The Internet Revolution 10 years after

Just by accident I came across Michael Lewis' book Next, written after the Internet boom of the late 1990's. Lewis' argument was that Internet brings down the establishments simply because "the Emperor has no clothes": there is nothing inherently different in things done by a highly paid member of the establishment in a fancy office, compared with things done by a high school student through an internet connection. Moreover, old, centralised business models and computing models will be doomed as well.

Ok, it's 10 years later. People do get legal services and download music (even legally) through Internet. There are peer-to-peer services. There's Google. But mainly internet services seem to be provided by companies that were there before the age of Internet.

Maybe it's because of this sequence by Andy Kessler in the same book, as follows:

1. Rules are established to create order and maintain profits for incumbents.
2. Cheaper technology suddenly allows for bypassing of the rules.
3. Incumbents are fat and dumb and happy with current monopolistic profits and their general situation, so they bad-mouth any new stuff which threatens their incumbency or profits, or both.
4. Fringe players emerge to use ever cheaper technology to simply ignore the rules.
5. Fringe companies attract venture capital since there are profits to be made underselling the incumbents.
6. Incumbents are in denial until their profits are really threatened and/or market share begins to erode.
7. Chaos ensues; fringe players are threatened w lawsuits, government regulations, public shaming, etc.
8. Growth at the fringe accelerates, as it is the right way to do business using new technology.
9. Incumbents co-opt the fringe, or fringe players become the new incumbents and seek to establish new rules.
10. Go to 1.