stay in touch: the political economy of the internet and its relation to internet users
TRANSCRIPT
Stay in Touch:The Political Economy of the Internet and itsRelation to Internet Users
Immo Erik Hagemann
This was a set assignment, written as part of my recent M.A. in Mass Communication (via distance learning) at the University of Leicester, United Kingdom in June 2013. The original questioning:“How far does the political economy of the Internet enhance, restrict or otherwise influence the activities of Internet users?”
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Introduction
“New media”, in its most current guise as the Web 2.0, introduces a di-
stinct two-way form of interaction, based on the principle of reading and con-
tributing (Gauntlett, 2004: 3). With Facebook use globally approaching the one
billion mark, “blogging” beneficially resembling the Habermasian public sphere
ideal and online-whistleblowing through platforms like Twitter or Tumblr taking
on agencies of authentic “from the horse’s mouth” reporting, the ideal of direct,
democratic online participation and withdrawal from overt commercialism is ap-
parently upon us. I argue, that the opposite is the case. Benefits remain superficial
and commodifying power-structures remain active underneath, as evident in mer-
gers of media corporations with internet service providers.
This paper integrates three key areas: the content-providing functions
of the internet that supply financial viability (eg.advertising structures) the so-
cio-economic, ethnic and gender-oriented user demographics and the purposes
and objectives why the internet is being put to use. Recent examples such as the
Yahoo!-Tumblr take-over and relevant theories such as the Habermasian public
sphere as well as the Frankfurt School’s views on the culture industry will be in-
tegrated.
1 A Political Economy for the Internet
When AOL bought TimeWarner in 2000, large-scale monopolist internet
access became available to one of the most prominent media catalogues. These
concentration processes are not new phenomena. In 1970, British newspaper pub-
lishers IPC attained interests in Reed Group Ltd. (trading in paper raw materials)
as a move to fend off cost and supply fluctuations (Murdock & Golding, 1973:
206-7). Mergers within the supply chain of production (studio), distribution and
display (theatres) in film resemble this. The takeover of British Relay Wireless
by the Electronic Rental Group, financed by ERG’s largest shareholder Philips,
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exemplifies commercialisation mechanisms through vertical integration with ves-
ted interests. ERG became the second-largest television rental group in the UK,
which aided Philips’ entrepreneurship in video technology (Garnham, 1979: 3).
Vertical integration and concentration of online proprietors serve the purpose of
solidifying financial backing, reduced expenses and maximum control onto the
supply chain.
Here, the political economy approach is twofold: liberal-conservative vie-
wpoints focus on consumer sovereignity as the determining factor of available
choices within market competition (Chadwick, 2006: 290). Theories, that were la-
ter named critical political economy (CPE), especially in Murdock and Golding’s
work, emphasize economic and social power-relations in determination of what is
available to whom. They also employ a historical viewpoint to trace developments
and to counter “presentism” tendencies of the internet’s entrenched technological
determinism (Hardy, 2010: 195). Severely put, CPE places responsibility on “the
corporate take-over of public spaces” (Schiller, 1989; in Hardy, 2010: 189) – how
the media industries cater for universal access and social inclusion and how they
contribute to reinforcing or undermining political and social inequality (McChes-
ney, 2003; in Hardy, 2010: 187). CPE does not oppose liberalist promulgation of
citizen-serving media, but it applies the Marxist view that the media industry may
not be able to achieve this in socially-acceptable ways (Hardy, 2010: 189).
1.1 Core Issues
The three processes of political economy, commodification, spatialisation
and structuration (Mosco, 2004: 18), are applied by online proprietors to facilitate
another core entity of the internet’s commercial imperative: scarcity. Restricting
availability creates opportunities for commodification in order to create a sellable
product with distinct market value (Schiller, 1981; in Elliott, 1982: 260-1). The
internet regulates this through technical restrictions (eg. limited bandwidth), re-
stricted content (eg. pay models to access specific areas) and unavoidable adverti-
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sing models, which adhere to principle of attention economy – such as pro-active
deletion of online adverts to reveal the desired content. This bargains on the user’s
attentiveness and information-gathering perserverance.
