Chapter 8: Web 2.

0 in business and society

Introduction

Business in Society

 One of the most exciting recent developments in e-business is the emergence of what is
termed ‘web 2.0’.
 It is seen as the second generation of the web and, as such, a stepwise enhancement of
earlier ways of doing e-business.
 Whereas web 1.0 design emphasised transactions and simple access to information, web 2.0
stresses user interaction and large- scale participation.
 Pioneering websites, such as Facebook, YouTube and Twitter, are being valued in billions of
dollars, but have yet to show a profit, leading pessimists to fear a repeat of the dot.com
boom (and eventual bust).
 Is web 2.0 the real thing or is it yet another case of technology hype?
 The term ‘web 2.0’ was famously first used at a conference in 2004 by technologist Tim
O’Reilly to describe new developments in web technology.
 Web 2.0 is the network as platform, spanning all connected devices
 Web 2.0 applications are those that make the most of the intrinsic advantages of that
platform:
• delivering software as a continually-updated service that gets better the more
people use it, consuming and remixing data from multiple sources, including
individual users, providing their own data and services in a form that allows remixing
by others creating network effects through an "architecture of participation," going
beyond the page metaphor of Web 1.0 to deliver rich user experiences.
 The companies that had survived the collapse seemed to have some things in common.
 The bursting of the dot-com bubble in the autumn 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.
 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.
 The term "Web 2.0" has clearly taken hold, with more than 9.5 million citations in Google
(definition posted on the Web on September 2005; 135 million citations as of February
2007).
 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 is an attempt to clarify just what is meant by Web 2.0.
 In their initial brainstorming, they formulated their sense of Web 2.0 by example:
 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
 Some of the applications we identified as Web 2.0, like Napster and BitTorrent, are not even
properly web applications!
 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.
• At the first Web 2.0 conference, in October 2004, they 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.
• 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.
• At the first Web 2.0 conference, in October 2004, they listed a preliminary set of
principles in our opening talk.
• The first of those principles was "The web as platform".
• Two of their 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.
• The Web as platform - Akamai
 If you use the Internet for anything – eCommerce, enterprise cloud
computing, software downloads, Web marketing or HD video - you've
probably used Akamai's services without even knowing it.
 Akamai plays a critical role in making the Internet work for business.
 The Internet was never designed to do all that we ask of it today.
 A network of thousands of networks with no common standards, the
Internet is complicated, expensive and labour intensive for companies to
work with.
 Akamai's mission is to expand and evolve the connected world.
 Akamai’s Intelligent Internet PlatformTM addresses these challenges and
makes it easier for companies to be successful online by ensuring
performance, instant scalability, robust security and useful data.
 Made up of nearly one hundred thousand servers, deployed in 72 countries
and spanning most of the networks within the Internet, these servers are all
controlled by Akamai software that is constantly monitoring Internet
conditions.
 The platform makes millions of real-time adjustments in response to
congestion, security threats and network failures to ensure there is no
impact to our customers.
 Today Akamai handles tens of billions of daily Web interactions for
companies like Audi, NBC, and Fujitsu, and organizations like the U.S.
Department of Defense and NASDAQ — powering brand new business
models that serve the changing online economy
• Web 2.0 Netscape vs. Google
 If Netscape was the standard bearer for Web 1.0, Google is most certainly
the standard bearer for Web 2.0.
 Netscape framed "the web as platform" in terms of the old software
paradigm: their flagship product was the web browser, a desktop application
 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.
 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.
  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.
 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.
 Without the data, the tools are useless; without the software, the data is
unmanageable.
 Software licensing is irrelevant because the software never need to be
distributed but only performed
 Also because without the ability to collect and manage the data, the
software is of little use.
 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.
 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.
 Both Netscape and Google could be described as software companies.
 It is 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
 Google's fellows are other internet applications like eBay, Amazon, Napster,
and yes, DoubleClick and Akamai.
• Web 2.0 DoubleClick vs. Overture and AdSense
 DoubleClick is (a subsidiary of Google) that develops and provides Internet
ad serving services.
 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,
 that the internet was increasingly being dominated by the top websites as
measured by MediaMetrix and other web ad scoring companies.
  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 favour 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.
 Not surprisingly, other web 2.0 success stories demonstrate this same
behaviour.
 eBay enables 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.
• Web 2.0 BitTorrent
 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.
 Web 2.0 Akamai vs BitTorrent
 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.
 Web 2.0 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.
• 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.
• 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.
• Wikipedia, an online encyclopaedia is based on the unlikely notion that an entry can
be added by any web user, and edited by any other
• It 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!
• One of the most highly touted features of the Web 2.0 era is the rise of blogging. RSS
 Web 2.0 Data is what matters
• 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.
• The 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.
 Web 2.0 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:
 Operations must become a core competency.
 Google's or Yahoo!'s expertise in product development must be
matched by an expertise in daily operations.
 Google must continuously crawl the web and update its indices
 It must continuously filter out link spam and other attempts to
influence its results
 It must continuously and dynamically respond to hundreds of
millions of asynchronous user queries and simultaneously matching
them with context appropriate advertisements.
 Users must be treated as co-developers, in a reflection of open source
development practices.
 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, and
the like may be expected to bear a "Beta" logo for years at a time.
• Web 2.0 Lightweight programming models
 The new lightweight programming models similarly make fewer demands on
users’ machines but still provide a rich user experience.
 They do this above the level of a single device, such that the same (or very
similar) application runs on laptops, personal digital assistants (PDAs) and
mobile phones.
 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.
• These developments have been driven by a variety of people, with varying
motivations:
  web evangelists who wanted to see the web escape the grasp of the rather
conservative large corporations
 entrepreneurs attracted by the potential for profit
 developers eager to make their mark with the new technologies
 users who were keen to explore attractive (more or less) free applications
and services
 conventional firms keen to explore new markets and new collaboration
mechanisms.
 Web 2.0 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.“
• 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.
• To date, iTunes is the best example 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.
• iTunes is not web applications per se, but it leverages 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.
 Web 2.0 – Core Competencies of Web 2.0 Companies
• The core competencies of Web 2.0 companies entail:
• 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.

