The Trouble with Web 2.0

December 23, 2006

Once upon a time, publishing webpages was solely the domain of a relatively select few. Those who had the ability to code in HTML, who knew how to use FTP to upload files and who had access to space on a webserver connected to the Internet. A decade ago, GeoCities was one of the first sites to offer free webspace for the general public to post their own pages. Many, many bad pages were produced, mainly because you still needed technical skills and ultimately, it was a sea of static pages providing one-way communication. And just because you had technical skills, it didn’t mean you also had writing and layout skills.

Skip forward to late-2004 when the term Web 2.0 was first used. A new wave of dynamic and totally interactive websites was introduced and the previous travellers of the information superhighway could all suddenly become consultants to and constructors of it. Wikipedia introduced the concept of a free on-line encyclopedia with hundreds of thousands of contributors and reviewers. MySpace offers social networking with an interactive, user-submitted network of friends, personal profiles, blogs, photos, music, videos and groups. Sites like del.icio.us are a social bookmarking phenomenon and have the power to direct large numbers of visitors to websites through a quick and simple recommendation system. Sites and services like these are increasing the generation of content on the web exponentially, simply by giving everyone the ability to easily contribute.

The trouble with Web 2.0 is that many new contributors have little consideration of laws and ethics and the governance of many nations has no comprehension of the implications of Web 2.0. For example, a few years ago, the band Metallica came down very heavily on peer-to-peer sharing networks like Napster for illegal distribution of their music. In the scheme of things, Napster users were a drop in the bucket compared to YouTube. This free site contains videos contributed by anyone and viewable by everyone, and many of Metallica’s video clips and live performances are neatly catalogued. While their Terms of Use specifically state that the uploading of copyrighted material is not permitted, the worse thing that will happen is the video will be removed as soon as it’s identified. Problem is, with 65,000 videos being posted each day, finding them all is not a simple task. So YouTube is presently a minefield of copyrighted videos – but even that didn’t stop Google from paying US$1.65B to acquire the company. Worse still, it’s a place where kids can post their pranks, shot with their mobile phone cameras. You like to destroy displays in a supermarket? Get your mates to video it, post it on YouTube and you’ve not only got a worldwide audience, but a host of mimickers to idolize and emulate your feats across the globe. Sadly, there are also videos of school playground bashings and fights.

Social networking sites like MySpace and Bebo are aimed directly at younger people and often at children. While it’s great that children can express themselves and have a voice in front of a wide audience, it’s the more mature concepts of privacy, decency and respect that are often lacking in their posts. Further, it’s the legal concepts of copyright infringement, defamation and incitement that are easy to forget in the world of Web 2.0. Why is it possible to so easily and publicly identify, defame and slander a man on a site like Don’t Date Him Girl! without any evidence to back it up? Why can students edit Wikipedia and Bebo entries about their school to include disparaging comments about teachers and other students?

The most common way that schools around the world are managing this problem is by filtering (blocking) access to many Web 2.0 sites at school. OK, that keeps the problem out of the school (assuming the children haven’t worked out how to circumvent the filters), but it does nothing to stop the problem at home. Laws are also ill-equipped to manage the problems of Web 2.0. What if the poster is a minor? What if the service is hosted in another country? What lesson will be learnt if the only repercussions are that the offending post will be removed – sometime after it has been found and reported?

So what’s needed? I think governments, schools and parents need to be more open-minded about the social-networking phenomenon for a start. We need to stop managing the posts and start managing the people who post. We need to update the age-old difference between right and wrong to mould it into a Web 2.0 environment. It’s not about exclusion, it’s about teaching respect and consideration and responsible self-publishing. It’s about teaching people to think critically in all aspects of life and it all needs to be backed up with appropriate, enforceable guidelines and laws.

Finally, yes, I accept the irony of writing about the Problems of Web 2.0 by using a Web 2.0 application. ) And there’s always the problem of what people might add to the comments section! ;)


The Habits of Highly Effective Web 2.0 Sites

December 2, 2006

The next Web 2.0 Conference will be upon us in early November and things are busier than ever in the Web 2.0 world.  Along the way, I’ve managed to miss the one year anniversary of this blog, which I began back in late September of last year.  There have been over 2.5 million direct hits on this site since inception, a large percentage of it due to my Web 2.0 lists such as last year’s Best Web 2.0 Software List , but I also get e-mail frequently from die-hard readers as well.  Most importantly however, from all my conversations with people all over the world, it’s clear that Web 2.0 remains more than ever a topic of major popular interest and industry fascination.

