Friday, September 07, 2007

How cool is Web 1.5

Definitions aside, what if we take the best of 1.0 and 2.0 and throw the crap away.

Think about it - all the massively profitable companies from the Web 1.0 world are largely transactional companies - Ebay, Amazon, Expedia, Google, (insert any billion plus dollar company here)... These are real companies with real products and a real business model - and they make money the good old way - just sell stuff people want. Sure - Google is not transactional per se - but, arguably, it does offer a product customer wants, i.e. "information"

Now - moving on to Web 2.0 - we have YouTube, all social networking sites, most of Y! properties, millions of blogs and a whole bunch of other sites profiled on Tech Crunch. These are the sites where most of the engagement, page-views, energy, VC money and start-up activity is. But, I can think of hardly one site that actually has demonstrated the ability to make profits. Yeah - You Tube did sell for a billion six-fifty and Facebook valuations seem to many many times more - but, profits - we don't know and the jury is still out whether those are sane valuations anyway.

The point is that while Web 2.0 does really well to give users a voice, engage them through RIAs and actively pushes the envelope on web innovation - it has seldom translated to making profits. Which makes me wonder - "Should we rather take a Web 1.0 product and combine it with Web 2.0 marketing? - i.e. give them a pretty face, give our users a voice, engage them and enable them to be active advocates of your product and keep iterating?"

Case in point - Kayak (same ol' travel product, but smarter and funner), 37 signals (kickass product + fanatic users), Google Maps (a simple, but real product + viral distribution), amazon (your stuff, our store)., facebook (same old social networking + crowd-source apps).

I am not giving up on social networking sites. The jury is still out on whether all the gazillion or so user-engagement hours are monetizable? The argument of course is that these eye-balls have been monetized on TVand they are are only shifting online. The problem is that this money should have never been spent on TV in the first place. TV got the dollars because marketers had full-time jobs to do and could hardly ever measure the ROI of their investments. And there in lies the bane of the web, ROI is measurable and its hardly ever positive in the short-term. Which brings us back to Web 1.0 - sell a real product, but please please - sell it well - Web 2.0 style

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