My new article for Forbes covering the real-time web is out this morning here:

There is a lot of fuss and confusion over the term “real-time Web” epitomized in this recent comment on O’Reilly Radar:

“I’ve been baffled about all the hype surrounding the ‘real-time Web’ in the past few months. Other than breaking news (which I already had no trouble finding online) I don’t see why everyone is excited about searching real-time content.”

To answer the question, real time is a big deal and it goes way beyond searching content on Twitter. Here’s why:

But real time has the most compelling possibilities for human interaction. Humans operate in real time–we receive information, process it and react in real time. Slowly our entire media and communications infrastructure–what Marshall McLuhan called “The Extensions of Man”–are moving into real time. On the Web this is most commonly understood through services like Twitter or Facebook where communications with your friends and their status updates flow as a constant, up-to-the-second feed. But that is just the beginning. The real-time Web is being used to coordinate group action as it happens–from protest actions in Tehran to Moldavia to California. As a consequence, the next decade will be defined by the rights and regulations surrounding privacy, anonymity, free speech and the right to electronically assemble–as citizens flock to the Internet as a means of promoting civil change.

Real-time systems also help to build social bonds and accelerate knowledge sharing. The power of Twitter goes beyond the information that flows through it, or the fact that it serves as an effective channel for “breaking news.” Twitter’s power lies in the fact that it helps broker social connections. As John Hagel, the renowned business and technology strategist, points out: In times of rapid change the type of knowledge that is valuable shifts from explicit (what can be contained in a document) to tacit (what is contained in a person). The promise of knowledge management lies in connecting people with other people, not with documents. Real-time communication flows will play an increasing role in making sure the questions find the right person (as opposed to the right document) and that we are in a continual state of connectivity.

Real-time testing feedback loops also put a premium on building a learning organization. Winners, on the Web and off, will be dynamically testing and improving closer to real time. Another way to think about this is to consider how Google would run your business–where every user action is used to provide a better service to the next customer. Considering the actions of your users as implicit feedback to continually refine your service is the heart of Web 2.0. It is also the future of being competitive in business.

With the rise of real time we are moving from lagging indicators (customer surveys, focus groups, long product cycles) to leading indicators (online analytics, real-time optimization, lean start-up methods for business). The lag time between question-and-answer and between customer response and company reaction is the arbitrage opportunity for many businesses today.

If the ’90s metaphor for the Internet was “the brain”–a giant, storage and processing system for all the world’s information–the new metaphor is the Social Nervous System, where all of this information is bound up with ubiquitous, real-time communications and used to direct activity in the world. In the Social Nervous System, the boundaries between online and offline become extremely blurry.

We are just scraping the surface of a real-time revolution–but make no mistake, it is a big deal. That is breaking news.

I was fortunate enough to get a chance to sit down with John Hagel at last week’s Web 2.0 Summit and discuss a few big-ticket emerging trends: (1) the rise of the “real time” web, (2) the move from the information web (the web of documents) to the social web (the web of people) and (3) the continued promise of mobile devices.

John is the co-chair of Deloitte’s Center for Edge Innovation, has written,  numerous, influential books and is the co-author of the must-read blog, The Big Shift so I wanted him to analyze these trends from the lens of their potential impact on large organizations.

This first video discusses the rise of the real-time web which I am loosely defining as the convergence of three phenomena:

• Near zero latency communication protocols best embodied by something like Twitter but well described by Anil Dash as “The Pushbutton Web”
• Pervasive connectivity – our PCs are always on – able to send and receive up-to-the-minute with no barriers to “getting” online.
• Mobile access – Ubiquitous access to the web from mobile devices to view or create content wherever you are.

