Web 2.0 anyone?

For as long as I can remember (given my bad memory, this isn't more than a couple of years at a time), I have looked down on this new fangled notion of Web 2.0. Like all naysayers, I agreed that the 2.0 tag was nothing but a sneaky way for new web developers to distance themselves from the dot com bust. "We're doing things differently... this ain't a bubble... it's the real deal... it's not just the web, it's Web 2.0". Yeah, right! If anything, the Web 2.0 craze was nothing but a brilliant branding exercise by Tim O'Reilly! Ummm...right?

Well, it depends. Nobody can argue with success. As it stands, there's a new breed of people called Web 2.0 millionaires. People who understood the business value of allowing the internet to evolve with the power of social participation. It's actually a perfect scenario - provide a platform, let people provide the content for free, and reap benefits through an ad funded business model. Gain enough of an audience and then sell out to a big player like Microsoft or Google. Why didn't I see it before? Cause I was too caught up in the engineering mindset which assumes that people who work on anything above the network layer are chumps.

In this enlightened state of mind, I signed up for a cool new course at Haas - Marketing in Web 2.0. If nothing else, it opened my eyes to the abundance of smart ideas out there... it's all about the concept and not about the technology. Here are a few cool sites we looked at -

www.dash.com - Dynamic GPS powered by user generated traffic updates called the Dash Driver Network. The more the users, the more accurate the data. Classic example of network effects. Business model - Subscription + sales of GPS devices.
www.zazzle.com - Lets you design your own products like T shirts, mugs, etc and then adds them to the selection. Monetization strategy - profits on products sold.
www.like.com - Allows you to visually search for items by pattern, detail, shape, or pattern. Business model - probably pay per click/sale.
www.notchup.com - Get paid to interview for jobs! Monetization strategy - Charge recruiters/companies for successful hires.
www.wordclay.com - DIY Self publishing for upcoming authors. Monetization strategy - Profits on books sold.

This is, of course, in addition to the old well known names like -

www.ebay.com - Business model keywords - cut out the middleman, online auction.
del.icio.us - No viable business model. Acquired by Yahoo.
www.facebook.com - Ad funded.Provides a platform for user generated content and services.
www.twitter.com - No monetization strategy until recently. Possible strategies include in feed advertising, SMS adversiting or subscriptions. Pownce is similar to twitter and uses in stream advertising as well.

Is that all? Not a chance... there are hundreds more I can list here. But since I don't want to keep writing this blog for the rest of my life, I'll stop here.

Some of my key takeaways were:
Web 2.0 concepts change several aspects of product development and marketing -
- Faster experimentation, implementation, and testing cycles.
- Dynamic pricing
- Real time content enhanced by network effects
- New products like virtual gifts
- Better data collection and hence decisions
- Easy placement and distribution channels
- New monetization strategies like pay per click, ad funded, etc.
- Cost of service is paid by the advertisers rather than end users