Making data transportable between websites sounds like a great idea and it has lots of really smart people behind it. You’ve plugged all your friends and their details into FaceBook and you’d like to have them available on MySpace or the next super social networking site out there. With transportable data you just pluck up the database from FaceBook and pop them over. (See FT article: Social networks may find it does not pay to be too possessive.) But people are forgetting some of the lessons of doing business on the Internet.

Back in the late 1990s, dot.comers thought they could give stuff away for free and with all the traffic they’d make a fortune. Except most of them hadn’t actually figured out how to turn eyeballs into cash. They died like lemmings on their way to network effect heaven. Then everyone figured out that advertising was the secret. Yes, it’s tacky, but the business model is pretty well-settled. Develop a great site, give access and stuff away for free, generate lots of traffic, and then sell advertising. In practice, doing this is a lot harder than it sounds—YouTube took off, Google Video didn’t. Now, for this business model to work, the entrepreneurs have to have some confidence that after giving things away for free and building up traffic, the traffic isn’t just going to vanish. So everyone tries to think of ways to make people sticky.

You may think it is a pain in the butt that you can’t take your data from Facebook, but give those guys a break—maybe they are worth umpteen gazillion dollars on paper but they haven’t really made much money yet. And there are lots of other sites that are much smaller that have yet to make money. Making sites less sticky might make people better off in the short run, but it will kill a lot of the innovation that has made the web great. Maybe people will demand transportable data so much that Internet sites won’t be able to resist. But we should let the market decide how transportable data should be, and resist attempts by the government—or by Internet mobs—to force this on web businesses.