Collaborative components of web 2.0 Blogs and Blogging

 The key hallmark of web 2.0 is collaboration and participation, which is facilitated by various
applications or collaborative components.
 These include blogs, social networking sites, wikis, widgets and sites that
 permit content-sharing, among others.
 Blogs and Blogging
o Short for ‘web logs’, blogs are personal pages containing diaries and opinions on
topical issues.
o Blogs are often focused on a single topic, and can be interlinked with comments and
other threads.
o Blog hosting sites are abundant and publishing is simple and free.
o Collaborative components of web 2.0 Blogs and blogging
o Blogs and blogging
o ‘Blogs’ (web logs) give an easy method of regularly publishing web pages which are
best described as online journals, diaries or news or events listings.
o Many blogs provide commentary or news on a particular subject; others function as
more personal online diaries.
o A typical blog combines text, images, and links to other blogs, web pages, and other
media related to its topic.
o The capability for readers to leave comments in an interactive format is an
important part of many blogs.
o Feedback comments from other sites are also sometimes incorporated.
o Frequency can be hourly, daily, weekly or less frequently, but several updates
 An example of a useful blog which can keep marketing professionals up-to-date about
business developments is the E-consultancy blog (www.econsultancy.com/news-blog).
 Business blogs are created by people within an organization.
o They can be useful in showing the expertise of those within the organization, but
need to be carefully controlled to avoid releasing damaging information.
o An example of a business blog used to showcase the expertise of its analysts is the
Jupiter Research Analyst Weblogs (http://weblogs.jupiterresearch.com)
 Services to enable blogging
o There are many free services which enable anyone to blog (for example
www.blogger.com which was purchased by Google in 2003). Blogs were traditionally
accessed through online tools (e.g. www.bloglines.com, www.blogpulse.com)
o The predecessors of blogs are the internet forums and bulletin boards that
originated in the 1990s.
o There are about 100 million active blogs, and around 200 million ‘dead’ ones.
o It is estimated that 120,000 new blogs are created daily, a large number of which are
‘spam blogs’;
o That is, blogs with fake content or articles that are used to trick search engines and
attract users who generate ad revenue by mistakenly visiting these sites.
o And it is not just individuals who are using blogs.
o There are corporate blogs as well, in which businesses attempt to have
conversations with customers, making it more than just a marketing or public
relations effort.
 o These blogs are seen as a way to connect directly with dedicated or interested
customers.
o An important dimension of blogs is that they offer a fascinating alternative to mass
media.
o No longer is the public dependent upon conventional news media that may be
highly consolidated and owned by large corporations or governments.
o Blogs are often the first media to ‘break’ news
o Bloggers report on events that are just starting (e.g. earthquakes, riots) where the
blogger is on the scene long before professional journalists arrive.
o Some blogs, such as the Huffington Post (www.huffingtonpost.com), have built up a
huge international following, based on their style of reporting and opinions, and are
accepted as a reliable and valuable part of the news media landscape.

