The Analysis of Web2.0

30 mars 2008

Web 2.0, mashups and social networking - what is it all about?

3 different terms - Web 2.0, mashup and social networking, but all intertwined in the brave new Internet, the so-called second phase of the evolution of the online world. But what does it all mean?

Some companies have made the claim of using "Web 2.0" as a marketing strategy, but it seems in many cases it may be unfounded.

Do you really need to have a "New! Improved by Web 2.0" slogan on your site in order to survive and thrive? Not really, it's somewhat of a buzzword, but it's good to understand what this jargon means and to begin thinking about how your site can evolve to take advantage of the direction the web is heading in.

Long gone is the the concept of the Internet geek - the loner in a darkened room engaged in uber-technical pursuits. The web is cool with teens, it's a vital tool and recreation area for Generation X, the web is happening with senior citizens and as a result, it's becoming increasingly user driven rather than tech-geek dictated.

What is Web 2.0?

The roots of the term "Web 2.0" were in a conference brainstorming session between O'Reilly and MediaLive International in 2004. It referred to a change of thinking about how the applications of the future should be developed. Even before the term existed, Web 2.0 type applications were already around; e.g. blogging software. The brainstorming session sought to identify the common elements of these popular applications and services as a model for the future.

Web 2.0 applications and services have at least several of the following elements common:

- fresh, useful data is the core
- the ability for other parties to manipulate that data
- "living" applications that can be easily adapted
- harnessing the collective experience
- the web as a platform, independent of user platform
- primary focus of participation, rather than publishing
- trusting of users to provide reliable content

Other examples of applications and services with strong Web 2.0 influences are bookmark sharing, Google AdSense, RSS web feeds, Wikipedia and the thousands of mashups currently in existence. Personally, I see forums as a Web 2.0 type of application, but I don't see them recognized as such.

The very interesting point I find about the whole Web 2.0 movement is that in one particular aspect, it's really nothing new. In the 70's the technology boffins were desperately trying to get away from the mainframe/dumb terminal infrastructure and in some ways, we're heading back to that - just with hugely increased flexibility.

For a very much more detailed description of Web 2.0 concepts, something not overly technical, I highly recommend this article by Tim O'Reilly of O’Reilly Media, Inc.

What is a mashup?

The term "mashup" originated in the music industry - it's music that is made up of other songs already released, usually by other artists. I often find myself saying to my daughters that the "new" song they think is so cool is actually the bass line from X artist circa 1974 and the electric guitar riffs from X song originally recorded in 1982. Pah! Modern music, don't get me started ;). 

Anyway, mashups in the web development world are actually very useful things ;). A mashup is usually a web-based application that combines content and functionality from a variety of sources using technologies including RSS and AJAX (Asynchronous JavaScript And XML).

Mashups generally don't require a programming degree, hence the rapid uptake of the concept. A company will release an API (Application Programming Interface) which is the interface that allows for external requests to be made to whatever content the company is offering. Instead of it being just a rigid reproduction of information, there is a high degree of interactivity and for the developer/user to manipulate that data - hence its tie in with Web 2.0 concepts.

So, between the API implementation and the user/developer's additional work to manipulate the content for use within another application - that's a mashup; although some purists might argue more than one API needs to be used to qualify for that term.

Mashups can be very simple or extraordinarily complex; for example, VirtualPlaces is a mashup of APIs provided by Amazon Web Services, Weather.com, Flickr, MSN Search, Feedmap and GeoURL.

If you'd like to start messing around in the world of mashups, there's some very good mashup tutorials here.

What are social networking applications?

There's a huge difference between social networking and social engineering - I've seen a few people get mixed up between the two.

Social engineering is a term related to hacking. It's the process by which a hacker or fraudster elicits information from people in order to get access to their/their company's systems. For example, a hacker may call an employee posing as a senior executive and ask for details relating to a certain client in order to access the profile and create havoc.

Generally speaking, social networking services relating to the web are where a group of people launch a highly interactive service based on common interests between users and easy to use communications tools to detail and promote those interests to others.

They then invite their friends and colleagues to join and encourage them to also to invite people they know who have similar interests. Introductions are then made between these people that have been invited throughout the various tiers of the process.

Via common connections these processes connect businesses to consumers, consumers to consumers and businesses to businesses whom otherwise may not have met. It also helps establish a network of credibility - "oh, X knows Y so Y must be ok". If Y is making a recommendation about a product or service, then that single recommendation may wield a great deal of purchasing influence.

A great example of social networking is the hugely popular MySpace.com - an online community that lets you meet your friends' friends and colleagues. A single profile can generate a little "world" of people who have similar interests, with these worlds eventually overlapping with other worlds. It's useful to the user and a marketers dream :). MySpace has really found it's niche in music and band branding - many of the top bands in the world have MySpace pages.

Another pioneer that has become extraordinarily successful is Friendster.

From an ecommerce aspect, LinkedIn is a great example, with over 4 million members. I've been a member of LinkedIn for a while and it's very interesting to see who knows whom. Big players such as Google and Adobe have representation in the network, allowing LinkedIn members a route via their network of connections to some of the decision makers within large companies.

The popularity of social networking applications reinforces the validity of the theory of "six degrees of separation"; that is, that any two human beings, regardless of age, color, creed or social status have some sort of connection within five intermediaries. For example:

- I know Fred, who works in the Department of Commerce
- Fred regularly communicates with his boss
- His boss meets with the agency head once a week
- The agency head communicates with one of the President's inner circle
- That person lunches with the President every month to discuss issues.

While I'm based in Australia and have never met the President of the USA, I have "connections" to him, only separated by 5 degrees. Web based social networking applications will probably decrease the number of degrees of separation for millions of people in the years ahead.

The humble blog can also be considered to be a form of social networking application. It invites others to comment on items and the blog itself "pings" another blog when a post is made that relates to the other blog. It's a more insular world, but very effective nonetheless for building large networks. Many bloggers, through the exchange of links and post quoting, build up huge networks - not just of users and subscribers, but of other bloggers.

What does all this mean for online business?

For those of us who have established online businesses as somewhat of a way to avoid human interaction, I have bad news :). Heavy participation with our audiences is becoming increasingly expected. In the years ahead, it will become more difficult to have a successful, fully automated site where you can take off for a week and ignore what's happening.

A great example of this is blogging. I've read a few stories where once successful bloggers became a little slack in updating and lost their visitors very, very quickly - forever. Blogging is a powerful tool that can become useless if it isn't kept relatively fresh.

For those who run social networking services such as MySpace, they need to continually have their finger on the pulse of what their users want. Many social networking services will spring up during the years ahead, but I believe relatively few will thrive due to this frenetic pace of adapting to user demands.

Given the availability and relative ease of implementation of mashups, people will also demand more from us smaller players. For example, not so long ago, having a basic map to your premises on your site was a great customer service. In the time ahead, people will want detailed instructions of getting to your premises from wherever they are - street by street, road by road, turn by turn - complete with photos of surrounding buildings and landmarks.

It appears that thinking too hard is becoming an optional extra for human existence ;) - although, with many of us becoming "specialists" in given areas in our lives and with data overload becoming a real problem, perhaps we just don't have the headspace for thinking about "menial" issues any more.

