Regarding what "doesn't" work: I was rather negative in my last blog, wasn't I? A reader’s email inspired me to address the business models in Web 2.0 that seem to be working. (Thank you, Sophy.) I see many of them as B2B2C models. These three-way relationships - with a sponsor a host and user generated content (UGC) - seem promising. And they are all essentially content and talent searches. That’s good, as there’s so much content that the only way to sift through it is to use the audience itself to find the best stuff.
Jumpcut worked with Doritos on the UGC Superbowl commercials, attracted additional traffic and attention to its own site, and made the audience part of the solution. Some great commercials came out of it. The irony there was that none of the finalists actually used Jumpcut to create their commercial!
Eyespot working with Paramount on the recent Mark Wahlberg "Shooter" mash-up trailer promotion is another good example, though again I'm not sure which, if any, of the entrants actually used Eyespot's software.
Yahoo Groups is taking audiences that organically grow from interaction over a discussion topic or passion - such as Battlestar Gallactica - and bringing in sponsors whom the audience will embrace without damaging the integrity of the group. The content remains user-generated. Facebook does the same thing with sponsored groups. The Apple group is very active and independent, and is of course sponsored by Apple.
I remain an optimist, despite my post. I believe the open nature of Web 2.0 can and will be embraced by traditional applications, thereby bringing them to a much larger audience. I think the greatest potential for monetization is in facilitating collective action. Amazon and Aggregate Knowledge are doing this passively by amassing vast databases of user purchases and offering "if you like this, then you might also like..." to increase average check-out. WalMart has been doing this for years, starting with putting the potato chips next to the beer.
But that's passive. What's really promising is software-as-a-service that facilitates active participation in collective action. The services can be free, subsidized by the value of the analytic data produced by the collective; or at one-off or subscription cost, where a sponsor pays to get objective outcomes.
With this approach, services where cost was previously a barrier can now be accessed by everyone. An excellent example of this is Mturk, where people are paid pennies an hour to accomplish simple tasks; however, the facilitation there really only happens in the exchange of money for work, but it's a great start.
The next wave is actually facilitating complicated tasks such as online panel-based media research, where people are currently paid for their time. To date, a traditional approach has been adopted by media researchers, in that they've simply used being online as a more efficient method of finding and compensating panelists. Yet with Web 2.0 applied, where the applications themselves become available to everyone, we have a whole new world.
That's the area I'm working in with CrowdRules, so part of this is of course self-fulfilling prophecy! But I do think that achievable new business models are just around the corner. Just like Spring.
Best,
DM
Interesting. I enjoyed reading this one
Posted by: myspace design | June 19, 2008 at 06:37 AM