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Web 2.0 - what's the business case?

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Subject:  Web 2.0 - what's the business case? Ashley Friedlein - Favourite
Author:   Ashley :   view profile | all posts by this author | add to favourites
Date:   12:22:11 9 February 2006
 
[Note: if you're new to 'Web 2.0' then read Tim O'Reilly's 'What is Web 2.0' article]

Despite my reservations about the hype surrounding Web 2.0 I thought I really ought to find out a bit more, so yesterday I went to Carson Workshops's 1 day event, The Future of Web Apps.

There was a great speaker line up with all the big names in Web 2.0 - Flickr, Delicious, 37 Signals, DropSend, Mint, Google Maps.

They'd also managed to fill 800 seats - almostly exclusively with blokes blogging on laptops as far as I could see. 

There's certainly some "cool stuff" going on but I was going to see if I could start to understand the business / marketing / commercial implications of "Web 2.0". 

I still don't quite have the answer - the companies talking Web 2.0 at the moment have been built from the ground up as such. I'm after "before and after" case studies where applying Web 2.0 thinking and technologies has demonstrated commercial gain - know of any?

Here are a few thoughts on Web 2.0 from a commercial point of view...

1. Can it save you money? 
Yes, it probably can. If you can (re)use applications, data and services that already exist then that should save you time and money. Pick 'n mix and create your own web platform/service. 

BUT... the barriers to entry, and costs, are lowered for everyone, not just you. So that means more competition, less competitive advantage. And, do you really want to risk your business based upon a collection of web services where you quite possibly have no SLA, no contract, no guarantee that they'll be around next week?

2. Can it make you money?
Yes. For new businesses / start ups there appear to be 3 broad options:
1. Build a huge user base and get bought by Yahoo! (Flickr style...)
2. Build a niche service / application that solves a particular problem and use the web's reach to sell it at a comparatively low price (Basecamp style...)
3. Build a great API and licence it to other businesses (Mint style...)

But what about established companies and brands?

Yes-ish? The argument is that an improved user experience or service will increase conversion rates, customer retention etc.

BUT... things like AJAX and other Web 2.0 technologies really aren't that easy to do and to get to work across all browsers and devices. By all accounts, it's actually pretty damn hard. Which means time-consuming and expensive I guess? The whole issues of Accessibility was also neatly side-stepped - I think WEB 2.0 can be accessible, but it's really not easy. 

3. Can it help your online marketing?
Yes, in as much as you can distribute, feed, mash and generally push and pull content, applications and services all around the web. Most the companies speaking emphasis the fact that they have spend nothing on marketing and that it has all come about through viral awareness and being embedded in and around the web, with a resulting 'network effect' doing all the marketing work for them.

BUT... are those days already almost over? How many feeds can one man eat in a day? Even the founder of del.icio.us admitted that RSS used to be a big deal a couple of years ago and now "I'm not so sure...". And there's us thinking that RSS was supposed to herald the death of e-mail? 

>> What about the "social software / collaborative / sharing" benefits of Web 2.0? Surely they will help you market your products or services "better, faster, cheaper"?

BUT... benefiting from the network effect requires critical mass. A lot of it. If you can be like eBay and absolutely dominate your space then you're sorted, no doubt. If not, you risk just fading away as an 'also ran'.  

>> What about the Web 2.0 notion of 'Clean URLs' - URLs that are absolute and permanent identifiers, which are semantically meaningful to the user rather than exposing the technology underneatch. i.e using a URL like http://www.e-consultancy.com/jobs/ rather than something like http://www.e-consultancy.com/content_id?=123&session_id=blahblahblah

BUT... I thought this was old news? We did that years ago (URL rewriting) only then it was about search engine optimisation - and still is for many.


So, here's what I'm after - 'before and after' case study example of where established sites / companies have used Web 2.0 technologies and thinking and can show commercial benefit as a result. Or rather, ones who are actually happy to talk about it / share the results...

Know of any?

Ashley Friedlein
CEO, E-consultancy.com






 
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  • Web 2.0 - what's the business case?, Ashley , 9 Feb 12:22
    [Note: if you're new to 'Web 2.0' then read (http://www.oreillynet.com/lpt/a/6228) Tim O'Reilly's 'What is Web 2.0' article] Despite my reservations about the (http://www.e-cons ...
    • Web 2.0 - what's the business case?, jbovard, 9 Feb 18:03
      Investment leading technology or technology leading investment? Web 2.0 seems to be the second one does it not? I think there is a case for this technology. But the point I ...
    • Web 2.0 - what's the business case?, ianjindal, 10 Feb 00:19
      Nice post.  You focus though upon the front-end and consumer-visible aspects of W2 - the 'behind the scenes' and mindset requirements are of equal import, imho. While I don't pr ...
      • RE: Web 2.0 - what's the business case?, Ashley , 10 Feb 09:43
        Hi Ian Some very good points there. I certainly think it is a refreshing and exciting way of thinking.  One question which *keeps* coming up from existing large organisations ...
        • RE: Web 2.0 - what's the business case?, textor, 10 Feb 14:50
          Whatever W2 is (W2 > W3 ? odd) I don't think it is about project management.  During the dot com bubble there was a lot of talk about breaking the mould on project management and p ...
        • RE: Web 2.0 - what's the business case?, ianjindal, 14 Feb 17:50
          Hm - two areas here: cross-team PM and what can be done in the 'pure online' domain using W2. In the first instance there's no escaping the fact that cross-silo working is neces ...
          • RE: Web 2.0 - what's the business case?, textor, 15 Feb 08:30
            This is such an important point. We got very excited about Ajax and scanned our existing web systems to see if you could sell our clients extra development based on Ajax.  Howev ...
    • Web 2.0 - what's the business case?, dcjarvis, 10 Feb 12:31
      Ashley We've had a brief look at using AJAX type interactivity. While the user experience benefits were potentially there (qualitatively speaking), the bigger (negative) impa ...
      • Web 2.0 - what's the business case?, nickharrison, 14 Feb 02:52
        From my point of view, web 2.0 is a 'mashup' (forgive yet another buzzword). It a collection of things: - simple sets of data/information - Meta data (information about infor ...
    • Web 2.0 - what's the business case?, SteveJ, 14 Feb 21:21
      I may be way off the mark here but I think  Web 2.0 is simply a media invention to describe how technology is being used differently to how it was a few years ago. Blogs  are de ...
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