Collaborative components of web 2.0 Social Networking Sites - Introduction

 Since their introduction, social network sites (SNSs) such as MySpace, Facebook, Twitter,
Cyworld, and Bebo have attracted millions of users, many of whom have integrated these
sites into their daily practices.
 As of this writing, there are hundreds of SNSs, with various technological affordances,
supporting a wide range of interests and practices.
 While their key technological features are fairly consistent, the cultures that emerge around
SNSs are varied.
 Most sites support the maintenance of pre‐existing social networks
 Others help strangers connect based on shared interests, political views, or activities.

Collaborative components of web 2.0 Social Networking Sites - Definition

o Some sites cater to diverse audiences, while others attract people based on common
language or shared racial, sexual, religious, or nationality‐based identities.
o Sites also vary in the extent to which they incorporate new information and
communication tools, such as mobile connectivity, blogging, and photo/video‐sharing.
o Danah M. Boyd/Nicole B. Ellison(2007) define social network sites as web ‐based services
that allow individuals to (1) construct a public or semi ‐public profile within a bounded
system, (2) articulate a list of other users with whom they share a connection, and (3)
view and traverse their list of connections and those made by others within the system.
o The nature and nomenclature of these connections may vary from site to site.
o Danah M. Boyd/Nicole B. Ellison(2007) use the term "social network site" to describe
this phenomenon
o The term "social networking sites" also appears in public discourse
o The two terms are often used interchangeably.
o Danah M. Boyd/Nicole B. Ellison chose not to employ the term "networking" for two
reasons: emphasis and scope.
o "Networking" emphasizes relationship initiation, often between strangers.
o While networking is possible on these sites, it is not the primary practice on many of
them, nor is it what differentiates them from other forms of computer ‐mediated
communication (CMC).
o What makes social network sites unique is not that they allow individuals to meet
strangers, but rather that they enable users to articulate and make visible their social
networks.
o This can result in connections between individuals that would not otherwise be made,
but that is often not the goal, and these meetings are frequently between "latent ties"
(Haythornthwaite, 2005) who share some offline connection.
o On many of the large SNSs, participants are not necessarily "networking" or looking to
meet new people; instead, they are primarily communicating with people who are
already a part of their extended social network.
o To emphasize this articulated social network as a critical organizing feature of these
sites, we label them "social network sites."
o While SNSs have implemented a wide variety of technical features, their backbone
consists of visible profiles that display an articulated list of Friends1 who are also users
of the system.
o Profiles are unique pages where one can "type oneself into being" (Sundén, 2003, p. 3).
o After joining an SNS, an individual is asked to fill out forms containing a series of
questions.
o The profile is generated using the answers to these questions, which typically include
descriptors such as age, location, interests, and an "about me" section.
o Most sites also encourage users to upload a profile photo.
o Some sites allow users to enhance their profiles by adding multimedia content or
modifying their profile's look and feel.
o Others, such as Facebook, allow users to add modules ("Applications") that enhance
their profile.
o Structural variations around visibility and access are one of the primary ways that SNSs
differentiate themselves from each other.
o The visibility of a profile varies by site and according to user discretion.
o By default, profiles on Friendster and Tribe.net are crawled by search engines, making