While the general understanding of Web 2.0 is improving all the time, we have a ways to go before we have a concise, generally accepted definition.  My favorite is still networked applications that explicitly leverage network effects. But while most of what we ascribe to the Web 2.0 name falls out of these definition, it’s fairly hard for most of us to extrapolate meaningful ramifications from this.

People that read this blog know that I’m in the camp of folks that try to look beyond Ajax and the visual site design aspect of Web 2.0, and try to capture the deeper design patterns and business models that seem to be powering the most successful Web sites and online companies today.  Though concepts such as harnessing collective intelligence and Data as the Next Intel Inside, as described by Tim O’Reilly , most directly capture the spirit of the Web 2.0 era, it does seem to me that there are a few other elements that we haven’t nailed down yet.

At the AjaxWorld Conference and Expo earlier this month, I gave my usual talk about how to formally leverage Web 2.0, with plenty of examples coming from things happening out on the Web.  If you accept that it’s the power and size of the Web today , particularly the number of highly interactive network nodes (who are mostly people), give them extremely low-barrier tools, and we should be able to find plenty examples of emergent behavior; significant events happening suddenly and unexpectedly.  Tipping points are getting easier and easier to reach as site designers learn how to create better network effect triggers, draw large audiences suddenly, and as those same audiences increasingly self-organize spontaneously, such as in the KatrinaList project (suddenly) or Wikipedia (slower but bigger).

And it’s the arrival of Web 2.0 “supersites” like YouTube , which appear suddenly, often riding the coattails of other major Web 2.0 site’s ecosystems, and apply aggressive, viral network effects that show us the true, full scale of the possibilities.  Building a Web site worth over one billion dollars in 18 months is a very impressive result, but it’s really only a single axis upon which Web 2.0 can be applied successfully.  Another axis upon which to apply Web 2.0 focuses less on pulling in every single user possible with a horizontal network effect, but on building a difficult to reproduce but highly valuable data source, such as the Navteq mapping database, or Zillow’s real estate database.  One might argue that these are still very horizontal but these are merely just well known examples.

The variety and depth of the Web is such that not every Web 2.0 site will have tens of millions of users, nor should it.  An effective Web 2.0 site is largely powered by its users, whose feedback and contributions, direct and indirect, make the site a living ecosystem that evolves from day to day, a mosaic as rich and varied as a sites users would like it to be.  In other words, creating a high quality architectures of participation is becoming a strategic competitive advantage in many areas.

I’m often asked, particularly after one of my presentations on Web 2.0, to articulate the most important and effective actions a site designer can take to realize the benefits of Web 2.0.  As a result, I’ve created the list below in a attempt to catpure a good, general purpose overview of what these steps are.  My plan in the near future, is to dive into each one of these as much as time permits and explain how they make highly effective Web 2.0 sites not only effective, but often possible at all.  In the meantime, please take them for what they’re worth, I believe however that they are instrumental in making a Web site or application the most successful possible.

The Essentials of Leveraging Web 2.0

  • Ease of Use is the most important feature of any Web site, Web application, or program.
  • Open up your data as much possible. There is no future in hoarding data, only controlling it.
  • Aggressively add feedback loops to everything.  Pull out the loops that don’t seem to matter and emphasize the ones that give results.
  • Continuous release cycles.  The bigger the release, the more unwieldy it becomes (more dependencies, more planning, more disruption.)  Organic growth is the most powerful, adaptive, and resilient.
  • Make your users part of your software.  They are your most valuable source of content, feedback, and passion.  Start understanding social architecture.  Give up non-essential control.  Or your users will likely go elsewhere.
  • Turn your applications into platforms. An application usually has a single predetermined use while a platform is designed to be the foundation of something much bigger.  Instead of getting a single type of use from your software and data, you might get hundreds or even thousands of additional uses.
  • Don’t create social communities just to have them. They aren’t a checklist item.  But do empower inspired users to create them.

Of course, there a lot of work in the details and these are just some of the important, general essentials.  Unfortunately, a lot of careful thinking, planning, and engineering goes into any effective Web 2.0 site and it’s having these ideas at the core of it, which can help you get the best results.

Final Note:  I’ll be on the road the next two weeks and will be at the Web 2.0 Conference in San Francisco from Nov. 7th-9th.  I’ll be there writing coverage for the Web 2.0 Journal and here as much as possible.  If you’re going to be there, please drop me a line if you’d like to meet.