These scarcity principles oppose the Habermasian theories of the public
sphere where the internet resembles a global and democratic platform to freely
exchange knowledge and information. Habermas foregrounds principles of soci-
al interaction, closeness/intimacy and a liberalized morality (historically aligned
in opposition to courtly conventions), which were institutionalized through tab-
le societies/salons and equally accessible to “common humanity” (1989: 237-8).
Gauntlett sees Wikipedia as its epitomy because liberal addition to knowledge
eschews unfruitful discourse under using nicknames (2009: 16). Institutions, hie-
rarchic structures and social conventions, however, are circumnavigated through
anonymisation (eg. forums/online chats). Spatial barriers are discarded through
the internet’s global ubiquitousness. Creating new possibilities for civic political
activity also represents the public sphere ideal (Downey, 2009: 35) – this later
developmental stage introduced layman journalism through art critic publications
(Habermas, 1979: 241) and pamphlets. Their online counterparts become evident
in today’s blog culture.
1.2 Implications on the Audience
The internet combines two agencies: commercial enterprise resulting
from the three processes of political economy (see section 1.1) and a facsimile
of Habermas’ public sphere equality evident in the publically contributed open-
source movement (Mansell, 2004: 60) such as digital cultural-commons and li-
beral transfer of (often unverified) knowledge via Wikipedia. Garnham describes
this as two clashing concepts of audience freedom: while politically drawing on
the Marxist concept of market power constraining society, economically it fol-
lows Hayek’s theory, that free markets will condition democracy and plurality by
themselves (1986: 246-7). Adorno’s and Horkheimer’s theories that the culture
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industry is no more than an achievement of standardisation and mass-production
(1979: 78) gain evidence through their Marxist view of a cultural superstructure
of ideas, which are determined by the base (Boyd-Barrett, 1995: 7-8). Although
initially disagreeing, Garnham proposes the restoring of balance in media through
suppression of either orientation. The internet’s participative element bypasses
this model by juxtaposing equal participation and overt commercialism to make
user-generated content a commodity.
2 Online Commercialisation
When the Internet became generally available during the 1990s, the libe-
ralized media markets (augmented by the 1994 European Telecommunications
Act), transformed it into a dual product platform (Hardy, 2010: 193), predomi-
nantly led by commercial enterprise (Patelis 2009: 19). Processes of the preceding
commercialisation of broadcasting were revisited; the creation of audiences for
advertisers became the main objective.
Search engines, especially Google that deliver users to advertisers by sur-
veilling search behaviour are an institutionalised indicator of where the political
economy of the internet becomes evident: defining content through a system of
commodified prioritizing (Van Couvering, 2004: 3-4) sees advertisers pay for an
advantageous ranking (Albarran, 2009: 16). The internet’s technological infra-
structure affords commercial exchange between businesses as well as self-ex-
pression and a new community form (Van Couvering 2004: 6). Consequently, the
internet’s political economy is a hybrid of these. A recent example for this is the
takeover of the online blog platform Tumblr by the internet portal Yahoo!.
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2.1 The Yahoo!/Tumblr takeover
As a founding figure of internet culture, Yahoo! represents concentrated
and commercialised top-down communication which struggles to remain relevant
within the participatory open-source ethos of the Web2.0 of which the blogging
platform Tumblr is now a key proponent. The old commercialised structures took
a severe hit when the so-called “dotcom-bubble” burst in 2000 and the Web2.0
represents reorganisation of the internet under the objective of documenting its
users and uses (Livingstone, 2010: 135).
Yahoo! CEO Marissa Meyer describes the takeover as “monetizing con-
tent”. 13% of the internet’s users aged 18-29 use Tumblr and represent the most
relevant target group for advertising. Yahoo!’s objective is to reach a young and
increasingly female audience “to save its ageing brand” (Rosenberg, 2013). The
apparent female bias towards shopping, “trend-hopping”, social interaction and
rising solvency adds value to advertisers.
Figure 2.1: Percentage of Internet Users Who Use Tumblr
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2.2 Commodified Content
Necessities of observing user demographics notwithstanding, much in-
ternet study is rooted in technological determinism; technology being the driving
force behind social change (Curran, in Patelis 2009: 5), while the internet itself
structures social, political and cultural activities (Castells, 2002; in Livingstone,
2010: 126). Patelis opposes Curran’s claim by saying that technologies them-
selves are shaped by political, economic, social and cultural choices and deve-
lopments. Culturally generated content of internet pages becomes commodified
through search engines such as Google, which employ the user entries to make
culturally motivated interest marketable to advertisers (2009: 5-6). This process
of “remediating cultural life” (Bottler, 2001, in Patelis, 2009: 8) has created a ta-
xonomy of technological features designed to achieve this commodification, such
as filtering devices, “cookies”, and information brokers (Patelis 2009: 8-9).