The effects of moving to the real time web are broad and deep.  Like the Internet itself there isn’t a single, totalizing meta-narrative to make sense of it.  John takes a slice of the real-time analysis and lays down an  argument that goes something like this:

A. The Internet as a global communications and computation platform has accelerated the rate of change for the enterprise –  faster product cycle times being one example

B. This accelerated rate of change depreciates the value of explicit knowledge (what I know – which can be summarized in documents, policies, procedures, workflow etc.) and privileges tacit knowledge (know how – the  “knowledge that is difficult to be transferred to another person by means of writing down or verbalizing”)

C. In this environment, the source of value for the enterprise is moving from what John calls, “stocks of knowledge” (what we know at any given point in time) toward flows of knowledge (what we know at this current moment in time).  Real-time “flows” of knowledge help an enterprise move at the pace of change but more importantly – they connect you to people – think about social CRM and being able to immediately recognize when you have customer issues (as opposed to surveys with huge lag times) and respond in the moment.   Real time flows provide real time feedback to assess effectiveness and recalibrate response.

John also talks about the “dark secret of the enterprise” – but you have to watch the video to get that insight.

Today Ken Majer – change-agent and leadership guru to many large corporations -  asked for my opinion on why Twitter was receiving so much attention – how much of it is well deserved, how much PR hype.   While the new media aspect of what is happening in Iran has been well covered and I generally avoid current events, I thougt I would share my response here.

The chatter about Twitter is well deserved and a core example of what I have been calling The Social Nervous System - a system that uses Internet communication technology to coordinate events in the real world.   Twitter is a decentralized messaging system with an incredibly low barrier to entry in terms of ease of use and single-purpose functionality…  Each of these factors help explain its  rapid growth as a tool for socializing and answering its default question “What are you Doing?”   Twitter reached its watershed moment during the Mumbai attacks last November when the answer to  “what are you doing” became urgent and important news.    it was used as a real-time news service and was running 10 minutes ahead of CNN….    Its utility as real time news during a breaking situation is what is driving the press now… not PR.   Iranians on both sides have been using it to push information out… Since it is decentralized you are not dealing with the leadership of these factions but actual citizens engaged in struggle….   That direct, emotional, on-the-ground connection in combination with the real-time nature of the story as it unfolds is truly compelling.

Let me break down these elements individually.

Twitter is Single Purpose - Twitter only really tries to do one thing – a simple, character-constrained messaging service.   It asks one question, “what are you doing?”  It provides you one window in which to enter your text and one button to publish.   This single purpose design creates two critical side effects:  1. It lowers the barrier to entry and is incredibly easy to use. 2. it creates myriad opportunities for others to build on top of (see Platforms beat Applications) – Currently I believe there are over 2000 services that help you manage your Twitter presence.  For example,  I use Tweetdeck to aggregate and publish Tweets,  bitly as my URL shortener, MrTweet to find people I might be interested in and Twitterific as my iPhone client.    A radically simple tool for socializing explains how Twitter got liftoff – but not why it is being used in situations like Iran….For that you need to consider that…

Twitter is Decentralized – Anyone can create a Twitter account.  Tweets can be authored, published or consumed easily  from laptops or mobile devices.  Twitter is a radically democratic medium allowing anyone, anywhere to connect.

Twitter is Direct - When you search on Twitter, or follow – you are hearing directly from a human being.  There is no PR layer (usually).  In Iran this means that you are hearing directly from people in the street.  This direct, human connection is powerful.

Twitter is Real Time - Twitter runs in real time.  When you search Twitter it is all about now.   The enforced brevity of 140 characters further accelerates the speed of communication.  These are dispatches with a lag time of seconds – not even hours.

Twitter Allows Asymmetric relationships (or Twitter Works Like a Populist News Service) : Unlike Facebook – you can follow anyone you like (unless they have protected their profile – which very few ppl do).  This means that Twitter can replicate the way influence works in society  — meaning, human attention can be directed to whatever person “earns” that attention.  That attention doesn’t “cost” the influencer anything because Twitter is asymmetric — you can follow me — I don’t need to follow you if I do not choose to.  I don’t even need to know who you are….  In this regard it is more like a broadcast tool.    This asymmetric property also accelerates the diffusion of information since there is much more cross-pollination of followers/followed than in a more symmetric model like Facebook where both parties must agree to be friends…. All of this to say – Twitter is structured to be function better as a new service than other social technologies.

Twitter is now part of  the revolutionary’s toolkit just as Mumbai made it  a part of the emergency response toolkit.  What happens next is anyone’s guess.

