07 mars 2008
Web2.0: The next frontier in digital business
By Steve Horvath — 07 August, 2007 12:55PM
Since Tim O'Reilly's article popularised the concept of an interactive and social web, Web2.0 has gained tremendous pace. Reminded of its intimidating presence by such successes as the MySpace sale to the Fox Interactive Media group in July 2005, Web2.0 represents the imminent new chapter in digital business. Not technology hype or a passing fad, Web2.0 promises to impact business function and model alike, a disruptive and enhanced Internet, bursting into mainstream ICT operations only years after the first web revolution.
What is Web2.0: Hype or revolution?
A slippery and somewhat misused term, Web2.0 is the topic of the moment (Gartner 2006). Often dismissed as marketing hype, it is important to draw the line between what is mere myth, and what may truly represent an upheaval in digital business. Web2.0 is not so much about new web technology, as it is about the way that these technologies are being used to augment ordinary human interaction and behaviour. Those in the "fad" camp frequently see Web2.0 as a collection of technology tools, many of which have been in existence for years. However, those able to see through the technological hype understand that the growing interest in human networking and the sharing of experiences online has the potential to again alter, and disaggregate traditional sources of value and methods of marketing.
In Web2.0 and online knowledge networking we discussed the progressive move toward an enhanced Internet, what O'Reilly (2005) refers to as an interactive environment rewarding flexibility, ease of interoperability and lightweight design in system architecture and business model alike. Within this emerging paradigm, the source of value creation within digital technology has shifted toward an architecture of participation; the harnessing of a collective intelligence of social participants within the system. In doing so, Web2.0 has firmly establishing the Internet as a platform for online dialogue (not monologue), with consumers gaining empowerment from others' conversations and discussions culminating in an ever-growing database of human experiences and know-how. Pushing the borders of what could be argued as a knowledge (and not just information) transfer, such usage patterns typically strengthen the value proposition of the overall system. This means that Web2.0 is often closely aligned to business operations, structures and models, making it much more than technology hype.
"Web 2.0 is much more than just pasting a new user interface onto an old application. It’s a way of thinking, a new perspective on the entire business of software— from concept through delivery, from marketing through support. Web 2.0 thrives on network effects: databases that get richer the more people interact with them, applications that are smarter the more people use them, marketing that is driven by user stories and experiences, and applications that interact with each other to form a broader computing platform." O’Reilly (2006) |
Indeed, Web2.0 embodies the evolutionary progression of Internet technology and usage dynamics toward a more fluid and agile "social" existence, an organic and responsive new business reality forever raising the value-added bar. In doing so, Web2.0 poses yet another imminent disruption to the operation space of modern business; coercing management to find new ways of engaging the consumer and doing business interactively online (Musser, 2006).
The 'socialisation' of experience: Models for learning businesses
A trend to appear over recent years has been that of recommendation and reputation-based systems. Capitalising on users motivated by feelings of anticipated reciprocity, improved reputation, efficacy and community (Kollock 1999; Rheingold 2000), the overall value proposition of such sites is ever-strengthened by the participation of their members. A noteworthy part of the achievements of these online businesses (e.g. Amazon, Epinions, Ebay etc.) is attributable to their members' direct and active contributions. In examining why, we find that the resultant collation of such experiences (e.g. feedback, reviews, testimonials etc.), if positive, represents a seemingly reliable endorsement of the products, services and/or agent's being promoted via them (Despotovic and Aberer 2006). Indeed, in a world now overloaded with information and choice, measuring and storing the quality of interactions is equally, if not even more important than measuring the links themselves (Scott 2005). Such an aggregated "quality of information", becomes an instrument for reducing uncertainty (complexity) and in doing so greatly impacts participant's decisions by saving time and reducing perceived risk (Masum and Zhang 2004; Ziegler and Lausen 2005).
Such reputation-based systems are but one facet of the architecture of participation which underpins many Web2.0 technologies. Instilling a sense of truth and validity in the information contained within, the socially inclusive and "on the ground" nature of these technologies is cutting against the grain of mainstream broadcast media business models, granting weight to the collective intelligence of the crowd (O'Reilly 2005). For example, viral marketing or influential manufacturer-endorsed bloggers have readily been deployed to spread positive word of mouth in preference over traditional media (Subramani and Rajagopalan 2003; Fadaghi 2006). Sensing this shift toward a 'socialisation' of experience, the world's largest media and advertising companies have jumped head-on into the online interactive market. The permission-based nature of most Web2.0 mediums facilitates highly tuned and targeted advertising, as demonstrated by the recent agreement between Fox Interactive Media (which includes web property MySpace) and Google (NewsCorp 2006). As user's actively and willingly participate, a clear profile of their interests and desires can be acquired, establishing not only direct passage for more personalised syndicated advertising, but a source of tremendously valuable market intelligence.
Epitomised by businesses like Google, Ebay and Amazon, Web2.0 systems are inherently adaptive and learning systems. They relentlessly scan their environments for indications (patterns) which may signal trends and follow-on to exploit emerging markets. In adjusting their structure to continuously secure new opportunities, such adaptive organisational systems often also evolve their business models and modes of operation. They embrace the chaos of business development by adopting a systemic policy of learning and knowledge acquisition, delivered upon a supporting infrastructure imparting necessary direction and control. In these cases, the architecture of participation delivers a continuous stream of permission-based market research, whilst at the same time reinforcing their position. Indeed, Web2.0 has the potential to allow for the simultaneous generation of revenue whilst performing research; the creation of organic, innovation and money-making machines.
The disruptive journey ahead
Indeed, Web2.0 is ushering in a new era of participation-propelled market outcomes. Internet technologies no longer singularly serve functions of mere utility, but may now be employed to extract more out of everyday human interactions, including as a platform for collating and recording the quality of such experiences. Accordingly, within the Web2.0 space of experience sharing and social networks, it is becoming apparent that the role the Internet plays for business is again shifting. This imminent and disruptive new chapter in digital business employs the interactive Internet medium to bring businesses, professionals and consumers together into the one digital business ecosystem. The promise being that of a virtual environment able to improve personal networking, strengthen relationships, stimulate the exchange of ideas, values and opinions, build reputations and catalyse the development of new products and services via the subsequent examination and data mining of permission-based contributions and social network analysis.
However, despite the many benefits, risks remain, as the openness of system design which welcomes participation, also exposes it to potential misuse. Thus, in incorporating concepts of Web2.0 into new business practices, it is imperative that any freedom and autonomy in design be balanced with methods capable of sustaining order and control. Indeed, this next frontier in digital business is a not a milestone to be conquered, but a continuous journey of closely-aligned business and open information systems development.
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