them visible to anyone, regardless of whether or not the viewer has an account.
o Sites like MySpace allow users to choose whether they want their profile to be public or
"Friends only."
o Facebook takes a different approach—by default, users who are part of the same
"network" can view each other's profiles, unless a profile owner has decided to deny
permission to those in their network.
o After joining a social network site, users are prompted to identify others in the system
with whom they have a relationship.
o The label for these relationships differs depending on the site—popular terms include
"Friends," "Contacts," and "Fans." Most SNSs require bi ‐directional confirmation for
Friendship, but some do not.
o These one‐directional ties are sometimes labeled as "Fans" or "Followers," but many
sites call these Friends as well.
o The term "Friends" can be misleading, because the connection does not necessarily
mean friendship in the everyday vernacular sense, and the reasons people connect are
varied (boyd, 2006a).
o The public display of connections is a crucial component of SNSs.
o The Friends list contains links to each Friend's profile, enabling viewers to traverse the
network graph by clicking through the Friends lists.
o On most sites, the list of Friends is visible to anyone who is permitted to view the profile,
although there are exceptions.
o Most SNSs also provide a mechanism for users to leave messages on their Friends'
profiles. This feature typically involves leaving "comments," although sites employ
various labels for this feature.
o In addition, SNSs often have a private messaging feature similar to webmail.
o Privacy
 Popular press coverage of SNSs has emphasized potential privacy concerns,
primarily concerning the safety of younger users (George, 2006; Kornblum &
Marklein, 2006).
 Researchers have investigated the potential threats to privacy associated with
SNSs.
 In one of the first academic studies of privacy and SNSs, Gross and Acquisti
(2005) analyzed 4,000 Carnegie Mellon University Facebook profiles
 They outlined the potential threats to privacy contained in the personal
information included on the site by students, such as the potential ability to
reconstruct users' social security numbers using information often found in
profiles, such as hometown and date of birth.
 Acquisti and Gross (2006) argue that there is often a disconnect between
students' desire to protect privacy and their behaviors
 This is a theme that is also explored in Stutzman's (2006) survey of Facebook
users and Barnes's (2006) description of the "privacy paradox" that occurs when
teens are not aware of the public nature of the Internet.
 In analyzing trust on social network sites, Dwyer, Hiltz, and Passerini (2007)
argued that trust and usage goals may affect what people are willing to share.
 Facebook users expressed greater trust in Facebook than MySpace users did in
MySpace and thus were more willing to share information on the site.
 Survey data offer a more optimistic perspective on the issue, suggesting that
teens are aware of potential privacy threats online and that many are proactive
about taking steps to minimize certain potential risks.
 Pew found that 55% of online teens have profiles, 66% of whom report that
their profile is not visible to all Internet users (Lenhart & Madden, 2007).
 Of the teens with completely open profiles, 46% reported including at least
some false information.
 Facebook has implemented a framework for privacy in SNSs that they believe
would help resolve these conflicts.
o Currently led by Facebook with 350 million members (as at 2010), these sites have
become phenomenally popular among users of all ages.
o They allow users to share profiles among friends and colleagues, enable messaging and
provide a platform for embedding music and videos, among a growing number of other
features.
o Early social networking sites (e.g. SixDegrees.com and Friendster) struggled to attract
loyal users and determine appropriate business models.
o Indeed, the early history of social networking sites was fairly dismal.

