American internet giants are "clustered" around Web3

Author: Zhou Zhou, Huxiu

Web3 has become a "hot topic" among major American internet companies recently.

This year, Amazon and Google have been openly competing for the Web3 cloud service market, trying to "poach" each other's customers; Musk and Zuckerberg seem destined to "clash," as they control the two major social products, Twitter and Facebook, and are both eager to see who can launch NFT products faster. E-commerce giants from the U.S., Canada, and China are engaged in a "Three Kingdoms" battle, with eBay, Shopify, and Alibaba exploring the NFT and Web3 markets overseas.

Regardless of their main business, American internet giants are ready to explore Web3.

Huxiu observes that at least eight major American internet companies, including Meta, Google, Amazon, Twitter, eBay, Netflix, PayPal, and Square, have taken concrete actions to explore Crypto or Web3. Some American internet giants, such as Google and Square (the American version of Alipay), have even publicly announced that they will prioritize Web3 in their corporate strategies.

Especially in June, although the cryptocurrency market entered a bear market and investors were "in despair," this did not affect the giants, who continued to announce their explorations of Web3 in markets like the U.S. and Canada.

E-commerce giant eBay (U.S.) acquired the NFT art market KnownOrigin on June 22 and submitted an NFT trademark application yesterday (June 28); another e-commerce giant, Shopify (Canada), announced the addition of Token gating features in its new platform version and collaborated with well-known NFT projects like Doodles, World of Women, and Cool Cats. Coincidentally, Alibaba (China) also announced its NFT solutions overseas this month.

Alibaba Cloud proposed an NFT service plan, but the content has since been deleted.

In addition to the three major global e-commerce giants gathering around Web3, social giants like Meta and payment giants like Mastercard have also made significant moves this month. Meta founder Zuckerberg announced an expansion of the NFT testing scope, allowing creators to showcase their NFTs not only on Instagram but also to cross-post on Instagram and Facebook; payment giant Mastercard collaborated with seven Web3 companies this month to integrate its payment network into this new field, while American Express also expressed optimism about the long-term value of crypto payments.

As the clock struck mid-2022, the enthusiasm of American internet giants for Web3 had been fully unleashed.

Of course, the level of attention and participation in Web3 varies among the giants. Some giants make a lot of noise but little impact, while others have been quietly reaping substantial profits in Web3 for years.

"Amazon has already made a fortune; a leading crypto exchange needs to pay Amazon several million dollars each month, and Binance even brings in nearly $100 million a year for Amazon," several individuals close to AWS (Amazon Web Services) told Huxiu.

The "old rival" Google noticed this and began forming a Web3 team last month (May 2022) to "poach" Amazon's customers. Google stated in an official blog that the Web3 craze is akin to the rise of the internet ten years ago, boldly announcing its entry into this field to companies in Web3.

Web3, an internet ecosystem based on blockchain technology, is referred to as the next generation of the internet. It aims to return "ownership" of data to users rather than large platforms, a change considered a data revolution in progress.

From divine right to human rights is a revolution; from platforms owning data to users owning data is also a revolution. Their common characteristic is that the public gains more rights and greater freedom than ever before. Jack Dorsey (founder of Twitter and Square) was the first American internet giant founder to go all in on Web3, and some American internet entrepreneurs represented by him are participating in the construction of Web3 with this mindset.

However, previously, Jack Dorsey was alone in his efforts. This year, most American internet giants finally reacted, recognized the value of Web3, and decided to explore it.

Internet Giants Are Competing Again, This Time in Web3

As the "vanguard" of internet giants exploring Web3, competition among cloud providers is the fiercest.

"I can clearly feel that this year many cloud providers that compete with us have started to pay attention to Web3 and are trying to leverage some of our existing businesses," an AWS employee named Tianming told Huxiu.

"The Google Cloud team doesn't care much about small teams and prefers to choose larger Web3 companies," a person close to Google said. Huxiu learned that although there are currently over a million Web3 companies, small companies typically spend $10,000 to $20,000 per month on cloud services, which may not even match what Binance spends.

