Four Things to Know about Web 2.0

Four Things to Know about Web 2.0

Earlier this week, I watched the livestream of the Web 2.0 Summit in San Francisco.  (Summary of interview with Michael Dell, Steve Ballmer, Mary Meeker and Google’s Sergey Brin and Vic Gundotra here and here.) If you’re confused about what the term Web 2.0 means and which companies can be considered Web 2.0 companies, check out Tim O’Reilly’s 2008 article on the power of real time enterprise (yeah, he was way ahead of the curve on this one).

According to O’Reilly, Web 2.0 organizations are those that are “infused with IT in such a way that it leads to qualitative change in their entire business.” His article describes the way that companies like Google and WalMart use data to build real-time systems that sense, process and respond to explicit and implicit user inputs and ultimately, drive decision making.

Here are four things to know about the current state of Web 2.0, which companies are driving innovation and where it’s headed:

Facebook is the Web 2.0 company to beat, even Google knows that

Sometimes what you don’t say is more important than what you do say, and the name Facebook was noticeably absent from John Battelle’s interview with Google’s Sergey Brin and Vic Gundotra.  That’s not to say that the two didn’t note that “the incumbent” social network definitely has the advantage over Google +, but neither acknowledged their competitor directly and both seemed to struggle to articulate how they were going to gain as many users as Facebook on Google + or why people should switch social networks.

Other Web 2.0 Summit attendees were more forthcoming with their praise for—or fear of–the web giant. (I think Facebook was mentioned in every interview at the conference.)  Most notably, Ben Horowitz, co-founder of venture capital firm Andreeson-Horowitz said that Facebook is the best run company in technology and Mark Zuckerberg is the best new CEO he’s seen in a long time.

Mobile payments and eCommerce are the next big things

Although online retail only accounts for 5% of overall retail, companies like Visa and American Express are taking note of the shift in consumer thinking and spending habits.

“Commerce you do behind your desktop has been the way people traditionally think about ecommerce, but because people carry the Internet with them now, the only difference between online and offline commerce in the future will be ‘Can I grab that product physically or will I digitally download it and have it shipped to me?’” Dan Schulman, group president of enterprise growth at American Express said at the conference.

Expect to see both companies take a leading role in the ecommerce and mobile payments space (both supported Google Wallet at launch), especially where data security and customer data is concerned.  But perhaps the most important thing to note about online retail is the amount of data that can be gleaned from each transaction; and that data that can be used for re-targeting customers through advertising and building better marketing campaigns.  In fact, transaction data is so rich that Trialpay CEO Alex Rampell thinks companies that handle transactions should profit from the data alone, not the transaction fees.

Data is knowledge and knowledge is power

The theme of this year’s Web 2.0 Summit was The Data Frame.  Whether it was Aileen Lee talking about how startups like Rent the Runway are using data to better understand their customers and make decisions a la Billy Bean, Hilary Mason calling us out for sharing content that makes us look good, but reading content that feeds our guiltiest pleasures, or Mary Meeker blowing our minds with the growth of the tech industry versus the decline of the economy, it was clear that the company that knows the most about its customers—or potential customers—and uses that data to make informed, strategic business decisions, wins.

He who takes the enterprise takes it all

The enterprise space is the one data driven area that Web 2.0 companies have yet to figure out.  Or maybe it’s that the enterprise space has yet to figure out Web 2.0.  Either way, companies like Dell, Microsoft and even Google are vying for the attention—and money–of enterprise companies.  Michael Dell indicated that his company will be making a play for dominance in the healthcare industry; and Ballmer boldly proclaimed that Microsoft has already overtaken Google in the enterprise applications arena, a claim that Brin and Gundotra quietly discredited by taking a survey of how many people in the Web 2.0 Summit audience use Google apps at work. (Hint: Almost everyone)

Whether it’s one of the three aforementioned companies or a company to be named later, there’s a lot of money to be made in helping businesses connect disparate departments and programs to use a common set of information, metrics and measures to run the company. The company that wins Enterprise 2.0 could easily rule all.

History or future

Since the tech industry changes so quickly and the term Web 2.0 has been around for a few years, many people think Web 2.0 is passé. I think they’re wrong.  Web 2.0 companies and technologies are influencing the way we live and work now more than ever, and I believe will continue to do so for the foreseeable future.

Source: Experts Exchange

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