General user communities will also become increasingly important - using forums as a marketing tool only or just for traffic generation will fall by the wayside in many cases - it's already very tough to make a forum succeed. Clients and visitors want to interact with each other, but also with you and the wider related communities. It's all very tribal :).

Getting into Web 2.0 - the easy way

There's no need to start scurrying to implement mashup applications right away - simple as they are in many cases, there's still a learning curve and developing your own API's is a more complex task.

For starters, I suggest if you have content you wish for others to reproduce, while offering articles directly from your site is a great way to go, you may want to consider automating this somewhat using an RSS web feed - it's pretty simple to implement.

In doing this, you may also be able to get broader exposure by providing data for mashup developers to include in their applications and for industry commentators and journalists to have an easy way to keep up to date with what's happening in your sector. It doesn't have to be just articles you use. You may have a catalog with items containing technical specifications which could be useful to other sites. Just be sure that there's an easy way for the person viewing the content on the other site to make their way back to you.

Invite developers to comment on your feeds; ask them how it should evolve. You may find some of them wanting to collaborate with you in improving your feeds in a way that will benefit you as much as them.

If your site doesn't offer content for reproduction, I suggest starting a blog or a forum and implementing an RSS feed around that. It's just a matter of posting news items from your industry, but not just repeated in a parrot-type fashion; inject your own spin and opinions and relate it back to your own business if possible. Encouraging comment is also important, it keeps a topic alive and interesting.

If time allows, get involved with other social networking services; use them as a launching pad for getting the word out about your company - just as many bands are doing via MySpace.

While the new "connected" generation presents us all with many challenges, especially those of us whom are smaller players; there's some great opportunities as well. The popularity of Web 2.0, mashups and social networking applications will allow for viral marketing in ways and with reach not possible before.

07 mars 2008

What is the Social Web?

The Early Days of the Internet and Web 1.0:

When the Internet first became a household word, the World Wide Web was very one-sided with most websites providing static information. From the mid-1990s to the early 2000s, the Internet remained fairly one-sided with primary offerings including informational and transactional (online shopping) websites.

The Internet Becomes Social with Web 2.0:

The second generation of the Internet came about in the early 2000s and was called Web 2.0 or the social web. No longer were people satisfied being talked at. Instead, they wanted to join the conversation and have a say in the World Wide Web. The evolution of the social web began with user-generated content. Personal websites, forums and online chats became just a few of the standard features of Web 2.0 and made way for blogs, social networking, social bookmarking and more.

Popular Tools of the Social Web:

• Blogs
• Social bookmarking: Digg, StumbleUpon, Reddit, etc.
• Social networking: MySpace, Facebook, LinkedIn, etc.
• Groups: Google, Yahoo, etc.
• File sharing: YouTube, Napster, etc.
• Wikis: Wikipedia, Google's Knol
• Virtual worlds: SecondLife
• Instant messaging
• Online chat
• Forums

Blogging and the Social Web:

Blogging is an integral part of the social web. A blog's success relies heavily on its community of readers. That community is typically built through online networking and promotion through the various tools of the social web. From bookmarking important posts to participating in relevant forums, a blogger's online activities within the social web can make or break a blog's success.

The Next Social Network? It's Web 2.0, And It Knows Where You Are

By Michael Calore October 12, 2007

The Web 2.0 Summit kicks off next week here in San Francisco. Epicenter's Julie Sloane and I will be there, blogging and passing out cards (and just plain passing out).

The official theme this year is "The Web's Edge," but based on murmurings I've read recently, I'd like to propose a less official theme: "The Socialization of Presence."

I got to thinking about this after reading Chris Messina's thought-provoking blog post riffing on Google's acquisition of the social messaging service Jaiku. If you're not familiar with the news, see our coverage on Compiler.

Chris' post refers to a meme started earlier this year by Web 2.0 conference co-chair Tim O'Reilly called the "Web 2.0 Address Book," a nebulous product (yet to be invented) that's basically a location-aware contact list. The idea is that all of our real social apps already exist in the form of e-mail, your phone, IM and Twitter. We just need some glue to make everything work together.

Messina extends the idea to a possible scenario: Rather than calling somebody or sending an e-mail or a Twitter or an IM, you just open up your contact list and click on their name. Wherever they are, your communication reaches them via the most convenient and appropriate means. So, they're walking on the beach, their iPhone rings. If they're in a meeting, they get a text message. If they're at their desk, they get an e-mail. If they're in Asia, they're probably asleep, so they get a voicemail.

Another name for it is the "presence-enabled phone book."

Last month, Jaiku's Jyri Engeström argued that this location-aware utility is the key piece of functionality missing from the iPhone. Not a surprising point of view considering it's pretty close to where his company is headed. Jyri points to O'Reilly's post which makes the same point.

Messina, however, argues on the iPhone's behalf. He asserts that Apple's browser-centered "dumb device" is the perfect tool with which to surf the social presence web. He brands the iPhone the Sputnik of this new frontier, the first of many devices to come. Logically then, since Google bought Jaiku and since the company is rumored to be building its own mobile platform, this is one of the holes we can expect the so-called GPhone to fill.

And for anyone weary of joining yet another social networking platform in order to participate, worry not. You're already a member. This new presence-aware social network is the web.

In Messina's vision of the future, your "presence" doesn't just exist on Facebook or Google. Rather, it lives in that layer of information which can be assembled from the pieces stored on every service you're a part of. Obviously, microformats would play a key part in such a scenario. Standards like hCard and hCalendar can be used to track where you are and what you're up to. OpenID can verify your identity, making your location data accessible to you and your group of friends. Instantly, anyone who wanted to get in touch with you could just look you up in their contact list and see where you are, what you're doing, what you'll be doing this afternoon and the best way to get in touch with you right now.

Actually, I should amend that last sentence -- anyone you trust would be able to get in touch with you. That's one of the complicated caveats here, and one that Messina touches on in his post. In order for this presence network to properly blossom, we need to overcome the hurdle of privacy. Not only do we need more secure and innovative ways of safely establishing and maintaining our identities, but we all need to get more comfortable with putting our information out there in the first place.

More importantly, we also need to free up all of our personal data that's already out there, languishing in closed networks like Facebook. Sadly, that might prove to be the most difficult hurdle.

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.

The future WEB2.0 social experience

Ben Hunt casts an eye to the future of a more connected web and how we will experience it through new social applications.

This vision features insights into new search engines, an online marketplace, and solutions for phishing and spam.

Ben also predicts that Yahoo will be the dominant online brand for the next 5 years

The next killer app

The next killer app isn't an app.

It will be a new networking platform that builds on today's world-wide web and makes possible new generations of more powerful and useful applications.

My vision is of a next-generation web that is just as simple and flexible as web 1.0, but more interconnected and powerful.

At its core, it will incorporate a universe of connections that reflects the real-life links between people, organisations, services, products, web sites, and other entities.

Picture this

• A browser that instantly shows you the content you'll find most interesting
• Search engines that return fewer, better results - every time
• A marketplace that always tells you the best products and services, and lets you advertise anything you like
• A world with no more spam, phishing or online scams
• Being able to access your contacts' current details all the time, without effort
• and being able to find the right contact wherever you are

I'd like to share my vision for how all this will work, which is low-tech, doesn't rely on any new technology, and is nearer than you think. And I predict that Yahoo! will probably be the company to make this happen, in the next 2 years.

