Book Review: Web 2.0 : A Strategy Guide

I guess it would be unfair ton critique a book on Web2.0 written in early 2007. However, it is an interesting exercise on looking at some predictions, some assumptions and some ideas just to figure out where they were right and where they failed.

In all fairness to this book by Amy Shuen, it tries hard to be useful. It has a lot of examples, attempts to analyze Web 2.0 business strategies and even tries to help the reader put together a business plan.

Unfortunately the final product looks more like a huge term paper or thesis from my last Master Program at MIT. It features numerous case studies and tries to fit Web 2.0 into analytical and business models from popular business and academic thinkers.

One of the authors quoted is also one of my favorite teachers from MIT, Eric von Hipple. von Hipple spoke of democratizating innovation and Lead users long before the term Web 2.0 was invented. Innovation with products,he said is not limited to the entity that creates the product but all other stakeholders who interact with the product: its users, resellers, etc.

Other models included in the book are Porter's forces, Gladwell's theory of Mavens, connectors and salepersons, Rogers' adoption curve and Chris Anderson's Long Tail.

The book uses more than its share of buzzwords: Prosumers, Mashups, Freemium, to name a few. It speaks of Salesforce.com that makes CRM easily available for those who cannot by traditional CRM software suites like Oracle. Today, Saleforce.com is more a warning than an example.

Web 2.0 speaks in detail about the business models of companies like Flickr, Linkend and Facebook. In. My problem here is much like as those who critique Web 2.0? Where is the bottom line?

Web 2.0's success stories are few a far between. Google is the biggest of these. Netflix is another, as it can be considered the Blockbuster killer. Amazon's zshops is another great success story.

All in all, one may read this book and evaluate its theories in the light of happenings in the present. While some models have their merits, unfortunately many serve as warnings.

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Chris Anderson on YouTube

Chris Anderson Explains the Long Tail

We are fortunate to live in these times and to be able to look at our culture from our databases., says Anderson. He goes on to explain his long tail theory with the 80/20. There are infrequent events that have high impact. These are low frequency, high amplitude events like earthquakes.

Another example is of most of the population being concentrated in cities. This 80/20 rule is true in human economies,  human affairs and nature itself.

If plotted on the linear curve  it would show a large concentration on the left. If we plot if log-log we would get a sloping line.

In the box office, the #1 film made a lot of money. then there are many over time that did not fare successfully. The vast majority do not make it to megaplexes as there are not enough screens for them. This means that our belief about Hollywood taste is shaped by the distribution channel. These bottlenecks distort the market and our perception.

In our era, we have Internet distribution channels that do not have much of the bottlenecks like storage area or shelf space. We now have access to the latent market, which we could not reach with traditional distribution.

Rhapsody carries niches from this domain in music. These are tracks that Walmart does not carry. Rhapsody carries far more inventory than Walmart. The same difference is seen between Netflix and Blockbuster and between Amazon on Borders.

The low sellers were not significant in earlier markets and are beginning to count toward sales online. We are moving toward a trend where half the market is sold via the old model and the other half through the new distribution models.

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My Web 2.0 Surfings for 10-27-2008

What is Web 2.0?

This is yet another introduction to Web2.0. What I liked about it is that it has the best description of the long tail and how it ties into the Web 2.0 theme.

What the hell is Cloud computing?

Here are more defintions:

-Reaching a global audience

-A distribution channel

-Virtualization and Automation to deliver IT services.

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