Furthermore, the internet business is largely an oligopoly, if not a mono-
poly, of powerful players. Alternative search engines to Google (such as Bing or
Search.com) remain niche providers (McTaggart, 2006: 6), while Facebook do-
minates the social networking domain, despite alternatives like Diaspora or MyS-
pace. Google is not just a search engine, but a network of computers designed for
high-performance data processing. Its sheer size and technical facilities distort
the internet’ neutrality objectives (McTaggart, 2006: 7). We witness commercial
hegemony in a Gramscian sense, that incorporates user subordination, within with
the civic participation of the Web 2.0 acts to recreate a compromise equilibrium
(Gough-Yates, 2007: 20-21).
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Figure 2.2: Global Market Share of Search Engines (2010)
Alternatively, the internet’s structure bypasses globalized, oligopolistic
hegemony or state and market colonization (Hardy, 2010: 197). Its infrastructure
allows content to remain locally produced and globally disseminated. This creates
hybrid transcultural commodities (Patelis 2009: 9), which entice the imagination
of users while preserving local identity. They represent the user-generated-content
culture of the Web 2.0, of which Tumblr is a part. There may be commodification
present through the sale of advertising space – Forbes Magazine in February 2013
reports $13.000,000 advertising revenue for Tumblr in 2012 – but its business
model (interlinking user-generated content to create multi-medial/-modal sites)
emphasises personalisation and locality.
3 Internet Audiences
Besides the two core audience properties within the political economy
of any media – attention (to content) and spending power (Gauntlett, 2009: 5)
– a third one, the direct relationship of online content and audience, is internet-
specific the relation of audiences to media providers. While political economists
emphasize the relationship of proprietorship and content (Gauntlett 2009: 5), this
is often overlooked, especially regarding the participation objective of the Web
2.0.. It is here that the term “audience” is to be superseded by “users”. Earlier the-
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ories by Fiske (1989, in Gauntlett, 2009: 8) point to audiences reinterpreting (old
media) texts to make new meanings. The replicability (see section 3.2) of Web 2.0
content gives this meaning-making enhanced publicity and opportunity for disse-
mination. It is “folk culture” (Leadbeater, in Gauntlett, 2009: 22) and it thrives on
the principle of utilization by “prosumers” or “co-creators” (van Dijck, 2009: 42)
3.1 Motivating the Users
The Habermasian ideal of the early internet fosters free and homologous
exchange of data, information and knowledge for those, privileged enough to par-
ticipate: Governments, the military and academia. These gradually retreated from
the expenses (Patelis, 2009: 19) and, alongside Tim Berners-Lee’s many innova-
tions (Gauntlett, 2004: 3), the internet became a public sphere for individuals as
well as a commercialised multi-platform medium for advertisers and new media
businesses (Mansell, 2004: 100), the latter reaffirming the power-relations retai-
ned from “old” media forms. The Web 2.0 has re-emphasized users as direct parti-
cipants with universal access. Much of this is achieved by what Dimmick et al., in
their research on multimedia uses, termed gratification (2004: 5). It is based on the
internet’s initial utilization as a source of pleasure and entertainment and on the
detachment from rigid old “media content, time and space attributes” (Dimmick
& Wallschlaeger, 1986, in Dimmick et al., 2004: 5-6).
Ivan Illich’s theories on conviviality from as early as 1973 preempt the
Web 2.0. His experimentations with free data and information exchange through
separate computer terminals led him to his phrase of “tools for conviviality”. He
translates “conviviality” as “autonomous and creative intercourse among per-
sons...” and places it in contrast to industrial productivity, that results in audience
passivity and prevention of education (in Gauntlett, 2009: 24). Illich occupies a
more sanguine position on the CPE of the internet. His theories on conviviality
present an early form of user gratification.