An evolutionary step

The web has given us some great applications that let us do some amazing things: communicate, publish, share, and shop with greater ease and speed than ever before. People, content, and data are more fluid and connected than ever before.

However, the world-wide web has now reached the limits of the platform. These great applications that we have are still fragmented and inconsistent when they could be interconnected and co-operative.

The new web will be a platform that simply joins up all the functions and data with a new network of connections below the application level, enabling a new generation of applications that will make life easier, more productive, safer. and more fun.

Searching today's fragmented web

Think how often you use an internet-based application to find something: content, recommendations, shopping, services, contact details, research, comparison...

Remember: "The answer is out there!"

The right answer is nearly always out there - somewhere.

• That person's contact details do exist online
• There is a piece of software that does just what you need
• There is a company that sells the item you need at the right price
• Someone is trying to sell the sofa that's perfect for your room

Most web applications are trying to match information to where that information is needed

The major problem is intrinsic to the Internet's architecture: there is no center. The lack of center is the reason why the web has become so useful so quickly - it has enabled free, organic growth.

But it also means that any time we try to compare information, we have to try to collect information in one place - such as on a single database. That's difficult on the web, although there are partial successes, see below:

Examples of the fragmented web

• Ebay has a huge database of people selling stuff, which it matches to people looking for stuff
• Google has a massive index of web page content, which it matches to search phrases
• Friends Reunited has a database of where people went to school
• Car Harbor is a solution (currently in development) that will match people looking for car parking with people who have free space to rent
• Loads of dating sites have databases of people wanting to find people who want to find people
• LinkedIn has a database of businesspeople's information, and links between them

I could go on. What these applications have in common is that:

• They all try to match information with needs-for-information
• They all have their own databases that contain a small proportion of the information out there
• And their scope is limited to only the data they hold themselves

In other words, they all have part of the picture.

This means they can only try to find the best answer to what you need with the information available.

It doesn't matter how much bigger or smarter these systems get, they're limited by the fragmented web version 1.0. Google or Ask.com will never be able to know what you really want when you search for "home run". This is because the current web is still locked into reductionism. Because all these applications are just part of a disconnected world of data, they're forced to reduce everything to their basic component parts.

25 février 2008

Web2.0 eCity

Web 2.0 ... The Machine is Us/ing Us

What Is Web 2.0

Design Patterns and Business Models for the Next Generation of Software

by Tim O'Reilly
09/30/2005

The bursting of the dot-com bubble in the fall of 2001 marked a turning point for the web. Many people concluded that the web was overhyped, when in fact bubbles and consequent shakeouts appear to be a common feature of all technological revolutions. Shakeouts typically mark the point at which an ascendant technology is ready to take its place at center stage. The pretenders are given the bum's rush, the real success stories show their strength, and there begins to be an understanding of what separates one from the other.

The concept of "Web 2.0" began with a conference brainstorming session between O'Reilly and MediaLive International. Dale Dougherty, web pioneer and O'Reilly VP, noted that far from having "crashed", the web was more important than ever, with exciting new applications and sites popping up with surprising regularity. What's more, the companies that had survived the collapse seemed to have some things in common. Could it be that the dot-com collapse marked some kind of turning point for the web, such that a call to action such as "Web 2.0" might make sense? We agreed that it did, and so the Web 2.0 Conference was born.

In the year and a half since, the term "Web 2.0" has clearly taken hold, with more than 9.5 million citations in Google. But there's still a huge amount of disagreement about just what Web 2.0 means, with some people decrying it as a meaningless marketing buzzword, and others accepting it as the new conventional wisdom.

This article is an attempt to clarify just what we mean by Web 2.0.

In our initial brainstorming, we formulated our sense of Web 2.0 by example:

Web 1.0		Web 2.0
DoubleClick	-->	Google AdSense
Ofoto	-->	Flickr
Akamai	-->	BitTorrent
mp3.com	-->	Napster
Britannica Online	-->	Wikipedia
personal websites	-->	blogging
evite	-->	upcoming.org and EVDB
domain name speculation	-->	search engine optimization
page views	-->	cost per click
screen scraping	-->	web services
publishing	-->	participation
content management systems	-->	wikis
directories (taxonomy)	-->	tagging ("folksonomy")
stickiness	-->	syndication

The list went on and on. But what was it that made us identify one application or approach as "Web 1.0" and another as "Web 2.0"? (The question is particularly urgent because the Web 2.0 meme has become so widespread that companies are now pasting it on as a marketing buzzword, with no real understanding of just what it means. The question is particularly difficult because many of those buzzword-addicted startups are definitely not Web 2.0, while some of the applications we identified as Web 2.0, like Napster and BitTorrent, are not even properly web applications!) We began trying to tease out the principles that are demonstrated in one way or another by the success stories of web 1.0 and by the most interesting of the new applications.

1. The Web As Platform

Like many important concepts, Web 2.0 doesn't have a hard boundary, but rather, a gravitational core. You can visualize Web 2.0 as a set of principles and practices that tie together a veritable solar system of sites that demonstrate some or all of those principles, at a varying distance from that core.

Figure 1 shows a "meme map" of Web 2.0 that was developed at a brainstorming session during FOO Camp, a conference at O'Reilly Media. It's very much a work in progress, but shows the many ideas that radiate out from the Web 2.0 core.

For example, at the first Web 2.0 conference, in October 2004, John Battelle and I listed a preliminary set of principles in our opening talk. The first of those principles was "The web as platform." Yet that was also a rallying cry of Web 1.0 darling Netscape, which went down in flames after a heated battle with Microsoft. What's more, two of our initial Web 1.0 exemplars, DoubleClick and Akamai, were both pioneers in treating the web as a platform. People don't often think of it as "web services", but in fact, ad serving was the first widely deployed web service, and the first widely deployed "mashup" (to use another term that has gained currency of late). Every banner ad is served as a seamless cooperation between two websites, delivering an integrated page to a reader on yet another computer. Akamai also treats the network as the platform, and at a deeper level of the stack, building a transparent caching and content delivery network that eases bandwidth congestion.

Nonetheless, these pioneers provided useful contrasts because later entrants have taken their solution to the same problem even further, understanding something deeper about the nature of the new platform. Both DoubleClick and Akamai were Web 2.0 pioneers, yet we can also see how it's possible to realize more of the possibilities by embracing additional Web 2.0 design patterns.

Let's drill down for a moment into each of these three cases, teasing out some of the essential elements of difference.

Netscape vs. Google

If Netscape was the standard bearer for Web 1.0, Google is most certainly the standard bearer for Web 2.0, if only because their respective IPOs were defining events for each era. So let's start with a comparison of these two companies and their positioning.

Netscape framed "the web as platform" in terms of the old software paradigm: their flagship product was the web browser, a desktop application, and their strategy was to use their dominance in the browser market to establish a market for high-priced server products. Control over standards for displaying content and applications in the browser would, in theory, give Netscape the kind of market power enjoyed by Microsoft in the PC market. Much like the "horseless carriage" framed the automobile as an extension of the familiar, Netscape promoted a "webtop" to replace the desktop, and planned to populate that webtop with information updates and applets pushed to the webtop by information providers who would purchase Netscape servers.

In the end, both web browsers and web servers turned out to be commodities, and value moved "up the stack" to services delivered over the web platform.