o These problems have not gone away entirely, but success stories such as MySpace and
Facebook are encouraging both entrepreneurs and investors. Indeed, Facebook is now
the second most popular website on the internet (after Google). If it were a nation,
Facebook would be the world’s third most populous country, after China and India.
o Indeed, Facebook is now the second most popular website on the internet (after
Google).
o If it were a nation, Facebook would be the world’s third most populous country, after
China and India.
o In addition to the ‘conventional’ social networking sites that mostly aim to facilitate the
normal social life of individuals, there are more specialised variations.
o These include ‘virtual worlds’, such as Second Life, where individuals and companies can
‘act out’ an alternative reality.
o Somewhat more prosaic are sites such as LinkedIn that leverage career development
and recruitment.
o A recent variant of social networking is micro-blogging, best exemplified by sites such as
Twitter.
o These sites function similarly to blogs but limit the number of characters that people are
allowed to use to communicate their messages.
o The point is to broadcast messages concisely and to large numbers of followers.
o There is a lot of promise for marketing and offering special deals through such sites.
o Twitter was described by the Guardian newspaper as the ‘hottest internet startup on the
planet’.
o Introduced in late 2006, by 2009 it boasted 35 million users and yet employed only 52
staff.
o It allows individuals to ‘follow’ their favourite celebrities (e.g. Stephen Fry (Actor), Oprah
Winfrey (Broadcaster) and, like blogs, it is also useful for ‘breaking news’, and featured
strongly in the 2008 US election and the 2009 riots in Tehran.
o Companies that were experimenting with marketing applications in 2009 included
retailers French Connection and ASOS
o The UK central government was providing 26 Twitter feeds and 1.1 million people were
following the feed from 10 Downing Street.
o One of the most interesting and enticing current problems for social networking sites is
how to monetise them (i.e. how to make a profit from the huge numbers of people
taking advantage of their free services).
o There are a number of difficult questions related to the profitability of social networking
technologies that managers of these sites are currently facing:
  How can they make money without alienating users through excessive
advertising?
 Is there a way to balance users’ privacy with the tendency to use their personal
information for targeted advertising?
 The failure of Facebook’s Beacon recommendation marketing system
speaks to this issue of balance.