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This gratification concept includes sociability and disposability and is a
main determinant for the internet’s political economy, however, in provoking a
tug-of-war with the old commercialised pre-Web2.0-structure. The free-parti-
cipant form clashes with the delivery of audiences to advertisers: personal ent-
ries on social networks, online search histories and retailer page visits create an
IP-address-related user profile for personalized advertising placement (Gaunt-
lett, 2009: 27). Each Google-search, each YouTube-selection, each “liking” and
“friending” constructs an ideal consumer.
3.2 A Typology of Users
The most comprehensive typology of ICT users is assembled by the Pew
Research Center ion U.S. Citizens with Gender questions not being considered.
It dates back to an earlier developmental stage of the Web2.0. Facebook had just
been launched and MySpace was still the most popular user-generated content
platform. Downey notes, that women are overrepresented as “connectors” (55%)
and in the categories downward from “connected, but hassled”, with quotas ran-
ging from 57% to 61% (2009: 16-17). The communicative nature of social net-
working, blogging and peer-to-peer-sharing will now see increased female parti-
cipation, significantly in the Elite-Tech-Users section as well as further decreased
proportion within Few-Tech-Assets. Due to increasing utilisation of internet ac-
cess via “smartphones”, Mobile-Centrics are expected to multiply: In many Af-
rican countries this already serves to overcome the digital divide and to provide
socially widespread internet access, with smartphones taking on the role of low-
power computers (Downey, 2009: 24).
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Figure 3.2: Typology of ICT Users
Trebor Scholz (in Gauntlett, 2009: 27) radically describes the Web 2.0 as
a “cyber sweatshop” for its users. Commercial imperatives are supplemented by
the audience’s employment as content providers, citizen journalists and as (gulli-
ble) selectors. Their choices transform their online profiles into moving targets for
advertisers. Michael Zimmer describes platforms for user-generated content as
“the exploitation of free labour for commercial gain” (in Petersen, 2008: 7) while
Boyd (2007a, In Albrechtslund, 2008: 3) singles out four properties that facilitate
this within social networking: persistence (of submitted information), searchabili-
ty (its recurring availability), replicability (editable information becomes detacha-
ble from its intended meaning) and invisible audiences (the transferral of personal
interaction into a publicness of covert identities).
The first two properties, persistency and searchability, also affect audien-
ces outside of their internet use. Social networking/blogging content is increasin-
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gly surveilled by employment agents and authorities through lateral peer-to-peer
participatory surveillance (Andrejevic; in Albrechtslund, 2008: 6-8), when con-
duct and presentation is being questioned. Many times, the availability of data and
the feasibility of such measures belies the fact, that the online persona is distinctly
different to the actual person. Thus, contemporary online culture is not yet being
embraced by society at large and is still envisaged as a taboo subject, due to the
consequences for the invisible audiences, although the majority of users employ
their real names online.
Another legislative aspect of free information exchange became apparent,
even prior to the Web 2.0. As commodification morphed into digitisation, con-
tent could be distributed, accessed and traded online. The concept of gratification
(see section 3.1) is part of this. Technological progress and the availability of
open-source software enabled users to undertake digital conversion themselves
by converting content to easily-distributed files and to share these freely and des-
patialized through peer-to-peer sharing software. Sales of physical media product,
especially music-CDs, have declined steadily and many publishers are seeing
their business models annihilated. The economic model of producing scarcity is,
thus, challenged (Patelis, 2009: 14). Consequently, internet technology also saw
advancement as a tool for law and policy: as digital rights management techno-
logies (Braman, 2009: 14). Another counter-measure by the media industry were
mergers of content providers with ISPs, similar to the AOL/TimeWarner fusion.
A lack of proportionate judgement and the proneness to errors provides
risks: a mistaken IP-address could lead to prosecution. Relatedly, the user-gene-
rated-content principle itself raises new questions on legal conduct. Online dis-
course can produce prosecutions on libel. Autocratic governments fear that the
rapid spread of opinions could cause unrest. Because of its global structure, the
internet cannot be unanimously regulated, except for territorial interests, which,
because of the internet’s borderlessness, have little effect on globally-accessible
content (Albarran, 2009: 22).