Google, by contrast, began its life as a native web application, never sold or packaged, but delivered as a service, with customers paying, directly or indirectly, for the use of that service. None of the trappings of the old software industry are present. No scheduled software releases, just continuous improvement. No licensing or sale, just usage. No porting to different platforms so that customers can run the software on their own equipment, just a massively scalable collection of commodity PCs running open source operating systems plus homegrown applications and utilities that no one outside the company ever gets to see.

At bottom, Google requires a competency that Netscape never needed: database management. Google isn't just a collection of software tools, it's a specialized database. Without the data, the tools are useless; without the software, the data is unmanageable. Software licensing and control over APIs--the lever of power in the previous era--is irrelevant because the software never need be distributed but only performed, and also because without the ability to collect and manage the data, the software is of little use. In fact, the value of the software is proportional to the scale and dynamism of the data it helps to manage.

Google's service is not a server--though it is delivered by a massive collection of internet servers--nor a browser--though it is experienced by the user within the browser. Nor does its flagship search service even host the content that it enables users to find. Much like a phone call, which happens not just on the phones at either end of the call, but on the network in between, Google happens in the space between browser and search engine and destination content server, as an enabler or middleman between the user and his or her online experience.

While both Netscape and Google could be described as software companies, it's clear that Netscape belonged to the same software world as Lotus, Microsoft, Oracle, SAP, and other companies that got their start in the 1980's software revolution, while Google's fellows are other internet applications like eBay, Amazon, Napster, and yes, DoubleClick and Akamai.

DoubleClick vs. Overture and AdSense

Like Google, DoubleClick is a true child of the internet era. It harnesses software as a service, has a core competency in data management, and, as noted above, was a pioneer in web services long before web services even had a name. However, DoubleClick was ultimately limited by its business model. It bought into the '90s notion that the web was about publishing, not participation; that advertisers, not consumers, ought to call the shots; that size mattered, and that the internet was increasingly being dominated by the top websites as measured by MediaMetrix and other web ad scoring companies.

As a result, DoubleClick proudly cites on its website "over 2000 successful implementations" of its software. Yahoo! Search Marketing (formerly Overture) and Google AdSense, by contrast, already serve hundreds of thousands of advertisers apiece.

Overture and Google's success came from an understanding of what Chris Anderson refers to as "the long tail," the collective power of the small sites that make up the bulk of the web's content. DoubleClick's offerings require a formal sales contract, limiting their market to the few thousand largest websites. Overture and Google figured out how to enable ad placement on virtually any web page. What's more, they eschewed publisher/ad-agency friendly advertising formats such as banner ads and popups in favor of minimally intrusive, context-sensitive, consumer-friendly text advertising.

The Web 2.0 lesson: leverage customer-self service and algorithmic data management to reach out to the entire web, to the edges and not just the center, to the long tail and not just the head.

A Platform Beats an Application Every Time In each of its past confrontations with rivals, Microsoft has successfully played the platform card, trumping even the most dominant applications. Windows allowed Microsoft to displace Lotus 1-2-3 with Excel, WordPerfect with Word, and Netscape Navigator with Internet Explorer. This time, though, the clash isn't between a platform and an application, but between two platforms, each with a radically different business model: On the one side, a single software provider, whose massive installed base and tightly integrated operating system and APIs give control over the programming paradigm; on the other, a system without an owner, tied together by a set of protocols, open standards and agreements for cooperation. Windows represents the pinnacle of proprietary control via software APIs. Netscape tried to wrest control from Microsoft using the same techniques that Microsoft itself had used against other rivals, and failed. But Apache, which held to the open standards of the web, has prospered. The battle is no longer unequal, a platform versus a single application, but platform versus platform, with the question being which platform, and more profoundly, which architecture, and which business model, is better suited to the opportunity ahead. Windows was a brilliant solution to the problems of the early PC era. It leveled the playing field for application developers, solving a host of problems that had previously bedeviled the industry. But a single monolithic approach, controlled by a single vendor, is no longer a solution, it's a problem. Communications-oriented systems, as the internet-as-platform most certainly is, require interoperability. Unless a vendor can control both ends of every interaction, the possibilities of user lock-in via software APIs are limited. Any Web 2.0 vendor that seeks to lock in its application gains by controlling the platform will, by definition, no longer be playing to the strengths of the platform. This is not to say that there are not opportunities for lock-in and competitive advantage, but we believe they are not to be found via control over software APIs and protocols. There is a new game afoot. The companies that succeed in the Web 2.0 era will be those that understand the rules of that game, rather than trying to go back to the rules of the PC software era.

Not surprisingly, other web 2.0 success stories demonstrate this same behavior. eBay enables occasional transactions of only a few dollars between single individuals, acting as an automated intermediary. Napster (though shut down for legal reasons) built its network not by building a centralized song database, but by architecting a system in such a way that every downloader also became a server, and thus grew the network.

Akamai vs. BitTorrent

Like DoubleClick, Akamai is optimized to do business with the head, not the tail, with the center, not the edges. While it serves the benefit of the individuals at the edge of the web by smoothing their access to the high-demand sites at the center, it collects its revenue from those central sites.

BitTorrent, like other pioneers in the P2P movement, takes a radical approach to internet decentralization. Every client is also a server; files are broken up into fragments that can be served from multiple locations, transparently harnessing the network of downloaders to provide both bandwidth and data to other users. The more popular the file, in fact, the faster it can be served, as there are more users providing bandwidth and fragments of the complete file.

BitTorrent thus demonstrates a key Web 2.0 principle: the service automatically gets better the more people use it. While Akamai must add servers to improve service, every BitTorrent consumer brings his own resources to the party. There's an implicit "architecture of participation", a built-in ethic of cooperation, in which the service acts primarily as an intelligent broker, connecting the edges to each other and harnessing the power of the users themselves.

2. Harnessing Collective Intelligence

The central principle behind the success of the giants born in the Web 1.0 era who have survived to lead the Web 2.0 era appears to be this, that they have embraced the power of the web to harness collective intelligence:

• Hyperlinking is the foundation of the web. As users add new content, and new sites, it is bound in to the structure of the web by other users discovering the content and linking to it. Much as synapses form in the brain, with associations becoming stronger through repetition or intensity, the web of connections grows organically as an output of the collective activity of all web users.
• Yahoo!, the first great internet success story, was born as a catalog, or directory of links, an aggregation of the best work of thousands, then millions of web users. While Yahoo! has since moved into the business of creating many types of content, its role as a portal to the collective work of the net's users remains the core of its value.
• Google's breakthrough in search, which quickly made it the undisputed search market leader, was PageRank, a method of using the link structure of the web rather than just the characteristics of documents to provide better search results.
• eBay's product is the collective activity of all its users; like the web itself, eBay grows organically in response to user activity, and the company's role is as an enabler of a context in which that user activity can happen. What's more, eBay's competitive advantage comes almost entirely from the critical mass of buyers and sellers, which makes any new entrant offering similar services significantly less attractive.
• Amazon sells the same products as competitors such as Barnesandnoble.com, and they receive the same product descriptions, cover images, and editorial content from their vendors. But Amazon has made a science of user engagement. They have an order of magnitude more user reviews, invitations to participate in varied ways on virtually every page--and even more importantly, they use user activity to produce better search results. While a Barnesandnoble.com search is likely to lead with the company's own products, or sponsored results, Amazon always leads with "most popular", a real-time computation based not only on sales but other factors that Amazon insiders call the "flow" around products. With an order of magnitude more user participation, it's no surprise that Amazon's sales also outpace competitors.