 In what appears to be the last of several conclusions to a drawn-out

class action lawsuit regarding Facebook’s now- defunct Beacon
advertising program, a judge has approved a contested settlement, as
Wired reports.
o Facebook will provide $9.5 million to create a “Digital Trust Fund” dedicated to studying
online privacy (minus $3 million for legal fees).
o Beacon automatically showed users’ activity on other web sites to their friends on
Facebook.
o One plaintiff had bought a diamond for his wife, and she found out about it before he
intended her to because Beacon immediately shared the purchase with her.
o Facebook stopped promoting Beacon years ago, but only officially shut it down in 2009
as part of the terms of the settlement last fall.
o Is advertising the only way to turn a profit?
o What sort of investments should be made to upgrade sites to keep them attractive to
users?
 For example, MySpace lost users and, consequently, advertising revenues after it
failed to upgrade its site properly.
o Various business models have been put forward to try to solve the monetisation
problem.
o These include:
 clever, more focused marketing and advertising, including affiliate marketing
 taking a commission on sales of goods and services
 charging developers to load applications onto sites
 selling software as a service
 offering premium services and using the proceeds from these to subsidise free
users (e.g. the Google mail strategy)
 selling users’ data to other companies interested in profiling and selling to them
− these sites hold massive amounts of user data which could be quite valuable
(e.g. Facebook manages more than 25 terabytes of user data every day, which is
equivalent to 1,000 times the volume of post delivered daily by the US Postal
Service). There are huge privacy questions surrounding the resale of these data.
o However, there are other issues in social networking. If these sites become the new
public square, what does this mean for individuals (and, to a lesser extent, firms)?
o What sort of an impression should we, as individuals, give online? To our friends, we
may wish to appear devil-maycare ‘party people’, but to future employers we may wish
to appear more serious (Zimmer (2008) explores the privacy issues further).
o It is too early to comment on the ‘highs and lows’ of creating and maintaining online
social relationships.
o To date, it appears that social networking sites tend to support conventional ‘offline’
friendships.
o In addition to privacy issues, mentioned above, there are the issues of ‘fakesters’
(people who maintain totally inaccurate profiles) and online bullying.
o While fairly harmless for most adults, these can be problematic for younger, more
vulnerable users.
o Wikis
 Wikis are websites that facilitate the simple creation and editing of any number
of connected web pages.
 Their most popular use is for collaborative and community websites.
 They constitute the notion of ‘crowdsourcing’ whereby users can contribute and
share their knowledge of a topic or issue.
 Wikipedia, the online open source encyclopedia, is the most well known wiki but
there are many more, often highly specialised, wikis.
 Their success relies on design principles including openness, incremental
development, convergence of ideas and the interlinking of topics, as well as the
overriding need for quality control of input through careful editing to ensure
that the credibility of a site is maintained.
 Wikis are websites that facilitate the simple creation and editing of any number
of connected web pages.
 Their most popular use is for collaborative and community websites.
 They constitute the notion of ‘crowdsourcing’ whereby users can contribute and
share their knowledge of a topic or issue.
 Wikipedia, the online open source encyclopedia, is the most well known wiki but
there are many more, often highly specialised, wikis.
 Their success relies on design principles including openness, incremental
development, convergence of ideas and the interlinking of topics, as well as the
overriding need for quality control of input through careful editing to ensure
that the credibility of a site is maintained.
 Wikis are websites that facilitate the simple creation and editing of any number
of connected web pages.
 Their most popular use is for collaborative and community websites.
 They constitute the notion of ‘crowdsourcing’ whereby users can contribute and
share their knowledge of a topic or issue.
 Wikipedia, the online open source encyclopedia, is the most well known wiki but
there are many more, often highly specialised, wikis.
 Their success relies on design principles including openness, incremental
development, convergence of ideas and the interlinking of topics, as well as the
overriding need for quality control of input through careful editing to ensure
that the credibility of a site is maintained.
o Content-sharing sites
 Content-sharing sites allow web users to share content such as photos and
videos.
  In addition, users can tag content, provide feedback on the quality of
information, and rate it as well.
 Sites such as Flickr and YouTube are prime examples of these types of sites.
 YouTube in particular is very popular, attracting large numbers of visitors, but it
has yet to find a viable business model, even though it was acquired by Google
for $1.65 billion in 2006.
 It requires careful control of user contributions to avoid content that is
pornographic, defamatory, harassing or illegal in terms of copyright.
 Related to the ‘legal’ content-sharing sites are the mostly ‘illegal’ peer-to-peer
networks or file-sharing sites.
 These highly decentralised networks comprise nodes that share processing and
storage and are mostly associated with sharing music and video files (e.g. KaZaa,
Pirate Bay, Gnutella).
 They are constantly prosecuted for copyright violation by music and film
companies.
o User tagging, rating and reviewing
 While web 2.0 embodies user participation and collaboration, this is not limited
to the contribution of complete articles, music files or videos.
 Just as important are the reviews and feedback that users give on products,
services and opinions.
 These provide useful indications to firms (such as Amazon and various
restaurant and travel sites) and consumers.
 They are the views of ‘ordinary’ people and merit a place beside the opinions of
‘expert’ critics.
 In addition to giving ratings, users can also categorise (tag) items regarding their
content and share these tags through sites such as del.icio.us, producing
‘folksonomies’ (or social classifications).
 Delicious (formerly del.icio.us) is a social bookmarking web service for storing,
sharing, and discovering web bookmarks.
 Again, this is the voice of ordinary people classifying products, articles, events or
services in a way that may be very different to that of an expert.
o Mashups
 Mashups combine data from more than one source to produce something new,
typically a new information service.
 They are facilitated by standard application programming interfaces (APIs),
common to web 2.0.
 Examples often involve maps, typically extracted from Google Maps, on which
data is then superimposed.
 An example is chicagocrime.org, which shows how crime is distributed across
the city of Chicago.
 The iGuide travel site takes data from seven sources to provide an interactive
travel guide, including maps and photos as well as extensive information on
flights, hotels and places to visit.
Collaborative components of web 2.0

