The Death Of “Web 2.0″ Is Greatly Exaggerated

January 6th, 2009 by Nick Gonzalez

With the downturn in the economy and VCs tightening their purse strings, it’s been easy to declare an end to “web 2.0″. But to do so is to write off a great deal of the innovation that has taken place over the past four years. While I’ve never been a fan of the term “Web 2.0″, the core principles of O’Reilly’s original definition of “web 2.0″ are still surprisingly sound.

* Services, not packaged software, with cost-effective scalability
* Control over unique, hard-to-recreate data sources that get richer as more people use them
* Trusting users as co-developers
* Harnessing collective intelligence
* Leveraging the long tail through customer self-service
* Software above the level of a single device
* Lightweight user interfaces, development models, AND business models

Successful web services will continue to be in part powered by users, reliant on network effects, and lightweight. Use of “web 2.0″ sites will only increase throughout 2009. Core services that host content or utility like Facebook, MySpace, Wordpress, and Twitter will continue to grow.

What we are seeing is the death of noise. The laundry list of “me-too” services will die out because founders will either get bored with a lack of growth or high infrastructure costs will eat through their remaining capital (nod towards all the social networking sites).

The last four years were typified by answering a rather simple problem: How can we improve web services through social interaction? We had social bookmarking, social photos, social video, social writing, and social shopping to name a few. First movers in each of these categories captured market share through network effects. With the hope of reproducing success, competitors followed the formula of socializing content. And there is still room for new services. Web services like Yammer and Dropbox have applied “web 2.0″ principles to business communication and file sharing.

New and successful services will focus on refining the social media model. Old sites will be updated, new sites and services will discover better social media mechanics. Improvements will include more of the following:

Easier Participation - Services will lower friction to participating within a community. The best ones will incorporate game mechanics to encourage new and continued participation.

Better Message Broadcasting - Services like Ping.fm are a sign that at least on the margin, users desire an easier way of broadcasting their messages. Marketers in particular have a need for better messaging channels into social media. A “write once, broadcast everywhere” solution would help solve this frustration.

Improved Signal to Noise - Not all content is equal. Systems are needed to determine contents’ relevance to a keyword or user.

Monetization - Too many people have lost patience for creating more effective business models for social media. Many champion Google’s now mature adwords system, but forget when revenues numbered in the hundred millions, not billions. It takes time to build the right solutions and create a marketplace around new forms of advertising.

Each of these refinements could be a startup in its own right. Furthermore, improvements in the costs of technology were supposed to make startups more independent of venture capitalists, yet media coverage is still tinted by a VC’s perspective based around big investments, large ownership stakes, and over $100 million exits.

Tags: marketing, social media, web2.0

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