Now, innovative companies that pick up on this insight and perhaps extend it even further, are making their mark on the web:

• Wikipedia, an online encyclopedia based on the unlikely notion that an entry can be added by any web user, and edited by any other, is a radical experiment in trust, applying Eric Raymond's dictum (originally coined in the context of open source software) that "with enough eyeballs, all bugs are shallow," to content creation. Wikipedia is already in the top 100 websites, and many think it will be in the top ten before long. This is a profound change in the dynamics of content creation!
• Sites like del.icio.us and Flickr, two companies that have received a great deal of attention of late, have pioneered a concept that some people call "folksonomy" (in contrast to taxonomy), a style of collaborative categorization of sites using freely chosen keywords, often referred to as tags. Tagging allows for the kind of multiple, overlapping associations that the brain itself uses, rather than rigid categories. In the canonical example, a Flickr photo of a puppy might be tagged both "puppy" and "cute"--allowing for retrieval along natural axes generated user activity.
• Collaborative spam filtering products like Cloudmark aggregate the individual decisions of email users about what is and is not spam, outperforming systems that rely on analysis of the messages themselves.
• It is a truism that the greatest internet success stories don't advertise their products. Their adoption is driven by "viral marketing"--that is, recommendations propagating directly from one user to another. You can almost make the case that if a site or product relies on advertising to get the word out, it isn't Web 2.0.
• Even much of the infrastructure of the web--including the Linux, Apache, MySQL, and Perl, PHP, or Python code involved in most web servers--relies on the peer-production methods of open source, in themselves an instance of collective, net-enabled intelligence. There are more than 100,000 open source software projects listed on SourceForge.net. Anyone can add a project, anyone can download and use the code, and new projects migrate from the edges to the center as a result of users putting them to work, an organic software adoption process relying almost entirely on viral marketing.

The lesson: Network effects from user contributions are the key to market dominance in the Web 2.0 era.

Blogging and the Wisdom of Crowds

One of the most highly touted features of the Web 2.0 era is the rise of blogging. Personal home pages have been around since the early days of the web, and the personal diary and daily opinion column around much longer than that, so just what is the fuss all about?

At its most basic, a blog is just a personal home page in diary format. But as Rich Skrenta notes, the chronological organization of a blog "seems like a trivial difference, but it drives an entirely different delivery, advertising and value chain."

One of the things that has made a difference is a technology called RSS. RSS is the most significant advance in the fundamental architecture of the web since early hackers realized that CGI could be used to create database-backed websites. RSS allows someone to link not just to a page, but to subscribe to it, with notification every time that page changes. Skrenta calls this "the incremental web." Others call it the "live web".

Now, of course, "dynamic websites" (i.e., database-backed sites with dynamically generated content) replaced static web pages well over ten years ago. What's dynamic about the live web are not just the pages, but the links. A link to a weblog is expected to point to a perennially changing page, with "permalinks" for any individual entry, and notification for each change. An RSS feed is thus a much stronger link than, say a bookmark or a link to a single page.

The Architecture of Participation Some systems are designed to encourage participation. In his paper, The Cornucopia of the Commons, Dan Bricklin noted that there are three ways to build a large database. The first, demonstrated by Yahoo!, is to pay people to do it. The second, inspired by lessons from the open source community, is to get volunteers to perform the same task. The Open Directory Project, an open source Yahoo competitor, is the result. But Napster demonstrated a third way. Because Napster set its defaults to automatically serve any music that was downloaded, every user automatically helped to build the value of the shared database. This same approach has been followed by all other P2P file sharing services. One of the key lessons of the Web 2.0 era is this: Users add value. But only a small percentage of users will go to the trouble of adding value to your application via explicit means. Therefore, Web 2.0 companies set inclusive defaults for aggregating user data and building value as a side-effect of ordinary use of the application. As noted above, they build systems that get better the more people use them. Mitch Kapor once noted that "architecture is politics." Participation is intrinsic to Napster, part of its fundamental architecture. This architectural insight may also be more central to the success of open source software than the more frequently cited appeal to volunteerism. The architecture of the internet, and the World Wide Web, as well as of open source software projects like Linux, Apache, and Perl, is such that users pursuing their own "selfish" interests build collective value as an automatic byproduct. Each of these projects has a small core, well-defined extension mechanisms, and an approach that lets any well-behaved component be added by anyone, growing the outer layers of what Larry Wall, the creator of Perl, refers to as "the onion." In other words, these technologies demonstrate network effects, simply through the way that they have been designed. These projects can be seen to have a natural architecture of participation. But as Amazon demonstrates, by consistent effort (as well as economic incentives such as the Associates program), it is possible to overlay such an architecture on a system that would not normally seem to possess it.

RSS also means that the web browser is not the only means of viewing a web page. While some RSS aggregators, such as Bloglines, are web-based, others are desktop clients, and still others allow users of portable devices to subscribe to constantly updated content.

RSS is now being used to push not just notices of new blog entries, but also all kinds of data updates, including stock quotes, weather data, and photo availability. This use is actually a return to one of its roots: RSS was born in 1997 out of the confluence of Dave Winer's "Really Simple Syndication" technology, used to push out blog updates, and Netscape's "Rich Site Summary", which allowed users to create custom Netscape home pages with regularly updated data flows. Netscape lost interest, and the technology was carried forward by blogging pioneer Userland, Winer's company. In the current crop of applications, we see, though, the heritage of both parents.

But RSS is only part of what makes a weblog different from an ordinary web page. Tom Coates remarks on the significance of the permalink:

It may seem like a trivial piece of functionality now, but it was effectively the device that turned weblogs from an ease-of-publishing phenomenon into a conversational mess of overlapping communities. For the first time it became relatively easy to gesture directly at a highly specific post on someone else's site and talk about it. Discussion emerged. Chat emerged. And - as a result - friendships emerged or became more entrenched. The permalink was the first - and most successful - attempt to build bridges between weblogs.

In many ways, the combination of RSS and permalinks adds many of the features of NNTP, the Network News Protocol of the Usenet, onto HTTP, the web protocol. The "blogosphere" can be thought of as a new, peer-to-peer equivalent to Usenet and bulletin-boards, the conversational watering holes of the early internet. Not only can people subscribe to each others' sites, and easily link to individual comments on a page, but also, via a mechanism known as trackbacks, they can see when anyone else links to their pages, and can respond, either with reciprocal links, or by adding comments.

Interestingly, two-way links were the goal of early hypertext systems like Xanadu. Hypertext purists have celebrated trackbacks as a step towards two way links. But note that trackbacks are not properly two-way--rather, they are really (potentially) symmetrical one-way links that create the effect of two way links. The difference may seem subtle, but in practice it is enormous. Social networking systems like Friendster, Orkut, and LinkedIn, which require acknowledgment by the recipient in order to establish a connection, lack the same scalability as the web. As noted by Caterina Fake, co-founder of the Flickr photo sharing service, attention is only coincidentally reciprocal. (Flickr thus allows users to set watch lists--any user can subscribe to any other user's photostream via RSS. The object of attention is notified, but does not have to approve the connection.)

