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Friday, December 30, 2005

Web 2.0 : Time For A Reality Check

Web 2.0 is clearly getting disproportionate coverage in the blogosphere. Web2.0 share in the real world as delivering value to business and society is indeed limited - if we look at the enterprise software – they directly are responsible for making the business machines hum and improve- be it airline scheduling, dispatching crude oil or treasury management or powering the stock exchanges of the world. Mike Arrington lists out a set of Web 2.0 applications that he sees as quite essential – the list has within it - some well known names – Technorati,FeedBurner, Bloglines, Flickr, Memeorandum, del.icio.us, skype & WordPress etc. The enthusiasm and the excitement shown for Web 2.0 apps amazes me – as these defy long held priniciples of wisdom. Its high time that these so called Web 2.0 companies are examined from the first principles viz. Business models – merely becoming attractive to be bought over by Yahoo’s & Google’s of the world would not be sufficient. If you see closely even the valuations of bought out firms have been very moderate.No doubt advances in technology to develop and distributed services off the web is an important landmark – most of Web 2.0 apps germinate out of this. The reigning mantra seems to be - "build it first and figure out how to attract visitors – they will anyway come” business model – the underpinning hope is that once a critical mass of visitors are achieved, revenues can always be generated. AdSense funds the operational cost of several web 2.0 enterprises. Surely not the way to build a scalable & enduring business . I sort of agree with the view web 2.0 lacks meaning & magic. I am fine with already established players like Amazon & Google getting web2.0 tagged – am also fine with finding a productive niche to thrive in the information value chain. Moving forward like in the e-business space, we need to have the wisdom and mechanisms for cross-integrating/leveraging web 2.0 applications for larger benefits – this calls for standards in development , build & integration blocks – all this would come only out of a solid base of web 2.0 apps that get built beneath – truly a tall order given the fragile nature of several web2.0 entities. We can definitely see a petering out of the web 2.0 momentum as we see it now and several entities would disappear – but one hope is that out of this something robust and strong might emerge – but we have cut through the hype.

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