How will the economic crisis affect open source?

Slashdot today has a piece suggesting that the economic crisis could be the end of open source. This argument comes from Andrew Keen author of the The Cult of the Amateur:

So how will today’s brutal economic climate change the Web 2.0 “free” economy? It will result in the rise of online media businesses that reward their contributors with cash; it will mean the success of Knol over Wikipedia, Mahalo over Google (Nasdaq: GOOG), TheAtlantic.com over the HuffingtonPost.com, iTunes over MySpace, Hulu over YouTube Inc. , Playboy.com over Voyeurweb.com, TechCrunch over the blogosphere, CNN’s professional journalism over CNN’s iReporter citizen-journalism… The hungry and cold unemployed masses aren’t going to continue giving away their intellectual labor on the Internet in the speculative hope that they might get some “back end” revenue. “Free” doesn’t fill anyone’s belly; it doesn’t warm anyone up.

Some open source providers hold a different view, including Jim Whitehurst Red Hat CEO who said in Sydney recently:

Whitehurst said that the crisis would cause companies to consolidate their technology infrastructure and reduce spending.

“So the bad news is, when things get tight, people stop investing as much in the future,” he said. “I would expect to see a slowdown in spending for new functionality.” However, the CEO said this would cause more companies to consider open-source software as an option.

“What I do know is that open source will be in much better shape, coming out of the financial crisis than going into it, relative to our propriety competitors,”

Sun Microsystems is also confident that more difficult economic circumstances will ultimately strengthen the open source industry. Open source trading platform software developer Marketcetera also sees an increasing number of opportunities for its technology.

Keen’s predictions, in any event, are absurdly extreme. Few people, I imagine, think that Google is about to hit the wall. For instance:

Let’s all synchronize our watches now so we can let out a collective gasp when Mahalo topples Google. Give me a break.

While Google’s stock price has fallen by nearly half this year, it does have a key advantage (as reported in Forbes yesterday) that will help it survive even thrive:

In fact, Google’s good news in bad times may be based in a bigger trend. Overall, online advertising spending numbers are looking sickly. According to numbers released earlier this month from the Internet Advertising Bureau, spending fell in both the first and second quarters of the year. That marks the first time that either first or second quarter spending has dropped with respect to the previous quarter since 2003.

But search advertising–the small text ads placed beside search results–show signs of relative health. Those pay-per-click ads accounted for 44% of online ad spending in the first half of 2008, up 3% from the first half of last year, while spending on banner ads stayed flat at around 21% of the total.

That’s the bigger point: Keen’s view is far too stark, the world is a more complex and nuanced place.

UPDATE: Six Apart CEO: Down Economy Boosts Blogging:

But on the flip side, a bad economy will probably lead to an overall uptick in blogging, Alden says. “When you don’t know where else to invest,” he explains, “you invest in yourself.”

Which is kind of a slick way of saying that when you get laid off or your company goes under, it’s a good time to build your personal brand by blogging. Or, for that matter, if you suddenly find yourself with a lot of time on your hands, you might blog to fill the empty spaces. “You look for a way to reassert control,” Alden points out. “That’s a reason blogging surges in down times.”
Six Apart, in fact, was founded in September 2001, just as the country was reeling from the 9/11 terrorist attacks. The company grew through the sputtering economy of the next two years. Now, seven years later, blogging has made the leap from hobby to industry.