If an essential part of Web 2.0 is harnessing collective intelligence, turning the web into a kind of global brain, the blogosphere is the equivalent of constant mental chatter in the forebrain, the voice we hear in all of our heads. It may not reflect the deep structure of the brain, which is often unconscious, but is instead the equivalent of conscious thought. And as a reflection of conscious thought and attention, the blogosphere has begun to have a powerful effect.

First, because search engines use link structure to help predict useful pages, bloggers, as the most prolific and timely linkers, have a disproportionate role in shaping search engine results. Second, because the blogging community is so highly self-referential, bloggers paying attention to other bloggers magnifies their visibility and power. The "echo chamber" that critics decry is also an amplifier.

If it were merely an amplifier, blogging would be uninteresting. But like Wikipedia, blogging harnesses collective intelligence as a kind of filter. What James Suriowecki calls "the wisdom of crowds" comes into play, and much as PageRank produces better results than analysis of any individual document, the collective attention of the blogosphere selects for value.

While mainstream media may see individual blogs as competitors, what is really unnerving is that the competition is with the blogosphere as a whole. This is not just a competition between sites, but a competition between business models. The world of Web 2.0 is also the world of what Dan Gillmor calls "we, the media," a world in which "the former audience", not a few people in a back room, decides what's important.

3. Data is the Next Intel Inside

Every significant internet application to date has been backed by a specialized database: Google's web crawl, Yahoo!'s directory (and web crawl), Amazon's database of products, eBay's database of products and sellers, MapQuest's map databases, Napster's distributed song database. As Hal Varian remarked in a personal conversation last year, "SQL is the new HTML." Database management is a core competency of Web 2.0 companies, so much so that we have sometimes referred to these applications as "infoware" rather than merely software.

This fact leads to a key question: Who owns the data?

In the internet era, one can already see a number of cases where control over the database has led to market control and outsized financial returns. The monopoly on domain name registry initially granted by government fiat to Network Solutions (later purchased by Verisign) was one of the first great moneymakers of the internet. While we've argued that business advantage via controlling software APIs is much more difficult in the age of the internet, control of key data sources is not, especially if those data sources are expensive to create or amenable to increasing returns via network effects.

Look at the copyright notices at the base of every map served by MapQuest, maps.yahoo.com, maps.msn.com, or maps.google.com, and you'll see the line "Maps copyright NavTeq, TeleAtlas," or with the new satellite imagery services, "Images copyright Digital Globe." These companies made substantial investments in their databases (NavTeq alone reportedly invested $750 million to build their database of street addresses and directions. Digital Globe spent $500 million to launch their own satellite to improve on government-supplied imagery.) NavTeq has gone so far as to imitate Intel's familiar Intel Inside logo: Cars with navigation systems bear the imprint, "NavTeq Onboard." Data is indeed the Intel Inside of these applications, a sole source component in systems whose software infrastructure is largely open source or otherwise commodified.

The now hotly contested web mapping arena demonstrates how a failure to understand the importance of owning an application's core data will eventually undercut its competitive position. MapQuest pioneered the web mapping category in 1995, yet when Yahoo!, and then Microsoft, and most recently Google, decided to enter the market, they were easily able to offer a competing application simply by licensing the same data.

Contrast, however, the position of Amazon.com. Like competitors such as Barnesandnoble.com, its original database came from ISBN registry provider R.R. Bowker. But unlike MapQuest, Amazon relentlessly enhanced the data, adding publisher-supplied data such as cover images, table of contents, index, and sample material. Even more importantly, they harnessed their users to annotate the data, such that after ten years, Amazon, not Bowker, is the primary source for bibliographic data on books, a reference source for scholars and librarians as well as consumers. Amazon also introduced their own proprietary identifier, the ASIN, which corresponds to the ISBN where one is present, and creates an equivalent namespace for products without one. Effectively, Amazon "embraced and extended" their data suppliers.

Imagine if MapQuest had done the same thing, harnessing their users to annotate maps and directions, adding layers of value. It would have been much more difficult for competitors to enter the market just by licensing the base data.

The recent introduction of Google Maps provides a living laboratory for the competition between application vendors and their data suppliers. Google's lightweight programming model has led to the creation of numerous value-added services in the form of mashups that link Google Maps with other internet-accessible data sources. Paul Rademacher's housingmaps.com, which combines Google Maps with Craigslist apartment rental and home purchase data to create an interactive housing search tool, is the pre-eminent example of such a mashup.

At present, these mashups are mostly innovative experiments, done by hackers. But entrepreneurial activity follows close behind. And already, one can see that for at least one class of developer, Google has taken the role of data source away from Navteq and inserted themselves as a favored intermediary. We expect to see battles between data suppliers and application vendors in the next few years, as both realize just how important certain classes of data will become as building blocks for Web 2.0 applications.

The race is on to own certain classes of core data: location, identity, calendaring of public events, product identifiers and namespaces. In many cases, where there is significant cost to create the data, there may be an opportunity for an Intel Inside style play, with a single source for the data. In others, the winner will be the company that first reaches critical mass via user aggregation, and turns that aggregated data into a system service.

For example, in the area of identity, PayPal, Amazon's 1-click, and the millions of users of communications systems, may all be legitimate contenders to build a network-wide identity database. (In this regard, Google's recent attempt to use cell phone numbers as an identifier for Gmail accounts may be a step towards embracing and extending the phone system.) Meanwhile, startups like Sxip are exploring the potential of federated identity, in quest of a kind of "distributed 1-click" that will provide a seamless Web 2.0 identity subsystem. In the area of calendaring, EVDB is an attempt to build the world's largest shared calendar via a wiki-style architecture of participation. While the jury's still out on the success of any particular startup or approach, it's clear that standards and solutions in these areas, effectively turning certain classes of data into reliable subsystems of the "internet operating system", will enable the next generation of applications.

A further point must be noted with regard to data, and that is user concerns about privacy and their rights to their own data. In many of the early web applications, copyright is only loosely enforced. For example, Amazon lays claim to any reviews submitted to the site, but in the absence of enforcement, people may repost the same review elsewhere. However, as companies begin to realize that control over data may be their chief source of competitive advantage, we may see heightened attempts at control.

Much as the rise of proprietary software led to the Free Software movement, we expect the rise of proprietary databases to result in a Free Data movement within the next decade. One can see early signs of this countervailing trend in open data projects such as Wikipedia, the Creative Commons, and in software projects like Greasemonkey, which allow users to take control of how data is displayed on their computer.

4. End of the Software Release Cycle

As noted above in the discussion of Google vs. Netscape, one of the defining characteristics of internet era software is that it is delivered as a service, not as a product. This fact leads to a number of fundamental changes in the business model of such a company:

1. Operations must become a core competency. Google's or Yahoo!'s expertise in product development must be matched by an expertise in daily operations. So fundamental is the shift from software as artifact to software as service that the software will cease to perform unless it is maintained on a daily basis. Google must continuously crawl the web and update its indices, continuously filter out link spam and other attempts to influence its results, continuously and dynamically respond to hundreds of millions of asynchronous user queries, simultaneously matching them with context-appropriate advertisements.

