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Web 2.0: A Strategy Guide: Business thinking and strategies behind successful Web 2.0 implementations by Amy Shuen
Book Summary InformationAuthor: Amy Shuen Edition: Hardcover Audio: English (Unknown); English (Original Language); English (Published) Published: 2008-04-30 ISBN: 0596529961 Number of pages: 272 Publisher: O'Reilly Media Product features: - Hardcover First Edition 2008
Book Reviews of Web 2.0: A Strategy Guide: Business thinking and strategies behind successful Web 2.0 implementationsBook Review: Book Review of "Web 2.0: A Strategy Guide" by Amy Shuen Summary: 5 Stars
The Internet is becoming more prominent in daily life with the emergence of the social networking opportunities provided by Web 2.0. The technology used in Web 2.0 is a leap forward from Web 1.0. During Web 1.0, the Internet was a place to search for information, become enlightened through numerous downloads, and do commerce in a similar fashion to that done with traditional mail order firms. Web 1.0 was the 10 year period from 1995 to 2005. Web 2.0 adds social networking to our potential uses of the Internet.
In Web 2.0: A Strategy Guide, Amy Shuen examines the leading firms in the adoption of the new technology of social networking. Amy Shuen is well suited for this task as she is a well-known authority on Internet business models and a professor at the China Europe International Business School.
First off, Amy Shuen points out the differences between Web 1.0 and 2.0 by comparing Flickr and Netflix. Netflix was a video borrowing site (similar to a traditional video store) when it started during Web 1.0. It required start-up capital to pay for its initial inventory of the latest videos. The burn-rate of such start-up capital is a major problem of Web 1.0 firms. In contrast, success is possible in Web 2.0 without start-up capital. Many successful Web 2.0 enterprises were started by one or two enthusiasts and zero dollars. These emerged just after the dot-com bust.
Flickr is a Web 2.0 site on the Internet where users post their pictures for free. Such posting is a freemium - a service that is given for free to attract users. The freemium attracts initial posters of photos and has an exponential multiplicative effect when more users are attracted to see these photos and post their own. Revenues are generated through subscription fees for premium services, advertising, and sponsorship.
Amy Shuen points out the features that make Flickr successful and shows that these exist in other successful Web 2.0 enterprises:
User generated content - users' photos on Flickr; users' writing on Wikipedia; users' profiles on Facebook; users' identification on LinkedIn. This content is globally shared with others. The growth of this content gets around the need for start-up capital to pay for inventory.
A user friendly web site on the Internet that has an up-to-date search engine, do it yourself tools, and allows for customization by each user.
Amplified social networking encouraged by features that promote discourse and encourage other people to join the bubble. Flickr enhances the development of social contacts by having imbedded links on other systems and tools for integrating the photos stored on Flickr in users' blogs.
Social networking effects can be a pitfall of a Web 2.0 firm. In a Web 2.0 market that has just a few players, the most successful organization experiences a virtuous cycle; whereas, the others in the market have marked vicious cycles due to the movement of consumers to the firm with the most market share. In a virtuous cycle the dominant firm quickly increases its market share and becomes even more dominant. This movement of consumers to the leading firm, is due to reasons like those in any popularity contest where consumers favor a dominant product, politician, or government program. A big difference of Web 2.0 is that a market splits into vicious and virtuous cycles at a much faster rate, than in previous eras, since the information flow is much faster in social networks created with Web 2.0.
The effects on revenues of vicious and virtuous cycles are exaggerated by the bidding wars of advertisers. One result of these bidding wars is that the leading firm in a market gets 4 cents per click on an advertiser's web link; whereas, other firms only get 2 cents.
Some firms take outrageous steps to become the dominant leader in a market that has vicious and virtuous cycles. For example, one firm in the search tool market paid exorbitant amounts to buy out other firms so that it could have a 50% share.
Most reviewers agree that Web 2.0: A Strategy Guide is a good, clear, straightforward introduction to the business of Web 2.0. One criticism is that Amy Shuen emphasizes successful Web 2.0 firms and leaves out the problems encountered by some other players. Shuen does point to the strategies used by successful Web 2.0 firms and poses useful questions for those to answer who wish to follow the same path. Web 2.0: A Strategy Guide contains further sections on how to link the outstanding qualities of Web 2.0 with the leading features of organizations that were started in earlier eras.
Summary of Web 2.0: A Strategy Guide: Business thinking and strategies behind successful Web 2.0 implementationsWeb 2.0 makes headlines, but how does it make money? This concise guide explains what's different about Web 2.0 and how those differences can improve your company's bottom line. Whether you're an executive plotting the next move, a small business owner looking to expand, or an entrepreneur planning a startup, Web 2.0: A Strategy Guide illustrates through real-life examples how businesses, large and small, are creating new opportunities on today's Web.
This book is about strategy. Rather than focus on the technology, the examples concentrate on its effect. You will learn that creating a Web 2.0 business, or integrating Web 2.0 strategies with your existing business, means creating places online where people like to come together to share what they think, see, and do. When people come together over the Web, the result can be much more than the sum of the parts. The customers themselves help build the site, as old-fashioned "word of mouth" becomes hypergrowth.
Web 2.0: A Strategy Guide demonstrates the power of this new paradigm by examining how:
- Flickr, a classic user-driven business, created value for itself by helping users create their own value
- Google made money with a model based on free search, and changed the rules for doing business on the Web-opening opportunities you can take advantage of
- Social network effects can support a business-ever wonder how FaceBook grew so quickly?
- Businesses like Amazon tap into the Web as a source of indirect revenue, using creative new approaches to monetize the investments they've made in the Web
Written by Amy Shuen, an authority on Silicon Valley business models and innovation economics, Web 2.0: A Strategy Guide explains how to transform your business by looking at specific practices for integrating Web 2.0 with what you do. If you're executing business strategy and want to know how the Web is changing business, this book is for you.
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