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The liberal communication flow is also a problem: intially protected by
laws to guarantee the privacy of communication, the digitisation effects of concen-
tration and structuration (see section 1.1) allow for easier surveillance of private
conversation by mere data analysis, rather than by evidence of suspicious beha-
viour (Marks, 2006; in Albrechtslund, 2008: 4); this especially is the case within
the 21st Century’s anti-terrorism laws. Anonymity through nicknames and avatars
is countered through government surveillance of social networks, IP-addresses
and, consequently, the registered user addresses and their often gullible accep-
tance of end-user license agreements (Braman, 2009: 43-4). This ties in with the
“knowledge gap” issue and the people’s abilities to employ technical measures in
ensuring anonymity (eg. through filtering software or anonymising functions).
The blogging-culture has, however, brought the internet closer to the de-
mocratising ideal of the Public Sphere. Many blog applications, such as Word-
Press, have open-source origins (although Blogger.com has since been taken over
by Google). Gauntlett describes it as an “old-style use of the internet” (2004: 6) in
its low design-consciousness, the easy-to-use templates and the egalitarian deme-
anour. The replacing of old, one-way-flow corporate websites through blog-type
sites or entire moves to social network pages is a current trend to convey a sense
of currency and up-to-dateness.
Blogs also turn people into citizen journalists and broadcasters – a 2008
study by Deloitte names 32% of respondents agreeing to be “broadcasters of their
own media texts” through available technology (in Gauntlett, 2009: 23). This de-
velopment takes on extra significance – much first-hand information about the
Arab Spring uprisings had been provided via blogging sites and online videos
and, as I write this, the protests and upheavals in Turkey are similarly commented
and disseminated to great effect. Added political weight may create situations of
extra surveillance, with many post-9/11 legislations (e.g. the U.S.A Patriot Act)
having gone beyond the clear-and-present-danger-test and utilising merely for-
mulated intention as evidence of threat to society with possible terrorist motives.
The current NSA affairs are a testament to this. Crossing a speech/action-line is
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increasingly preponed. The internet’s surveillability becomes utilised, the chal-
lenges of creating a border-crossing jurisdiction notwithstanding (Zittrain, 2005;
in Braman, 2009: 15-20) .
3 Access and the Digital Divide
Participative democracy restricts itself only to those with internet access.
It excludes elderly citizens, the poor, illiterate and the socially-excluded (Braba-
zon, 2008b; in Gauntlett, 2009: 26). The older generation has not come of age
with computing and the internet. Computer and internet use requires literacy, a
certain level of general education as well as sufficient finances for owning hard-
ware and paying for an internet connection. Consequently, the internet caters for
a predominantly middle class information elite (Gauntlett, 2009: 26).
The traditional concept of literacy, needs to be revised in an internet con-
text. Furthering public online access through libraries or schools will prove in-
efficient, if subforms of literacy such as media literacy, information literacy or
technology literacy are not furthered in society (Braman, 2009: 34-5). The gene-
rational factor is also still salient. We inhabit a transitional period which includes
citizens, that so far have been off-the-network (see Figure 3.2) for the majority of
their lives. Location is also important – many ICT providers have yet to achieve
thorough broadband network penetration of all territories, especially rural areas
may not yet enjoy sufficient coverage, the necessities conditioned by remoteness
notwithstanding.
While campaigns such as “One Laptop per Child” (USA) aim at reducing
the digital divide, many scholars see it as a persistent and increasing problem
that was conditioned by the neo-liberal political environment during the internet’s
formative years (Downey, 2009: 10). It remained unabolished by ensuing social-
democratic governments (such as New Labour) which, although in proposal of an
equal “information society”, adhered to the prevalent free-market ideologies of
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low taxation and retreat from public welfare. Consequently, a portion of society
could not partake in the internet revolution. However, since owning a computer
and enjoying access does not equate putting these to good use, the “knowledge
gap” (Vishwanath & Finnegan; in Braman, 2009: 34) deserves equal attention to
the “digital divide”.
Downey notes, that internet use has generated an increase of middle-class
internet-related jobs, that have gradually superseded working-class occupations
(2009: 12) through a shift towards service and information technology employ-
ment. This resultant “informational capitalism”, sees uneven distribution between
those skilled and those unskilled in computer-based work (Castells, 1996; in
Downey, 2009: 10). Furthermore, the migration of retailers onto the internet puts
people out of employment due to high street shop closures. Special online offers
may only reach those, who can actually afford to be internet users. This vicious
circle skews the internet’s supposed capability to increase social mobility (Blan-
den, 2005; in Downey, 2009: 30-32).