 Collaborative components of web 2.0 - Open source development

 This is the collaborative development of content (especially software) with a view to making
it freely available.
 This movement began before the introduction of web 2.0 but is certainly facilitated by the
collaborative tools and motivations of web 2.0.
 We will examine this phenomenon in detail in Chapter 9.
  Figure 8.1 is a depiction of web 2.0 in terms of its inputs (mostly from users), mechanisms
and the outcomes that emerge, as well as the building blocks in the outer circle:
o Standards
o Participation
o Decentralisation
o Identity
o user control
o modularity
o openness

Collaborative components of web 2.0 - Business interest in web 2.0

 Commercial companies are also very interested in web 2.0 developments – and not for
leisure pursuits.
 They regard social networking sites, with their large numbers of influential, well- educated
users, as excellent potential marketing and public relations channels.
 Hence, they are keen to get their products and messages ‘out there’.
 Similarly, such sites offer good potential for informal networking with current and future
trading partners.
 These sites are also potentially valuable for internal team building, in terms of building up a
modern and cohesive esprit de corps, which is particularly relevant for teams that are spread
throughout the world and lack physical contact.
 Finally, social networking sites offer companies potential opportunities for recruitment (e.g.
the LinkedIn site, mentioned above).
 Business interest in web 2.0
 Wikis offer good potential for informal networking with current and future trading partners.
 These sites are also potentially valuable for internal team building, in terms of building up a
modern and cohesive esprit de corps, which is particularly relevant for teams that are spread
throughout the world and lack physical contact.
 Finally, social networking sites offer companies potential opportunities for recruitment (e.g.
the LinkedIn site, mentioned above).
 Blogs also offer a new communication channel for external public relations and internal
morale-boosting and cultural shaping.
 For example, an old company that wishes to update its image, or change its sleepy
organisational culture to an energetic ‘can-do’ culture, may well switch its press releases and
internal newsletters to a blog format.
 If they are attractively produced and written in a lively fashion, they could represent a
(relatively cheap) first step towards changing the company.
 Employees outside the public relations function may be paid specifically to produce
favourable blogs.
 Blogs also offer a new communication channel for external public relations and internal
morale-boosting and cultural shaping.
 For example, an old company that wishes to update its image, or change its sleepy
organisational culture to an energetic ‘can-do’ culture, may well switch its press releases and
internal newsletters to a blog format.
 If they are attractively produced and written in a lively fashion, they could represent a
(relatively cheap) first step towards changing the company.
 Employees outside the public relations function may be paid specifically to produce
favourable blogs.
 Similarly, user-generated content and open source development are of great interest to
companies that are searching for cheap and innovative content or further development.
 Enterprise 2.0?
 Currently, large companies such as General Electric, Procter & Gamble, Shell and Airbus are
said to be integrating social networking into their corporate strategies in a trend described
as ‘Enterprise 2.0’.
 Organisations are using these technologies to encourage internal and external
communication and collaboration, to increase productivity, spur innovation and enhance
value.
 However, this is not entirely straightforward as some companies face huge cultural
obstacles.
 It is often difficult for business leaders to accept the openness and free-flow of information
that these technologies make possible.
 However, some argue that, sooner or later, organisations will be forced to accept at least
some of the technologies and think strategically about how they can restructure work,
knowledge sharing and expertise.
 Using these technologies in an organisation normally requires certain adaptations.
 Companies seek the immediacy and ease-of-use that web 2.0 technologies provide, while
redesigning them to offer functionality such as audit capabilities and access and version
controls.
 Web 2.0 technologies also embody serious risks, which companies need to consider before
deciding to adopt them.
 These risks include:
• leakage of sensitive or confidential company data on a social networking site or blog
• fines that accompany data losses or breaches of confidentiality
• reduction in employee productivity if the technologies are used for pleasure rather
than work purposes.