   It's no accident that Google's system administration, networking, and load balancing techniques are perhaps even more closely guarded secrets than their search algorithms. Google's success at automating these processes is a key part of their cost advantage over competitors.

   It's also no accident that scripting languages such as Perl, Python, PHP, and now Ruby, play such a large role at web 2.0 companies. Perl was famously described by Hassan Schroeder, Sun's first webmaster, as "the duct tape of the internet." Dynamic languages (often called scripting languages and looked down on by the software engineers of the era of software artifacts) are the tool of choice for system and network administrators, as well as application developers building dynamic systems that require constant change.

2. Users must be treated as co-developers, in a reflection of open source development practices (even if the software in question is unlikely to be released under an open source license.) The open source dictum, "release early and release often" in fact has morphed into an even more radical position, "the perpetual beta," in which the product is developed in the open, with new features slipstreamed in on a monthly, weekly, or even daily basis. It's no accident that services such as Gmail, Google Maps, Flickr, del.icio.us, and the like may be expected to bear a "Beta" logo for years at a time.

   Real time monitoring of user behavior to see just which new features are used, and how they are used, thus becomes another required core competency. A web developer at a major online service remarked: "We put up two or three new features on some part of the site every day, and if users don't adopt them, we take them down. If they like them, we roll them out to the entire site."

   Cal Henderson, the lead developer of Flickr, recently revealed that they deploy new builds up to every half hour. This is clearly a radically different development model! While not all web applications are developed in as extreme a style as Flickr, almost all web applications have a development cycle that is radically unlike anything from the PC or client-server era. It is for this reason that a recent ZDnet editorial concluded that Microsoft won't be able to beat Google: "Microsoft's business model depends on everyone upgrading their computing environment every two to three years. Google's depends on everyone exploring what's new in their computing environment every day."

While Microsoft has demonstrated enormous ability to learn from and ultimately best its competition, there's no question that this time, the competition will require Microsoft (and by extension, every other existing software company) to become a deeply different kind of company. Native Web 2.0 companies enjoy a natural advantage, as they don't have old patterns (and corresponding business models and revenue sources) to shed.

A Web 2.0 Investment Thesis Venture capitalist Paul Kedrosky writes: "The key is to find the actionable investments where you disagree with the consensus". It's interesting to see how each Web 2.0 facet involves disagreeing with the consensus: everyone was emphasizing keeping data private, Flickr/Napster/et al. make it public. It's not just disagreeing to be disagreeable (pet food! online!), it's disagreeing where you can build something out of the differences. Flickr builds communities, Napster built breadth of collection. Another way to look at it is that the successful companies all give up something expensive but considered critical to get something valuable for free that was once expensive. For example, Wikipedia gives up central editorial control in return for speed and breadth. Napster gave up on the idea of "the catalog" (all the songs the vendor was selling) and got breadth. Amazon gave up on the idea of having a physical storefront but got to serve the entire world. Google gave up on the big customers (initially) and got the 80% whose needs weren't being met. There's something very aikido (using your opponent's force against them) in saying "you know, you're right--absolutely anyone in the whole world CAN update this article. And guess what, that's bad news for you." --Nat Torkington

5. Lightweight Programming Models

Once the idea of web services became au courant, large companies jumped into the fray with a complex web services stack designed to create highly reliable programming environments for distributed applications.

But much as the web succeeded precisely because it overthrew much of hypertext theory, substituting a simple pragmatism for ideal design, RSS has become perhaps the single most widely deployed web service because of its simplicity, while the complex corporate web services stacks have yet to achieve wide deployment.

Similarly, Amazon.com's web services are provided in two forms: one adhering to the formalisms of the SOAP (Simple Object Access Protocol) web services stack, the other simply providing XML data over HTTP, in a lightweight approach sometimes referred to as REST (Representational State Transfer). While high value B2B connections (like those between Amazon and retail partners like ToysRUs) use the SOAP stack, Amazon reports that 95% of the usage is of the lightweight REST service.

This same quest for simplicity can be seen in other "organic" web services. Google's recent release of Google Maps is a case in point. Google Maps' simple AJAX (Javascript and XML) interface was quickly decrypted by hackers, who then proceeded to remix the data into new services.

Mapping-related web services had been available for some time from GIS vendors such as ESRI as well as from MapQuest and Microsoft MapPoint. But Google Maps set the world on fire because of its simplicity. While experimenting with any of the formal vendor-supported web services required a formal contract between the parties, the way Google Maps was implemented left the data for the taking, and hackers soon found ways to creatively re-use that data.

There are several significant lessons here:

1. Support lightweight programming models that allow for loosely coupled systems. The complexity of the corporate-sponsored web services stack is designed to enable tight coupling. While this is necessary in many cases, many of the most interesting applications can indeed remain loosely coupled, and even fragile. The Web 2.0 mindset is very different from the traditional IT mindset!
2. Think syndication, not coordination. Simple web services, like RSS and REST-based web services, are about syndicating data outwards, not controlling what happens when it gets to the other end of the connection. This idea is fundamental to the internet itself, a reflection of what is known as the end-to-end principle.
3. Design for "hackability" and remixability. Systems like the original web, RSS, and AJAX all have this in common: the barriers to re-use are extremely low. Much of the useful software is actually open source, but even when it isn't, there is little in the way of intellectual property protection. The web browser's "View Source" option made it possible for any user to copy any other user's web page; RSS was designed to empower the user to view the content he or she wants, when it's wanted, not at the behest of the information provider; the most successful web services are those that have been easiest to take in new directions unimagined by their creators. The phrase "some rights reserved," which was popularized by the Creative Commons to contrast with the more typical "all rights reserved," is a useful guidepost.

Innovation in Assembly

Lightweight business models are a natural concomitant of lightweight programming and lightweight connections. The Web 2.0 mindset is good at re-use. A new service like housingmaps.com was built simply by snapping together two existing services. Housingmaps.com doesn't have a business model (yet)--but for many small-scale services, Google AdSense (or perhaps Amazon associates fees, or both) provides the snap-in equivalent of a revenue model.

These examples provide an insight into another key web 2.0 principle, which we call "innovation in assembly." When commodity components are abundant, you can create value simply by assembling them in novel or effective ways. Much as the PC revolution provided many opportunities for innovation in assembly of commodity hardware, with companies like Dell making a science out of such assembly, thereby defeating companies whose business model required innovation in product development, we believe that Web 2.0 will provide opportunities for companies to beat the competition by getting better at harnessing and integrating services provided by others.

6. Software Above the Level of a Single Device

One other feature of Web 2.0 that deserves mention is the fact that it's no longer limited to the PC platform. In his parting advice to Microsoft, long time Microsoft developer Dave Stutz pointed out that "Useful software written above the level of the single device will command high margins for a long time to come."

Of course, any web application can be seen as software above the level of a single device. After all, even the simplest web application involves at least two computers: the one hosting the web server and the one hosting the browser. And as we've discussed, the development of the web as platform extends this idea to synthetic applications composed of services provided by multiple computers.

But as with many areas of Web 2.0, where the "2.0-ness" is not something new, but rather a fuller realization of the true potential of the web platform, this phrase gives us a key insight into how to design applications and services for the new platform.

