If you spend any time on the Internet, you’ve probably heard quite a few people bandy about the term “web 2.0″ referring to the recent wave of Internet communities and services. If you haven’t heard me say this already, it bears repeating: Web 2.0 is still in beta.
Many of the applications and online services that we are using clearly describe themselves as beta versions. Even those that consider themselves out of beta still have a long way to go. Twitter needs to incorporate some of the features popping up in third party applications, Pownce needs users, Reddit needs to be more user friendly, StumbleUpon needs to address security issues. The list goes on and on.
Many web 2.0 applications and services are still trying to invent themselves. They haven’t quite found their niche or purpose.

Twitter asks us a question that web 2.0 sites and services need to ask themselves. What am I doing?
Many web 2.0 applications and services are still trying to invent themselves. They haven’t quite found their niche or purpose.
The thrust of this blog post is divided into two main parts, the provider and the user. I’ll tackle things from the provider perspective and then the user perspective.
Developing New Social Media Outlets
From the developer and provider point of view, things look like this:
1. Start with an idea of something people will like and use.
2. Get it to work.
3. Get people to use it.
4. Figure out how to make money with it. (While maintaining users).
5. Evolve enough to keep people interested and stay ahead of the competition.
We’ve got some good ideas floating around. Many break down quickly at #2. Twitter has received quite a bit of angst because of reliability issues in the past (although things have been a little smoother during the last few days). I have given up on a number of desktop applications that tried to integrate web 2.0 because the number of bugs present made the software largely unusable.
Number 3 is a tough on for some platforms like Pownce, which still seems to be floundering in Twitter’s shadow. Right now it just doesn’t seem to be generating enough buzz for itself or delivering enough content or connectivity.
Number 4 is a big sticking point for almost everyone, especially the caveat at the end about maintaining users while making money. Therein lies the rub. The two main modalities for income at this point are charging for use and advertising. Yahoo has some premium services and some ad driven services. Google is entirely ad driven. Pownce has an optional yearly subscription. For the most part, advertisement revenue remains the most widely used approach to bringing in money.
On the development side of things the paradox is this: The more you advertise or charge, the fewer users you will have. For many consumers free is better than a monthly subscription, and charging from the outset will keep people away. Charging for additional or premium services will most likely bring in only a small amount, as the vast majority will opt for the free services, however meager. If advertising becomes too prominent with popups, animations, sound, overbearing banners and email/IM/txt spam, the audience will get annoyed and look for less intrusive alternatives.
Google seems to have found a decent balance, with their text adds off in the margins, which aren’t overly intrusive. Gmail does read your mail and tries to match relevant adds to you which can be good because you’re getting personalized content, or bad because they are reading your mail. The image below indicates they scanned my message, picked up on the key word air, and provided me with links to airfare sites. Unfortunately Google wasn’t sophisticated enough to realized I was talking about a software platform and not flying.

Facebook has landed themselves in quite a bit of hot water with their beacon directed advertising. The number of complaints about privacy and intrusiveness of facebook as a whole has started turning users off. In facebook’s defense, they’re just trying to figure out a way to make a buck and I can’t really blame them for that, but their methods have been flawed. While I don’t use them personally, they provide an excellent example of the paradox and the delicate balance required to maintain revenue streams and a userbase.
Effective Use of Social Media
There is a lot of buzz in the Twitterverse and other online communication centers about marketers trying to get their clients to embrace web 2.0 and take advantage of the opportunities that are present. I’ve seen lots of statistics floated about number of users/viewers and amounts of advertising dollars spent in various outlets, mostly geared toward getting clients to invest time and money in web 2.0 discourse and advertising.
The basic process as I see it is thus:
1. Join the web 2.0 world.
2. Draw attention to yourself.
3. Maintain people’s interest in you.
4. Leverage the interest into revenue.
I personally haven’t seen very much effective use of web 2.0 sites and services as a marketing tool yet. I have seen quite a few instances of web 2.0 as a tool for excessive announcements and blatant advertising to the point where it borders on spam. I’ve “unfriended” and “unfollowed” several people on sites like Twitter and Pownce because I was getting overwhelmed with their constant streams of self promotion, business announcements and useless links.
Again we approach the paradox, but from a slightly different angle. A presence on the Internet is beneficial, but too much of a presence can steer people away. We end up with a dilemma that requires a very delicate balance. You need to get out there and be seen by people, but must be careful not to obstruct their vision.
If there is a company, website or online service I’m interested in, I’ll check out their blog or sometimes follow them on Twitter. I’ll gladly provide feedback, advice or constructive criticism if it seems that they will listen. If my email inbox starts getting flooded with their announcements or my Pownce page is nothing but links they’ve sent, I’ll quickly shy away and you won’t hear from me again. If we can have an actual two way conversation and develop even a brief personal dialog, I’ll feel a sense of rapport and a sense of investment. I might support your advertisers or think about paying for a subscription or recommend you to my other friends.
In the basic outline above, #1 or joining up is easy. It helps if you spend a little time figuring out where in the web 2.0 world you would best fit in, but a shotgun approach can work. The last step is often very easy. If people know about you and are interested, they’ll naturally visit your web site, store or check out your product. The difficult parts are #2 and 3. Getting noticed and maintaining interest can be very tricky and as I’ve explained before, overdoing it can be counterproductive.
Solutions for Providers
For providers and developers, current models are fragile machines that will require a lot of fine tuning to achieve the perfect balance. Subscriptions can be particularly tricky because if you are taking money directly from people, you are definitely more beholden to their needs on an individual level. Customer service can be a nightmare. The ad driven approach is less of a hassle, but user privacy issues, the presence of ad blocking software and the paradox of too much advertising can be tricky.
In my opinion, the real solution hasn’t been found yet. I think in the future we’ll see more of a direct tie in between social networks and traditional business. Businesses will hire social networks to perform various functions for them, and will likewise provide services to web 2.0 developers (which will in turn send web 2.0 users back to the business). I don’t have specific examples or concrete ideas of how this will work, but I believe the future lies beyond simple banner ads.
Solutions for Users
There is a lot of uncharted territory and untapped potential available. Individual users will have to figure out how to best tailor the many new resources available to suit their needs. There is one extremely important starting point here and that is the idea of a two way conversation. Announcements and updates are one thing, but true success will be found in personal dialog. This may be unfamiliar ground for many clients and companies and they will most likely need to find web 2.0 savvy individuals to help them out. To take advantage of web 2.0, you need to have a name and face behind the image. If you want to receive feedback, you need to respond to feedback. To take advantage of web 2.0 you need to be part of web 2.0, meeting and interacting with your target audience and customers on a personal level, in the places they frequent.
A developer from Microsoft stopped by this blog a few weeks back and posted a solution to a problem I was having with a piece of MS software. That was pretty darn impressive in my book. Now lets say company X comes along and engages its target audience on their blogs, says hi on Twitter, connects with them through Digg and gets to know the consumer just a little bit on a personal level. That type of relationship is pure win-win. It can be time consuming, but with a dedicated and proficient staff (for example yourself, a social media consultant, an web savvy PR employee) the sky is the limit.
That’s all I have for now. I hope reading my thoughts here has spurned some fresh ideas of your own.
Cheers!
Jeff