capability to very efficiently handle small sums of money, so consumers can pay minimum/token sums and content providers can get paid for their work, benefitting from access to a new set of customers. Micropayments technology has been available in one form or another for about five years. (I remember the Millicent effort at Digital well). But it never took off on the Web. Now maybe the time is right and P2P, rather than the Web, is the right platform.

If you'd like to learn more about Yaga, check the transcript of our recent chat session at www.samizdat.com/chat210.html and the related article Business model in motion -- Yaga offers an alternative to advertising for content-rich Web sites.

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