Web 2.0 Managerial Economics

The Evolutionary Web

Managerial Economics in the Web 2.0 World and Beyond

Executive MBA Class 2008

Chance favors only the prepared mind – Louis Pasteur

The Evolutionary Web

• The mostly read only web• 45 Million Global Users – 1996• Focused on Companies• Home Pages• Owning Content• Brittanica Online• HTML, Portals• Web Forms• Directories (taxonomy)• Netscape, eBay• Page Views• Advertising

The customer is monetized

The New World of Collaboration

• Openness – MIT’S Open Course Ware.• Peering – Open Source Linux.• Sharing – VoIP enablement, Multimedia

platform, Mobility e.g. Skype, iPhone• Hearing – WOMM, NPS e.g. Starbucks• Acting Globally and not just as an MNC.

Toyota/Scion’s steps towards this Vision.

Open Source from Microsoft ???????

Web 2.0 & it’s Genesis• Web 0.0 - Technology

– Was Technology Oriented– Enablement of Application Design on www – Informative, Expense side of the Balance Sheet, No ROI

Realization• Web 1.0 - Commerce

– Popularly known as eCommerce– Major force in 90’s for trade/business over the web– ROI Realization– Core competencies of many new-age organization – Amazon,

eBay etc. • Web 2.0 – People and Communities

– Information Age – A movement for self expression

Web 2.0 & it’s Genesis• The term ‘Web 2.0’ introduced by Tim O’Reilly at

a conference in 2004

• ‘Web 2.0’ - an improved form of the World Wide Web

• Emphasizing tools/platforms that enable users to tag, blog, comment, modify, augment, rank etc.

• Notion of The ‘Participatory Web’

• Recipe for Web 2.0:– Web as a platform– Software above a single device– Data as the new Intel inside– Harnessing collective intelligence– Lightweight business models, e.g. SaaS– Rich Internet Applications (RIA, AJAX, RoR)– Mashups (RSS)

Web 2.0 - A Primer

Web 2.0 Key Principles

• Read vs. Read & Write

Web 2.0 – Key Principles

User Generated

Content

Web 2.0 – Key Principles

Experts vs.

Wisdom of Crowds

Web 2.0- Key Principles

80:20V/s

The Long Tail

Web 2.0 - Key Principles

…the content comes to you…

Web 2.0 Landscape

The Evolutionary Web

• The mostly read only web• 45 Million Global Users – 1996• Focused on Companies• Home Pages• Owning Content• Britannica Online• HTML, Portals• Web Forms• Directories (taxonomy)• Netscape, eBay• Page Views• Advertising

The customer is monetized

• The wildly read/write web• 1 Billion Global Users – 2006• Focused on Communities• Blogs• Sharing Content• Wilkipedia• XML, AJAX, RSS• Web Applications/Services• Tagging (folksonomy)• Google, Facebook• CPC/CPM• Word of Mouth

The customer strikes back

Global Business 2.0 ModelsStep 1 : Create a large/focused niche user community

Step 2 : Monetize once the community reaches critical mass

- Sell special services targeted at community (LinkedIn)- Sell services to a large group of SMEs (Salesforce.com)- Sell data to partners (Facebook)- Get a revenue share from transactions (eBay)- Sell advertisements (Google Adwords)- Freemium: Sell premium memberships (Flickr)- Sell your company (Youtube)

Should organizations even careabout Web 2.0 ???

The world we live in..

…the consumer is in control

…….they have unlimited options

…and are avoiding advertising

Pop-up Blocker Do Not Call Registry

Companies must pay attention to the Participation culture

113 million -Blogs tracked by Technorati.com

Who do Consumers Trust ?

The CEO / Ad agencies / marketers

Or “A person like Me or You”i.e. other consumers or peers

2 - New blogs posted every second

Web 2.0 has put consumers in control of the conversation

Every consumer is…

…a Publisher…a Disc Jockey…a Critic…a Movie Director…a Networker…an ENTREPRENEUR

… a broadcaster… and socially hyper-aware

…if organizations want to participate in this conversation, they must acknowledge and facilitate consumer control...

Enterprise 2.0 TrendsHow organisations can harness Web 2.0 ?

Enterprise 2.0 Attributes

• Application of Web 2.0 within the enterprise to solve / improve internal work practices

• Collection of Web 2.0 tools/platforms for increased productivity and information sharing

• Harnessing of COLLECTIVE employee and customer intelligence

• e.g. blogs, wikis, mash-ups, project management tools, Software as a service (SAAS)

• Driver: remote collaboration requirements across different locations / time zones

Anatomy of Enterprise 2.0

Enterprise 2.0 Opportunities• Social Marketing/PR

• 360 Degree Real Time Feedback Mechanisms

• NPS – Net Promoter Scores – Customer WOM

• Direct Sales

• Brand Building

– promotions, advertising on social networks, events– referrals, lead generation

• Mediated Marketing Research

• Viral Marketing

So what comes next ????

"I think there is a world market for maybe five computers." Thomas Watson, chairman of IBM, 1943

"Computers in the future may weigh no more than 1.5 tons."

Popular Mechanics, forecasting the relentless march of science, 1949

"640K ought to be enough for anybody." Bill Gates, 1981 apocryphal

"There is no reason anyone would want a computer in their home."

Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977

The Thing about Predictions...

Crystal Ball Gazing• What is beyond Web 2.0 ?

Pervasive Mobile TechnologyArtificial Intelligence Speech TechnologiesThe Web as an Open Source Database The Web without BrowsersThe Semantic WebCloud ComputingMachines taking over our entire thinking??

The Semantic Web

• A web of data that can be processed directly and indirectly by machines – Tim Berners Lee

RDF – Resource Description FrameworkOWL- Ontology Web LanguageCoIN-Context InterChangeCOWL- Context OWLRML – Rule ML (Extension of HTML, XML)

The Evolutionary Web

• The mostly read only web• 45 Million Global Users – 1996• Focused on Companies• Home Pages• Owning Content• Britannica Online• HTML, Portals• Web Forms• Directories (taxonomy)• Netscape, eBay• Page Views• Advertising

The customer is monetized

• The wildly read/write web• 1 Billion Global Users – 2006• Focused on Communities• Blogs• Sharing Content• Wilkipedia• XML, AJAX, RSS• Web Applications/Services• Tagging (folksonomy)• Google, Facebook• CPC/CPM• Word of Mouth

The customer strikes back

• The read/write/execute web• ?? Billion Global Users – 2010• Focused on Individuals• Lifestreams, Mobility• Consolidating Dynamic Content• The Semantic Web• Widgets; Drag/Drop Mashups• Open Interactive Databases• User Behavior (me-onomy)• iGoogle, Netvibes• User Engagement• Advertainment• Enterprise Mobility

The customer customizes

The age of the Muppies (Mobile Yuppies) has Dawned

The Evolutionary Web

If You Remember just ONE Thing …

Whatever you do,Make sure it’s worth

talking about –And have FUN doing it.

Thank You