Web 2.0: A Strategy Guide Book Summary

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What is Web 2.0?

Web 2.0 is pronounced web-two-point-o used to describe the second generation of the world wide web, where it moved static HTML pages to a more interactive and dynamic web experience. Web 2.0 is focused on the ability for people to collaborate and share information online via social media, blogging and Web-based communities.

Web 2.0 signalled a change in which the world wide web became an interactive experience between users and Web publishers, rather than the one-way conversation that had previously existed. It also represents a more populist version of the Web, where new tools made it possible for nearly anyone to contribute, regardless of their technical knowledge.

Web 2.0 (also known as Participative (or Participatory) and Social Web) refers to websites that emphasize user-generated content, ease of use, participatory culture and interoperability (i.e., compatible with other products, systems, and devices) for end-users

The Multiplier Effect

Web 2.0’s network effects give Internet users unlimited ability to “do, interact, combine, remix, upload, change and customize for themselves.” The Web’s economies of scale and connectivity, and the multiplier effect – people’s efforts don’t simply combine online, they mushroom – suit businesses with innovative concepts. Online, customers provide more than money; their very presence creates value.

Google’s Combination of Network Effects

Powerful Web 2.0 network platforms such as Google, Yahoo, eBay, Skype, Wikipedia, Craigslist and Flickr define the Internet. Google dominates the “‘winner-takes-most’ paid search marketplace” according to the following phenomena:

  • “Direct Search Network Effects” – Each Google search increases Google’s relevance in a profitable “virtuous cycle.”
  • “Direct advertiser network effects” – Advertisers pay $5 to enrol and 5 cents per user click.
  • “Advertiser-searcher cross-network effects” – Advertisers seek to place their ads where most searches occur, thereby continually reinforcing Google’s top position.
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Your Web 2.0 Action Plan

Follow this “action plan” to incorporate a Web 2.0 business model in your strategies and decisions, and to recruit others to join your firm as you monetize your Web 2.0 activities:

  • “Build on collective user value” – Many successful Web 2.0 firms gather information from their users and make that data available to others for a fee. The best plan of attack is to start with a brand new project or venture, not something already underway.

For example, with nearly 130 million photos uploaded to its website by millions of users, Flickr has an enormous “user-generated image database.” The company’s value derives directly from this immense collection of public photos.

  • “Activate network effects” – Determine the inherent value of your firm’s “offline and online” network effects. Google is the ideal role model – as well as a prime cautionary tale.
  • When it comes to Internet network effects, markets normally devolve into a “winner-take-all” or “winner-take-most” model. This is what economists term a “tippy market effect,” because of success tips to one firm or another.
  • “Work through social networks” – Think and act innovatively to create your social network. Hotmail adds a line promoting their email website at the bottom of each email it sends, which results in continual viral growth. Facebook has achieved a similar expansion through “socially influenced” distribution.
  • “Dynamically syndicate competence” – Your firm may have special expertise and competencies that you can globally market via the Internet.
  • “Recombine innovations” – Web 2.0 compliments traditional businesses without replacing them. Indeed, because of its remarkable networking, Web 2.0 is the ideal platform for aligning with other companies.

To illustrate, Jajah, a Web 2.0 voice telephony firm, partners with Deutsche Telekom, which owns T-Mobile.

Verdict & Book Review

This book was written and published by Amy Shuen and O’Reilly in 2008.

For those who have minimal knowledge of social media like me, it is a good start.

Read the book yourself. Click Here.

READ MY OTHER BOOK SUMMARY AND REVIEW

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Author: Muhamad Aarif

A notorious book addict by night and an oil and gas executive by day. As Mark Twain said, "The man who doesn't read good books has no advantage over the man who can't read them." So, read, read, and read some more.

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