The necessity to actively participate online has risen in recent years. Pro-
viders of public service, councils, educational institutes as well as retailers have
outsourced many key areas onto internet platforms; firstly, to keep the workforce
low and, secondly, to achieve a marketable contemporariness. Additionally, in-
ternet availability of information or documents saves companies the need to print
and dispatch vast amounts of paper. Not only does the internet actively pass on
workload onto the user (such as producing valid travel documents), it is often an
exclusive source of such items and services. Likewise, to tie in the surveillance
aspects (see section 3.2), online transactions require the submission of personal
and financial data for registration and patronage (Patelis, 2009: 22), resulting in
internet users experiencing increased online exposure.
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Conclusion
By concentrating several channels onto one multi-platform medium the
users have manifold choices, which are determined by their requirements (Al-
barran, 2009: 23) with despatialized and extratemporal access. The downside is
constant technological surveillance of viewing habits for commodification purpo-
ses through advertising. Advertising is a financial lifeline to keep obscure internet
content alive. The most salient effect of the internet on its users is therefore an
economic one: financial wellbeing facilitates participation and fosters the domi-
nance of online trade, which, in turn, has negative ramifications on “old” media
and economy. This exacerbates the situation of those outside of the online world,
who experience loss of provision and social inclusion.
Social inclusion often supersedes the purely commodified internet aspects
by emphasising cultural and democratic agency; it can be unattainable for social
strata, that are often removed from the necessary intellectual assets. Of the two
technological internet agents (see section 2), commercial exchange dominates and
represses cultural self-expression. To restore the balance it is therefore vital to
provide continuing online inclusion for all members of society. Obstacles of cagi-
ness and inexperience of indifferents and inexperienced experimenters (see Figu-
re 3.2) need to be overcome. The interactivity of the Web 2.0 offers a plethora of
possibilites for inexpensive online exercises that users can complete in their own
time without having to travel and with entrenched experience-building in front of
the monitor. Selfhtml.org, an online website building course, was an early open-
source example for this.
The audience divide addresses the concept of social strata and issues of
solvency to acquire internet access. As a possible solution Downey suggests a
furthering of broadband internet access via television receivers, which had alrea-
dy been inaugurated by the UK’s FreeSat programme to save people the cost of
acquiring computer hardware. He also points out that actively tackling the digital
divide is an opportunity to pair government objectives (such as higher educational
17
levels and social inclusion) with the economic interest of technology manufactu-
rers, who will benefit economically (2009: 197-8).
The internet, in juxtaposing commodification objectives and the Haber-
masian free-for-all ethos of the Web 2.0, has itself become a political economy.
It delivers vast audiences to advertisers, it creates new business forms while ab-
olishing old ones, yet it is also a democratising factor of national agencies with
global reach. Is it socially beneficial panacea as expected by many of its early
advocates? This is unlikely, as only those already online gain benefits, while those
offline are increasingly disadvantaged (Livingstone, 2010: 137), since, as Webster
(2006, in Livingstone, 2010: 124) notes, the information-society has not yet deli-
vered a quantitative increase in information to lead to qualitative social changes.
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Diagrams
Figure 2.1: Percentage of Internet Users Who Use TumblrSource: Pew Research Center’s Internet & Americal Life Project Post-Election Survey, November 14th – December 9th 2012.http://pewinternet.org/Reports/2013/Social-media-users/Social-Networking-Site-Users/Demo-portrait.aspx
Figure 2.2: Global Market Share of Search Engines (2010)Source: Hitslinkhttp://www.surefiresearch.com/search-engines/yahoo-microsoft-union-approved-finally-some-real-compe-tition-for-google/
Figure 3.2: Typology of ICT UsersSource: Pew Research Center – A Typology of Information and Communication Technology Users by John Horrigan – May 6th 2007http://www.pewinternet.org/Reports/2007/A-Typology-of-Information-and-Communication-Technology-Users/Summary-of-Findings/2-Americans-sort-into-10-distinct-groups-of-users-of-information-and-com-munication-technology.aspx