Web 2.0 – Hype or Opportunity?
- Article 7 of 7
- iSight, June 2006
The Internet has revolutionised business life. Whether it’s through the use of email to replace phone and fax or of the web to advertise and sell products, the Internet has transformed commercial life over the last decade.
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But this “circle of friends” means that the company has only recently expanded out of France into Spain and Italy. Explains Kosciusko-Morizet, “Part of our advantage comes from having a large range of goods to keep prices low and a large number of users.” By focusing on only a few countries at a time, rather than aiming for a simultaneous global push, PriceMinister can increase its user base in each country to the critical level necessary for the service to be viable. But this highlights one of the limitations of Web 2.0 – that without a large enough community, the service will fail. Building this community can require considerable time and investment to overcome, unless, like MySpace, the service somehow taps into a particular part of the ‘zeitgeist’.
Sulake, a Finnish company that has developed virtual meeting places primarily for teenagers called “Habbo Hotels”, has had to fight to be attract and retain interest to its users. “It’s much like publishing a magazine,” says CEO Timo Soininen. “You have to be constantly coming up with new ways to entertain readers or they’ll stop buying [the magazine].” Sulake earns revenues from sales of virtual objects, such as drinks and party room decorations, which visitors use to impress friends or improve the game experience. So, the Habbo Hotels require constant upgrades and new services to maintain their visitor numbers and be a good place to ‘hang out’. In particular, each country has its own hotel with content and interface written in the country’s native language and specifically targeted at teenagers. “You can’t expect to write content that’s cool for a London teenager from an office in Helsinki,” says Soininen.
For a Web 2.0 community to work, it needs to have as few barriers as possible to user involvement, ways for users to ‘bond’, and as many reasons for them to take part as possible. It’s unlikely that these reasons will stay constant over time, so organisations will need to continue to develop and enhance their services to maintain their users’ interest, all without destroying the very things that interested them in the first place – a challenge for anyone.
Web 2.0 isn’t for everyone however – at least not externally. As part of the roundtable discussions that rounded off the conference, delegates came to the conclusion that many companies have yet to experience the benefits of web 1.0 nor would they have the external user community necessary to support Web 2.0 capabilities, even if they achieved board approval. However, for internal use in knowledge sharing, the techniques of social networking could prove invaluable for many organisations, provided they could overcome certain psychological obstacles.
Key to any social network is the need for unfettered communication and the ability to trust the other participants. Organisations need to be able to persuade participants in the networks that they are trustworthy and are not involved simply to exploit their customers through another mechanism. This will inevitably result in conflict with marketing, communications and legal departments – sometimes with good reason, since there are huge possibilities for copyright, trademark and libel problems with unfettered user interaction. If an organisation is incapable of overcoming these concerns, it will never be able to fully take advantage of Web 2.0.
For some Web 2.0 will be an evolution, not revolution. For others, it will open up whole new ways of doing business and whole new types of business. And for a select view, it will have almost no effect at all. Unlike Web 1.0, which was very much a one-way communication, Web 2.0 is far more susceptible to changes in users’ sensibilities and is far more capable of going wrong quickly. But Web 2.0 also offers far greater opportunities for customer insight and loyalty than Web 1.0 ever did. Finding the right way to use and implement its features will be the challenge.
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