Associate Editor Stan Schroeder over at Mashable today brought up an interesting issue that’s rearing it’s ugly head more and more on today’s internet: fragmentation. Stan lives in Europe, and thus is better equipped to talk about this issue than most folks.

The issue arose when popular video purveyor Veoh made the decision public to no longer support streaming their video to many global Internet surfers due to the fact that they have a hard time monetizing their traffic.  Stan pontificates on the topic:

Video sharing site Veoh had recently blocked its service from users in Africa, Asia, Latin America and Eastern Europe. Being in Croatia, I tried to watch a video there, and received the following message:

“Veoh is no longer available in CROATIA. If you are not in CROATIA or think you have received this message in error, please go to veoh.com and report the issue.“

From my point of view, this seems cruel. However, if Veoh simply cannot sustain delivering video to certain areas of the world; if the choice is between shutting the service down altogether or shutting it down in these areas only, I can understand their decision. Can we blame them?

Should they be allowed to do this? Given that the Internet is somewhat of an anarchic entity and that Veoh is a private organization, cries of censorship don’t apply, and they should be allowed to run their business as they see fit.

Market forces apply, and time will tell if this is a smart business decision or not. More importantly, though, it leads us to what might even be termed a purely semantic debate: can you call them an Internet service if they’re only serving certain geographic areas?  After a certain amount of geo-retarding, you really can’t call it an Internet company anymore – they’re simply piggybacking off Internet infrastructure to create a regional service… in essence, they’re creating a virtual WAN.

Creating WAN services is admittedly antithetical to the ethos of the Internet, and our gut reaction is to reach out and punish these companies and force them to call themselves something different, but it’s hard to deny that the essence of success on the Web is niche, and what is more niche than identifying certain sects of people to serve as a company (in this case, sects of people defined by geographic location)?

Here’s the question that Stan is really asking in his article: “Will the Internet be better served by companies that allow access by geographic location or will it be a ‘worse place than it is today?’”

I think that, if we’re honest with ourselves and it’s truly an issue, this behavior by organizations like Veoh will only serve to destroy the silos as they exist today. Before we had centralized locations like YouTube and Veoh to distribute our video, we had podcast feeds and embedded client side players.  Technology has evolved, and now these locations serve as a way to better monetize videos for indie producers as well as easily distribute and garner a community from them worldwide.

If they cease to perform their primary function as global distribution points, their ability to monetize won’t help them much.  You can’t throw a rock on the Internet now without hitting an ad network. It’s possible for anyone to monetize their video if they can garner a community (something you no longer need a video distribution portal for).

For roughly $10 a month or less, you can pay for worldwide distribution of your videos, and there are more than a dozen easy ways to build a community for nothing more than the cost of your time.

The bottom line – major silos of service pursuing geocentric purposes might, in fact, be a good thing for the Internet.  In 10 years, I have no doubt that software will have developed to the point that every last user will be able to integrate both the global community and global distribution capability into their own online presence, rather than relying on a third party walled garden to do it for them.