Before 2022, most Crypto and Web3 companies chose to use Amazon's cloud services. For various reasons, Google, Microsoft, Alibaba, Tencent, and Huawei did not pay attention to this field at that time, allowing Amazon to dominate the market, currently holding over 50% of it. Crypto giants like Binance, OKX, and Huobi all use Amazon's cloud services, as do many Web3 companies that emerged this year.

Another AWS employee, Cheng Xin, told Huxiu, "AWS focuses on large clients and pays great attention to supporting new fields, establishing internal funds of over $20,000 for startups to support their growth." This strategy has attracted many new industry players to use AWS cloud services, giving Amazon a significant advantage and substantial profits in the Web3 field.

"AWS often holds conferences, and I find that many people from the Crypto and Web3-related industries consult us about cloud services," Cheng Xin said.

However, several AWS employees working in the U.S. and China told Huxiu that starting this year, they have clearly felt an increase in the number of times they are "poached" by competitors.

Many cloud providers under internet giants have "come to their senses" and realized that the Web3 field is a large cake that is hard to ignore, and they are all stepping up their efforts. Google Cloud compares Web3 to the internet ten years ago and has specifically formed a Web3 team; Microsoft has posted job openings for professionals who can expand in the Web3 field; Huawei Cloud is actively expanding overseas Web3 companies, not only frequently making its presence known in Web3 discussions on Twitter but also making good progress with companies in its ecosystem; Alibaba Cloud is not to be outdone, announcing NFT solutions for overseas users…

In just a few months, cloud providers have flocked to Web3, giving a sense of "overcrowding."

In addition to "cloud + Web3," some American internet giants are also exploring various other "X + Web3" business models, such as "social + Web3," "payment + Web3," and "e-commerce + Web3."

Huxiu observes that currently in the U.S., payment companies exploring Crypto and Web3 have become a trend. Major American payment giants like Mastercard, PayPal, and Square have almost all entered this field.

In terms of participation, giants like Square, which rose during the internet era, have almost gone all in on crypto, with crypto revenue accounting for a significant portion of their innovative business; PayPal (the American version of Alipay) has made advanced arrangements and is aggressively seizing the overseas crypto payment markets in the UK, Japan, and elsewhere, employing strategies similar to those used in the mobile payment era; Mastercard has partnered with seven NFT companies, including Immutable X, to bring its payment network into Web3, allowing users to purchase NFTs directly using debit and credit cards.

In addition to the Web3 payment sector, the Web3 social sector is also thriving.

Huxiu observes that there are currently dozens of teams in China working on Web3 social, attracting attention. For example, CyberConnect reported in late May that its protocol had reached a total user count of 1.46 million, with a total of 19.2 million connections.

As the two major social giants in the U.S., Twitter and Meta are naturally experimenting with business models related to Web3 social.

Meta founder Zuckerberg announced an expansion of NFT testing for creators, allowing more creators to showcase their NFTs on Instagram, and in the future, users may cross-post on Instagram and Facebook.

Currently, among the two major social products in the U.S. (Twitter and Facebook), Twitter is the most aggressive and is exploring the Web3 field the most. It not only has a dedicated team but has also set up various Web3 applications on its main product.

Although Meta is a bit late to the game, it has a natural advantage in entering Web3, exploring a unified payment method called Meta Pay, and attempting to bridge the gap between its two major social products: Instagram and Facebook.

Imagine a scenario where people's data is presented in the form of NFTs, and this data does not belong to internet giants, allowing people to freely migrate this data across platforms. Creators could transfer their Facebook fans to Twitter, Weibo, and WeChat public accounts, rather than starting from scratch each time they use a new internet product.

Fans are data and one of the greatest assets for creators. This wealth can be shared across platforms rather than being limited to one. The power of platforms is greatly diminished, while the power of influential users continues to grow, allowing the most creative individuals to gain greater voice in such a mechanism. This will significantly stimulate creativity, as every piece of data produced by people represents a copyright, a form of wealth.

The social products people currently use are almost all incompatible. When a creator publishes an article or image on WeChat, they cannot post it on other ecological platforms like Instant or Twitter. This is not because social products cannot innovate further, but because major social giants monopolize the entire social market, making any innovation easily replicable within their ecosystems.

When data belongs to users, they can freely choose to publish images or articles on any platform, and creators can migrate their fans to new platforms, allowing users to truly take control of the information world.