Million Dollar Homepage Becomes Multi-Million Dollar Homepage

December 2, 2006

Alex Tew, the mastermind behind The Million Dollar Homepage is most certainly pressing his luck. Tew sold one million pixels worth of advertisement for $1 per pixel and made $1 million. It worked so well that he thinks he can do it again, this time for twice the price.Tew is reportedly on the verge of launching a second site called Pixelotto. Instead of selling each pixel for $1, he plans to sell each pixel for $2, plus hold some kind of lottery where the winner who clicks the right advertisement will win $1 million.

I will gladly eat my words if Tew can pull this off but I just don’t think that lightning strikes twice. It was a good idea…once! Second time around, it’s not, as Michael Arrington calls it, “another stupid, brilliant idea.” It’s just a stupid idea.


Yahoo! TV Gets A New Do

December 1, 2006

Yahoo! redesigned their TV listing
site
this week. Certain bloggers have expressed their displeasure with the makeover. I think it looks good but certainly could be more functional.Most Yahoo! pages are getting Flash-ier so it was time for the TV listing page to go under the knife. Some complaints have been that the Ajax interface slows it down but that wasn’t my experience.

The problem is not the “cool” new color scheme. The problem is the design placement. The most pertinent information is not close enough to the top. I have to scroll down too far from the Scrubs, Ugly Betty, and Grey’s Anatomy promos before I get to the “My TV” grid, which is the reason I would go to this site in the first place. They’ve also placed “TV News,” “Juicy Gossip,” and “Latest Recaps” before the actual listings. I’ll go to the PerezHilton blog if I want that crap.

I don’t think this is another example of Yahoo! spreading its peanut butter. I think this is Yahoo! giving itself the makeover it needs but maybe trying to hard to be cool. Function before fashion, Yahoo! Learn from Meevee.


Marketing Your Business with a Blog

December 1, 2006

Brian Brown on Work.com provides a guide on how to use blogging as an effective way of marketing your business and staying in touch with your customers. The transparent nature of blogging allows you to connect, communicate and inform your current and potential customers in a way you just can’t through glossy brochures and slick corporate web sites. A blog can be a very nice compliment to your current marketing mix and costs virtually nothing to start up – just a change in a mindset from trying to be the keeper and protector of information to the sharer of it.

read more


Is Your PR Only Bringing You 15 Minutes of Fame?

December 1, 2006

Mark Stevens, best-selling author of “Your Marketing Sucks” (one of my favorite books) wrote a post on his blog about how your public relations efforts can turn out to be a huge disappointment when not aligned with your sales goals. After all the anticipation, all you get is 15 minutes of fame and nothing to show for it. Your photo showing up in the paper may seem great at first, but if the coverage doesn’t drive action, it’s nothing more than just your photo showing up in the paper. Today, businesses and PR firms staying on top of today’s technology (and in-tune with today’s reading habits) are leveraging news SEO, channel sites, and bloggers to push out their message to intended viewers. According to Pew Research Center, the audience for online news has jumped from 2% to 31% of Americans and the audience for nightly network news slipped from 42% to 28%. 75% of journalists search the internet for previous stories on their subject.


Profitably Running an Online Business in the Web 2.0 Era

December 1, 2006

One of the things I’m doing this week is preparing for a presentation at Web Builder 2.0 on how to monetize mashups in Las Vegas next week.  Consequently, I’ve been pulling together notes, talking to mashup creators, and studying real-world examples of how companies are applying innovative ways of generating revenue with Web 2.0 applications and open APIs.  Though there are all sorts of interesting emerging stories, such as the new Second Life millionaire, product developers are increasingly trying to explore the options beyond the obvious: namely big value acquisitions ala YouTube or the often fickle, if mostly workable, online advertising route.   But the biggest question that comes up is that if you let your users generate most of your content and then expose it all up via an API, how can a profitable business be made from this?

 

This has been the question from the outset, and though you can build enormously successful sites in terms of numbers of users and amounts of content using Web 2.0 techniques, the best means of monetizing this remain a larger unproven endeavor.  I wrote a while back on the struggle to monetize Web 2.0 where I explored in detail the strategic and tactical methods for making next generation Web sites financially viable, even successful.

If you refer to my original article on monetizing Web 2.0, I identified three tactical means for generating revenue (advertising, subscriptions, and commissions) and a series of strategies that can support them.  While it’s usually fairly clear how the direct revenue models work, it’s usually less clear to people how the indirect strategies can directly influence the opportunities.