To date, iTunes is the best exemplar of this principle. This application seamlessly reaches from the handheld device to a massive web back-end, with the PC acting as a local cache and control station. There have been many previous attempts to bring web content to portable devices, but the iPod/iTunes combination is one of the first such applications designed from the ground up to span multiple devices. TiVo is another good example.

iTunes and TiVo also demonstrate many of the other core principles of Web 2.0. They are not web applications per se, but they leverage the power of the web platform, making it a seamless, almost invisible part of their infrastructure. Data management is most clearly the heart of their offering. They are services, not packaged applications (although in the case of iTunes, it can be used as a packaged application, managing only the user's local data.) What's more, both TiVo and iTunes show some budding use of collective intelligence, although in each case, their experiments are at war with the IP lobby's. There's only a limited architecture of participation in iTunes, though the recent addition of podcasting changes that equation substantially.

This is one of the areas of Web 2.0 where we expect to see some of the greatest change, as more and more devices are connected to the new platform. What applications become possible when our phones and our cars are not consuming data but reporting it? Real time traffic monitoring, flash mobs, and citizen journalism are only a few of the early warning signs of the capabilities of the new platform.

7. Rich User Experiences

As early as Pei Wei's Viola browser in 1992, the web was being used to deliver "applets" and other kinds of active content within the web browser. Java's introduction in 1995 was framed around the delivery of such applets. JavaScript and then DHTML were introduced as lightweight ways to provide client side programmability and richer user experiences. Several years ago, Macromedia coined the term "Rich Internet Applications" (which has also been picked up by open source Flash competitor Laszlo Systems) to highlight the capabilities of Flash to deliver not just multimedia content but also GUI-style application experiences.

However, the potential of the web to deliver full scale applications didn't hit the mainstream till Google introduced Gmail, quickly followed by Google Maps, web based applications with rich user interfaces and PC-equivalent interactivity. The collection of technologies used by Google was christened AJAX, in a seminal essay by Jesse James Garrett of web design firm Adaptive Path. He wrote:

"Ajax isn't a technology. It's really several technologies, each flourishing in its own right, coming together in powerful new ways. Ajax incorporates:

• standards-based presentation using XHTML and CSS;
• dynamic display and interaction using the Document Object Model;
• data interchange and manipulation using XML and XSLT;
• asynchronous data retrieval using XMLHttpRequest;
• and JavaScript binding everything together."

Web 2.0 Design Patterns In his book, A Pattern Language, Christopher Alexander prescribes a format for the concise description of the solution to architectural problems. He writes: "Each pattern describes a problem that occurs over and over again in our environment, and then describes the core of the solution to that problem, in such a way that you can use this solution a million times over, without ever doing it the same way twice." The Long Tail Small sites make up the bulk of the internet's content; narrow niches make up the bulk of internet's the possible applications. Therefore: Leverage customer-self service and algorithmic data management to reach out to the entire web, to the edges and not just the center, to the long tail and not just the head. Data is the Next Intel Inside Applications are increasingly data-driven. Therefore: For competitive advantage, seek to own a unique, hard-to-recreate source of data. Users Add Value The key to competitive advantage in internet applications is the extent to which users add their own data to that which you provide. Therefore: Don't restrict your "architecture of participation" to software development. Involve your users both implicitly and explicitly in adding value to your application. Network Effects by Default Only a small percentage of users will go to the trouble of adding value to your application. Therefore: Set inclusive defaults for aggregating user data as a side-effect of their use of the application. Some Rights Reserved. Intellectual property protection limits re-use and prevents experimentation. Therefore: When benefits come from collective adoption, not private restriction, make sure that barriers to adoption are low. Follow existing standards, and use licenses with as few restrictions as possible. Design for "hackability" and "remixability." The Perpetual Beta When devices and programs are connected to the internet, applications are no longer software artifacts, they are ongoing services. Therefore: Don't package up new features into monolithic releases, but instead add them on a regular basis as part of the normal user experience. Engage your users as real-time testers, and instrument the service so that you know how people use the new features. Cooperate, Don't Control Web 2.0 applications are built of a network of cooperating data services. Therefore: Offer web services interfaces and content syndication, and re-use the data services of others. Support lightweight programming models that allow for loosely-coupled systems. Software Above the Level of a Single Device The PC is no longer the only access device for internet applications, and applications that are limited to a single device are less valuable than those that are connected. Therefore: Design your application from the get-go to integrate services across handheld devices, PCs, and internet servers.

AJAX is also a key component of Web 2.0 applications such as Flickr, now part of Yahoo!, 37signals' applications basecamp and backpack, as well as other Google applications such as Gmail and Orkut. We're entering an unprecedented period of user interface innovation, as web developers are finally able to build web applications as rich as local PC-based applications.

Interestingly, many of the capabilities now being explored have been around for many years. In the late '90s, both Microsoft and Netscape had a vision of the kind of capabilities that are now finally being realized, but their battle over the standards to be used made cross-browser applications difficult. It was only when Microsoft definitively won the browser wars, and there was a single de-facto browser standard to write to, that this kind of application became possible. And while Firefox has reintroduced competition to the browser market, at least so far we haven't seen the destructive competition over web standards that held back progress in the '90s.

We expect to see many new web applications over the next few years, both truly novel applications, and rich web reimplementations of PC applications. Every platform change to date has also created opportunities for a leadership change in the dominant applications of the previous platform.

Gmail has already provided some interesting innovations in email, combining the strengths of the web (accessible from anywhere, deep database competencies, searchability) with user interfaces that approach PC interfaces in usability. Meanwhile, other mail clients on the PC platform are nibbling away at the problem from the other end, adding IM and presence capabilities. How far are we from an integrated communications client combining the best of email, IM, and the cell phone, using VoIP to add voice capabilities to the rich capabilities of web applications? The race is on.

It's easy to see how Web 2.0 will also remake the address book. A Web 2.0-style address book would treat the local address book on the PC or phone merely as a cache of the contacts you've explicitly asked the system to remember. Meanwhile, a web-based synchronization agent, Gmail-style, would remember every message sent or received, every email address and every phone number used, and build social networking heuristics to decide which ones to offer up as alternatives when an answer wasn't found in the local cache. Lacking an answer there, the system would query the broader social network.

A Web 2.0 word processor would support wiki-style collaborative editing, not just standalone documents. But it would also support the rich formatting we've come to expect in PC-based word processors. Writely is a good example of such an application, although it hasn't yet gained wide traction.

Nor will the Web 2.0 revolution be limited to PC applications. Salesforce.com demonstrates how the web can be used to deliver software as a service, in enterprise scale applications such as CRM.

The competitive opportunity for new entrants is to fully embrace the potential of Web 2.0. Companies that succeed will create applications that learn from their users, using an architecture of participation to build a commanding advantage not just in the software interface, but in the richness of the shared data.

Core Competencies of Web 2.0 Companies

In exploring the seven principles above, we've highlighted some of the principal features of Web 2.0. Each of the examples we've explored demonstrates one or more of those key principles, but may miss others. Let's close, therefore, by summarizing what we believe to be the core competencies of Web 2.0 companies:

• 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

The next time a company claims that it's "Web 2.0," test their features against the list above. The more points they score, the more they are worthy of the name. Remember, though, that excellence in one area may be more telling than some small steps in all seven.

Tim O'Reilly
O’Reilly Media, Inc., tim@oreilly.com
President and CEO