Digital Dark Matter

Abstract

Economists need a label for some important building blocks of the digital economy that we do not measure using standard tools. Many indirect symptoms indicate their growth and importance. Many labels have been proposed-invisible infrastructure and private provision of public goods. Most digital dark matter does not show up in GDP because it is not part of a pecuniary transaction-namely, any trade denominated in currency. Consider two rather visible examples, Linux and Apache. These save on the expense that would have otherwise gone to a software license. There are tens of millions of copies of Apache in use and it substitutes for software with a serious price tag. Same goes for Linux. The unseen savings in licensing fees exceeds tens of billions of dollars.Wikipedia is also another visible piece of digital dark matter. US house holds spend more than half of 1 percent of their time online at Wikipedia. The site produces nothing pecuniary owing to its ban on advertising. Yet, it is clearly preferred by many readers, at least judging by the declines in both MSN's Encarta and traditional encyclopedias.