Tuesday, February 20, 2007

Core Characteristics of Web 2.0 Companies:

Nice Article from Tim O’Reilly on web 2.0 - must read! Here are the key principles that need discussion:

1. These companies provide services, not packaged software, with cost effective sclability

2. The companies only exert control over unique and hard to create data sources, but enrichment occurs as more people use them

3. Web 2.0 companies trust their users as co-developers

4. Web 2.0 companies harness collective intelligence

5. Thes companies leverage the long tail through customer self-service

6. Software above the level of a single device

7. Offers lightweight user interfaces, development models and business models.

Principle 1: Web 2.0 leverages customer-self service and algorithmic data management to reach out to the entire web, to the edges and not just the center, to the long tail and not just the head. Example - Doubleclick vs. Overture and Google

Principle 2: The value of the software is proportional to the scale and dynamism of the data it helps to manage. Similarly a service automatically gets better the more people use it.
Many examples - Google vs. Netscape, Akamai vs. BizTorrent

Principle 3: Network effects from user contributions are the key to market dominance in the Web 2.0 era.

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