Closing Thoughts on Web 2.0 - Ajax, Business Models & More
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Written By Reprise Media | October 11, 2005 | Share This
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[Editor’s Note: Reprise Managing Partners Joshua Stylman and Peter Hershberg recently attended the Web 2.0 show in San Francisco. The following represents a few of their closing thoughts on the conference.]
Big Picture, Grand Scheme, Etc. Etc.
John Battelle, coming of the heels of the launch of his phenomenal new book did a great job as the chair of the show. The program included a healthy mix of industry heavyweights as well as smaller companies. There were hundreds of folks in attendance, with everyone from bloggers to moguls to entrepreneurs roaming the hotel at all hours. The most difficult decision that consistently arose was “Should I sit in on this session or is there an interesting conversation that I can be having in the hallway right now?” Of course, we made sure that we accomplished both during our two and half days at the show.
Ads by Google
It’s long been legend that Google built a killer service on the web and the business model fell into place later. Personally, we don’t think that’s something you can mimic, however, it seems to be trend in Web 2.0. Between the companies we saw at the Launch Pad and various other entrepreneurs we met at the show, it’s evident that the entrepreneurial spirit is being fueled by Google’s greatest asset, what we like to call G-Money.
This currency they can offer companies gives them some leeway to focus on the consumer aspect of their business and “figure out the revenue model later.” While on the one hand, this will undoubtedly be a boon to innovation, we do question the long-term upside on this strategy. If we were spending lots of time and money in launching a new business, we’d want more control over our destinies than AdSense can offer.
While many new companies had very cool technologies/features, almost all of them were going to use Google as a revenue stream. This is reminiscent of a time in the late ’90’s when every aspiring site was going to sign an “anchor tenancy” deal with AOL to ensure that they could attract traffic to their sites. While there is one major distinction between these scenarios (Google pays publishers to syndicate their ads, whereas AOL makes publishers pay for placement within their shell), they’re both akin to being addicted to heroin - you know it’s not good for you, but you get sick the minute you try to kick the habit. Being an AdSense affiliate is not a business model.
Ajax Rules
For those of you that may still be living in Web 1.0 - or just simply aren’t developers - Ajax is a web development technique that is not a technology itself, but a term that refers to the use of a group of technologies together. The benefit is that you can build some sleek, cool stuff. Almost all the new toolsets we saw had some element of Ajax in them. Unlike many so-called widgets of years past, most of these tools are very functional and have a distinct purpose. But…
Are these stand-alone companies?
Joe Kraus, former Excite founder and current JotSpot head had a great sound bite during his session, when he said “a lot of these companies are features wrapped in company clothing.” We suspect that some of these companies are intentionally not “whole” as they expect to get scooped by one of the big guys (read: Flickr, Picasa, etc), while others are really just overestimating the viability of their idea as a standalone service. The one fear we have for some of these entrepreneurs is…why can’t Google, et al build some of these features on their own? Or, at the very least, just open up a web service a la Amazon and let the community take over?
Perhaps this is because there’s no barrier to entry with a lot of the mash-ups we saw. Because content and data are so readily available in Web 2.0 (maps, events, etc) they can all be replicated, sometimes fairly easily. Alternatively, the creators of these new technologies can simply be hired by larger organizations that may want to develop similar technologies.
The Diane Factor
[Editor’s Note: This part is by Josh. We’re leaving Peter’s mom out of this.] Diane is my mom, and always serves as my one woman focus group for me when I’m trying to identify which trends will go mainstream and which won’t. Calling my mom tech savvy is definitely a huge overstatement, although these days she at least knows that you don’t have to go through Google to get to any other web pages. If you walked through Web 2.0, you’d think that Flickr and del.icio.us had tens of millions of users…I guarantee Diane still hasn’t heard of - let alone used - either one. This sentiment was articulated very well by Pierre of Tribe.net, whom I had the benefit of dining with, along with some other folks on Thursday night. Pierre references a sentiment from Fred Wilson which I thought was dead on. Fred had an interesting post on the show where he said:
“In their places we are seeing second derivatives. I heard one business described as Google Maps meets del.icio.us, and another described as Skype meets MySpace. When the first derivative hasn’t fully figured out its long term business model (other than getting bought), the second derivatives are pretty scary.”
And, of course this is coming from a guy who is in fact on the board of del.icio.us. More on this argument here.
A nickel for Your Attention
It has never been more evident that one of the driving forces behind Web 2.0 is data capture. Every behemoth in the 2005 web economy is looking to build a better personalized experience and access to information about YOU is the way they’re going to do it. That’s why despite our point above about these companies lacking revenue, many will still get acquired for the information about their users - if that’s not the case, then we can’t see any reason why MySpace would get acquired for almost $600 million. Personally, we don’t have a problem giving up our information if we know who we’re giving it to and what they’re going to do with it. And, oh year…we want a copy of it too.
That’s exactly what Attentrust.org, a non-profit, is trying to accomplish. The group is being started by Seth Goldstein, a good friend, excellent thinker and the human version of LinkedIn and the always interesting Steve Gillmor, who has rightfully been preaching this for some time. While we don’t know that this group will succeed in their mission, we do know that they are taking the lead on something that needs to happen: making people aware. If you have not checked out Attentrust.org, go do so now and take control of your metadata!
Topics: Reprise Media |
While Joe Kraus has suggested that a lot of the Web 2.0 companies are features wrapped in company clothing, that’s not an exclusively 2.0 characteristic. If you think back to 1999, applications posed as businesses too. Free email was a standalone service for some (Mail.com), video hosting was a standalone service (Earthnoise), RSS technology was its own business entirely (iSyndicate), the list goes on. My agency had a dozen clients who’s individual offerings have since been integrated into the singular package offered by Yahoo! Plus. It was especially obvious back then when you had more than a handful of sites considered to be major portals.