Strategies for Making the Most from Web 2.0 

    • There are direct (the 3 items above) and numerous indirect ways to monetize Web 2.0 that often go unappreciated
    • Some of the indirect ways which lead to revenue growth, user growth, and increased resistance to competition — which in turn lead to increased subscriptions, advertising, and commission revenue — are:
      • Strategic Acquisition: Identifying and acquiring Web 2.0 companies on the exponential growth curve before the rest of the market realizes what it’s worth (early exploitation of someone else’s network effects.)
      • Maintaining control of hard to recreate data sources.  This is basically turning walled gardens into fenced gardens:  Let users access everything, but not let them keep it, such as Google providing access to their search index only over the Web.
      • Building Attention Trust – By being patently fair with customer data and leveraging user’s loyalty, you can get them to share more information about themselves that in turns leads to much better products and services tailored to them.
      • Turning Applications into Platforms: One single use of an application is simply a waste of software.  Turn applications into platforms and get 5, 50, or 5,000 additional uses (Amazon has over 50,000 users of its line of business APIs) for example.  Online platforms are actually very easy to monetize but having compelling content or services first is a prerequisite.
      • Fully Automated Online Customer Self-Service: Let users get what they want, when they want it, without help.  Seems easy but almost all companies have people in the loop to manage the edge-cases.  Unfortunately, edge cases represent the The Long Tail of customer service.  This is hard but in the end provides goods and services with much tighter feedback loops.  And it’s also a mandatory prerequisite for cost effectively serving mass micromarkets.  In other words, you can’t directly monetize The Long Tail without this.

Lying directly in the primary tenets of Web 2.0 however, are a series of two-edged issues from a revenue perspective.  Though the concepts and ideas are powerful when applied appropriately, they can also pose significant short-term and long-term challenges.  Below are the basic principles of Web 2.0 along with the positive and negative revenue implications for most companies on the Web today, even ones that aren’t fully embracing it yet.

 Revenue Implications for Web 2.0 Principles (not meant to be exhaustive)

  • Principle 1: Web as Platform
    • Upside:  Revenue scalability (1 billion users on the Web), rapid growth potential and reach through exploitation of network effects
    • Downside: Competition is only a URL away, often requiring significant investment in differentiation
  • Principle 2: Software Above a Single Device
    • Upside: More opportunities to deliver products and services to users in more situations
    • Downside: Upfront costs, more infrastructure, more development/testing/support (costs) to deliver products across multiple devices
  • Principle 3: Data is the Next “Intel Inside”
    • Upside: Customer loyalty and even lock-in
    • Downside:  Lack of competitive pressure leading to complacency, long-term potential antitrust issues
  • Principle 4: Lightweight Programming & Business Models
  • Principle 5: Rich User Experiences
    • Upside: More productive and satisfied users, competitive advantage
    • Downside: Higher cost of development, potentially lower new user discoverability and adoption
  • Principle 6: Harnessing Collective Intelligence
    • Upside: Much lower costs of production, higher rate of innovation, dramatically larger overall content output
    • Downside Implications: Lower level of control, governance issues (increased dependance on user base), content management issues, and legal exposure over IP\n
  • Principle 7: Leverage the Long Tail\n
    • Upside Implications: Cost-effectively reach thousands of small, previously unprofitable market segments resulting in overall customer growth
    • \nDownside Implications: Upfront investment costs can be very significant, managing costs of customer service long-term

I hope that helps. I\’m barely on track for 4pm, but let\’s talk anyway and review the latest…\n
\n\n”,0] ); D([“ce”]); //–>: Much lower costs of production, higher rate of innovation, dramatically larger overall content output

  • Downside: Lower level of direct control, governance issues (increased dependence on user base), content management issues, and legal exposure over IP
  • Principle 7: Leveraging The Long Tail
    • Upside: Cost-effectively reach thousands of small, previously unprofitable market segments resulting in overall customer growth
    • Downside: Upfront investment costs can be very significant, managing costs of customer service long-term
  • While a great many startups are not generating revenue in huge quantities yet, the companies that have been diligently exploiting open APIs such as Amazon and Salesforce are in fact generating significant revenue and second order effects from opening up their platforms and being careful not to lose control.  This is actually a large discussion, and as large Web 2.0 sites continue to emerge, we’ll continue to keep track of what the successful patterns and practices are.

    What other implications are there by putting users in control of content generation and opening everything up?