No corner of modern American life is untouched by technology. And no technology is more transformative than the Internet. The simple reason for this is that the Internet is, at bottom, a communications network, and communication is the foundation of society, business and government. When you scale up communications, you change the world.

There are now at least 1.6 billions of us connected via computer and 3 billion mobile devices that touch the Internet. The rise of “social” technologies–such as wikis, blogs, Twitter, SMS and social networks–means that the barriers to participation across the planet (in terms of the cost, access and skills required) are rapidly approaching zero.

As ever more people get connected, we see an acceleration in the way the Internet is used to coordinate action and render services from human input. We are witnessing the rise of a social nervous system. Consider these three cases:

Emergency Response
The Mumbai attacks showcased the use of Twitter as a real-time, peer-to-peer information service. Throughout the event, people twittered the movement of the attackers. The police were on the service admonishing people not to disclose their own movements. Though there was criticism of whether or not the details were accurate (the BBC was criticized for integrating Twitter into its reporting), the larger point is that this real-time communication system influenced the physical behavior on the ground in Mumbai. This is a key point about the social nervous system: It coordinates (and sometimes directs) physical activity in the world.

Coordinating Political Action
The Obama campaign’s Houdini project on election day used real-time data from polling stations to adjust its “get out the vote” program. As one participant noted, poll observers “took the real-time results of who actually showed up at the polls and fed it back to the campaign so that they could adjust their GOTV calls and canvassing as the day wore on. Every time someone came in to vote, their names were entered into a computer system, and their names disappeared or escaped, Houdini-like, from the call and walk lists.”

Global Virus Forecasting
As millions of users search for health information, Google (nasdaq: GOOG – news – people ) uses the aggregate of these searches to estimate flu activity even in very localized regions. This information has been shown to estimate flu activity two weeks earlier (a life-age for influenza) than the CDC forecast methods.

Watch the news, and you will see daily evidence of how a system that connects billions of people is influencing the physical world–from recent protests in California against Proposition 8 organized by Facebook to the riots in my hometown of Oakland after several witnesses uploaded video taken from their mobile phones of a police shooting. New services such as Qik are now bringing live mobile camera feeds online (think Webcams for mobile phones). That will make what happened in Oakland a small foretaste of what is likely to come. I used Twitter during the Oakland riot to stay updated on local transit outages and plot a new route home from work.

It is easy to confuse this concept with the emerging field of machine learning such as the smart energy grid, traffic control using the sensor Web or the Planetary Skin Initiative recently announced by Nasa and Cisco (nasdaq: CSCO – news – people ). Machine optimization is useful but hardly social: Human beings do not contribute the data, share it or act upon it. And the implications of a social nervous system are far more profound than simply a “smart” grid.

The social nervous system makes us aware of a broader context of relationship with humanity. My immediate relationships–with my family, my city and state–begin to span the globe. We can leverage the ubiquity of communications to coordinate real world activity–and just about anyone can do it. Even a kid with a mobile phone can capture a revolution.

Using a social nervous system, we are finding solutions to some big problems such as controlling disease or responding to emergencies. Most important, we are creating a feedback mechanism that exposes the actions of a powerful few to the many–and the trivial day-to-day life of the many to the whole of humanity.

It is no coincidence that “transparency” is a catch phrase in government and business these days. It is a natural byproduct of this emerging social nervous system. The social nervous system engenders a healthier balance of power in society and helps to connect our individual actions into a larger context in a clear way.

Another outcome of the social nervous system is that we see the shift away from privacy as an inalienable right to an individual responsibility. In a social nervous system there will be increasing pressure to be connected 24/7 to the hive mind that is Facebook, Twitter and so on. Those who do not connect, share and collaborate will have a hard time in business and in social life.

Older generations expect that digital natives will one day wish to erase all their indiscreet photos online. But I don’t believe this nonstop exposure will go away as the digital natives mature. Our lives are increasingly being logged on the Internet. It is part of the trade. Given the complexity and precarious position of the modern world, getting people to genuinely reach out and touch their neighbors is a good thing but it will come at the price of reshaping our identities as part of a larger, interconnected whole.