The news last month that Microsoft may wind up offering Facebook $500,000,000 for a 5% stake is great news … for the tiny number of Facebook insiders who stand to gain from this move which would effectively value the social media giant at about $10,000,000,000. However for the millions of Facebook folks who provide the content and faces that drive Facebook it means … um … more advertising.

Gee, thanks Facebook.

When the legions of “Information Serfs” wake up they may start to realize that we have got a potential crisis as small numbers of “info intermediators” like Google and Facebook scoop up the lion’s share of the online ocean of cash while the “info creators” are distinctly second class citizens in the big show. Small time web publishers and mom and pops are in this group. But so are all the major newspapers like the New York Times, Washington Post, and WSJ. Also most other print outlets who tend to make relatively little online despite offering much of the web’s best content to date, especially now that the foolish paywalls of some newspaper outlets like NYT are coming down. Having no paywall will allow them to make more, but it’s clear they are unlikely to make enough to keep all that high quality content coming.

Print and newspapers are hurting and that is going to continue. That’s OK as long as websites and blogs continue to provide great insight and breaking news, but it’s about time the big players in the online world start working *a lot harder* to feed the hands that are feeding them. It’s about time they realize that the best web ecosystem must encourage the production of high quality content as well as the valuable but mind-numbing data detritus left over from social networking gone wild.

Yes, it is true that revenue sharing programs like Google adsense give publishers a fair share of the revenues that come directly from activity at their websites. However most of Google’s money (and virtually all of Myspace and Facebook revenues), comes from advertising they run off their own sites – sites that benefit indirectly but dramatically from the oceans of content they feature, index, or otherwise mashup, clip, and snip. Sure the information intermediators should make *a lot* from categorizing *our content* so effectively, but should they make 100%? No, they should not.

One can make a good case that this feudal funding arrangement was fine when the big players turned around and did things with the big money that make the internet ecosystem thrive and grow in ways it could not without their involvement. But I think that argument was far more valid a few years ago than now.

What ideas are left in the dust as the Youtubes and Facebooks – built squarely on the shoulders of other people’s content – scoop up the super gigantic big money? It is not a problem that startups die – in fact it’s a good part of the ruthless evolution of technological things – but it’s problematic when the lion’s share of online resources from the work of so many are redistributed to so few. Not because this is “unfair”, but because this type of inequity does not lead to optimal system efficiency and growth.

Social media in all its various and sundry forms is a wonderful development. Finally we see clearly that people, not computers, will be at the heart of future online developments – probably for some time into the future. Facebook and it’s users are now leading with big innovations in this area, though Alice at NYT thinks this could lead to unintended consequences.

To protect this new socially charged online environment from the ravages of our silly, stupid and prurient human interests we’ll need better incentives than the big players currently offer to quality content producers. Those incentives will ultimately shape the quality of online content for years to come.