For internet giants, as Web3 attempts to shake the current centralized internet structure, it also presents enormous opportunities for them.

Without new technologies emerging, internet giants will inevitably face business stagnation and fall into the dilemmas of traditional industries. However, the cloud service resources, social resources, mobile payment resources, and e-commerce resources that internet giants have previously accumulated are not entirely incompatible with Web3. Correspondingly, while Web3 attempts to disrupt some major companies, it also creates vast markets and profit opportunities for "cooperating" internet giants.

Taking cloud providers as an example, there are currently over a million Web3 "companies," and almost all of these companies use centralized cloud services, allowing providers like AWS to earn substantial profits. In fact, it appears that Web3 is attempting to disrupt some major companies while simultaneously creating greater market demand for another group of internet giants.

The Old World is Crumbling, and a New Era Has Arrived

The emergence of Web3 has not only garnered support from internet giants this year but has also attracted increasing attention, importance, and action from more countries.

Huxiu previously reported in "Japan is Determined to 'Seize the Beachhead' of the Next Generation Internet" that in the past month, there has been a surge of interest in Web3 learning in Japan, with even the Japanese Prime Minister planning to promote Web3 development from a political perspective. On May 26, Prime Minister Fumio Kishida stated, "The arrival of the Web3 era may lead to economic growth in Japan. We believe that integrating new digital services like the metaverse and NFTs will bring economic growth to Japan. As we enter the Web3 era, I strongly believe we must resolutely promote this environment from a political standpoint."

Meanwhile, neighboring India is also vying for the position of Asia's Web3 leader. Due to its population rivaling that of China, a comparable number of programmers, a maturing local internet ecosystem, and a surge in domestic unicorns, giants like Sequoia Capital have significantly increased their investments (amounting to $2 billion) in India this year, with Crypto and Web3 being a key focus.

As the center of this technological wave, the U.S. has gathered the best talents, technologies, and companies from around the world. Top talents from Silicon Valley, Wall Street, and the SEC continue to flow into this field, allowing the U.S. to maintain its leading position in Web3.

So, why does Web3 attract so many major countries, internet giants, and top talents?

The answer may return to the essence of the internet. In the internet era, data is a fundamental element, and all internet activities revolve around this element.

During the Web1.0 and Web2.0 phases, the data element was tightly controlled by major platforms. Fairness, efficiency, and security formed the impossible triangle of data.

In the Web1 and Web2 phases, to allow data to flow freely, it was necessary to rely on internet giants to "monopolize data" (sacrificing fairness) to maximize efficiency. However, now the efficiency of data has reached a bottleneck, while the security of data (if the cloud platform of internet giants collapses or misuses big data) and the fairness of data (data is generated by everyone and can create social value, but not everyone can obtain the corresponding benefits, akin to working without receiving a salary) have not made significant progress.

Previously, internet giants "monopolized" data without providing benefits to users, instead offering more convenient services. However, the generation of data by humanity is an eternal process; internet giants may collect development dividends in the early stages but cannot forever rely on past achievements to reap data benefits for a lifetime.

When the monopoly of data by internet giants reaches its peak, having squeezed social innovation to its maximum extent, a data revolution will emerge. People will take the power of data away from internet giants and return it to the public.

Specifically, NFTs (non-fungible tokens) represent a unique form of data that belongs solely to individuals, with intrinsic value, thus liberating ordinary people from the "monopoly" of data by large platforms.

An image is data and an NFT; when people create this artwork, the corresponding value of the data can be given to the creator, rather than being owned or dictated by the platform.

As a painter, this artwork attracts many fans, and these fans will also be individual NFTs, becoming data and assets for the painter. When users prefer Instagram, they can migrate these fans to Instagram; when they prefer Facebook, they can transfer these fans to Facebook. Because NFTs empower users to control their data.

Data is the largest "gold mine" of the 21st century, yet people have not realized that data belongs to individuals and is an inviolable asset.

This is a data revolution, and companies riding this wave will constantly "swing back and forth" between efficiency and fairness. However, when we extend the timeline, we will find that the overall trend of internet development will flow towards a more decentralized, more democratic, and more public-interest-oriented landscape.