Concept 2.0

Last year Google launched their shiny video service Google Video which allowed you to search and watch videos across platforms thanks to it's use of Flash player and even went as far as to let you upload your own videos and expose them to the world.

Around the same time, a new tech start-up named YouTube was getting started. They were focused on the same market as Google Video but that was no real concern, Google were king of doing things, they had a magic touch that allowed them to nail a service (think gMail, Google Maps, these are great services).

But things didn't play out as it would have first seemed it would. YouTube climbed to power putting Google Video in it's place. Simply put, Google got it very wrong and YouTube got it very right. But where did Google go wrong?

Probably the same way most companies go - they become big corporations and get taken out by the small tech start-ups. As much as people like to think of Google as a non-evil corporation, they simply aren't anymore. They've now gone public and are answerable to shareholders, and they do - they put a year long ban on talking to CNet's News.com after they ran the story about privacy concerns.

It fits the situation too. Google brought out their video service and soon after monitorised the service. YouTube however launched the technology first and tried to come up with a business model second. The result was a better focus on the technology and therefore a better service for the end user.

The fact is, YouTube is just a lot better than Google Video. Getting anything on Google Video was an effort, you had to install their uploading software, use that to upload the video, go to the site, fill in details for each video and submit it then wait for it to process which would takes days at best before it finally went live.

YouTube is a much slicker process. You go to the upload page and select the file, fill in a few days and it's processed within minutes and available to the YouTube community. Plus if you want to add it onto your blog all you have to do is is copy and paste a line of code providing for you on the page and you have a free video hosting service. Add to that all the Web 2.0 style features such as tagging, user interaction and comments and you have an excellent service.

So where does Google Video go from here? Well you have the option to embed the video in other web pages using cut and paste code and they are introducing a web based uploader. But it looks like, at least for the moment, Google has become a follower, not a leader.

At the end of the day, all the crazy new Web 2.0 start-ups are going to be wanting to earn money. Especially as they bring in investment and possibly even go public they are going to find themselves increasingly under pressure to perform.

But what business model works? Traditionally there are two options - advertising based or charging users a fee for using the product or service. But when it comes to Web 2.0, the latter isn't used much. Indeed, compared to other markets, the idea of charging for your service is rarely used, let alone within the Web 2.0 sub-category.

That's not to say that companies on the internet are not trying to work on a paid subscription business model. WordPress.com recently introduced a premium upgrade that allows people to use custom CSS. But with companies like YouTube and Google's gMail offering their top of the range services completely free, it's hard to get anyone to cough up cash for their service.

Therefore most Web 2.0 companies are looking towards advertising based business models. Which is quite a strange situation really as a lot of people see Web 2.0 as the movement of desktop applications onto the internet - yet most of us are willing to pay up for software, at least more so than we are willing to pay for online services.

The problem is made some what more murky by the fact that there are so many Web 2.0 start-ups that have only just been setup that many of them are still in the early stages being spearheaded by technologists rather than businessmen and therefore many of them simply don't have business models - look at YouTube, they were massive before they finally started putting advertising on their site.

The other problem is that many Web 2.0 websites make use of user generated content, some almost exclusively which aren't good for business models that concern advertising - first of all the advertisers don't trust user generated content. Secondly, if the user content is in violation of copyright, most notably video, and the site is making money from it, it can leave it open for some major lawsuits.

So what business models will function on the Web 2.0? Well, I think to get any kind of clear picture we need to wait a see where the industry goes in the next year or so. Though for the moment charging fees isn't going to be providing a solid business model.

Microsoft Office Live is of course Microsoft's online port of it's office suite to the web. They are currently offering the packages free for you to try while it's in beta though interestingly, once it launches they will be charging a subscription fee of $30 a month.

This will be interesting to see given how much of the web, especially the Web 2.0 offers are free. Some of them offer paid add-ons but most of them are running an advertising based business model and given the amount of them that are new start-ups but tech geeks who are doing it for the technology rather than the business, many of them don't have business models at all.

Of course when it comes to targetting businesses rather than individuals or webmasters, you have much more scope for charging for products. It's worth noting that Microsoft are offering a "Basics" package that will be free after beta which they will most likely use for individuals while their full blown packages will bring in the money from the businesses.

That said, whether they are interested in attractiving individuals at all is in question. After all, why would an individual need a web based office suite given most individuals only have one computer. Sure, you can also access your stuff at cybercafes and such but how many people are going to do that? The main use is going to be business and that is the angle Microsoft are pushing - the tour talks about small business with little regard for anything else.

If you think it will be of use, you can sign up for any of the packages for free during beta on Microsoft.com. So far though, it's not looking particuarly useful for most of us.

About a month ago I got into a discussion with a college over the future of the web, most notably where the next revolution on the web would be. Namely, the idea of the Semantic Web. The thing is though, if Web 2.0 is all about AJAX, integration and so forth, does this mean the Semantic Web will be Web 3.0?

Although of course the problem is that Web 3.0 already has substance to it. So if you really want to get ahead of the game you need a Web 4.0 start-up ;).

Back yonder for those of us that remember it, there was a little bubble called the internet. It burst. But is the same thing that happened to web 1.0 going to happen to web 2.0? Of course there are many factors to take into account here not to mention the fact that none of us have really been able to define what web 2.0 actually is.

But looking at it from the social networks aspect alone, day after day a load of new MySpace style social networking sites spring up with slightly tweaked ideas but still concepts that you can easily see are basically the same as every other social networking site out there.

And yet they are getting in the funding. A lot of people in the industry have said it can't be a burstable bubble as a bubble is financial and web 2.0 is technological. But of course there is money involved - there is loads of venture capital going out to these start-ups, most of which are going to go relatively unused compared to the leading competitiors and the buy-outs are only going to happen to the major players.

Of course many of the internet markets are already saturated. But the problem here is that web 2.0 isn't really anything amazing. It's probably a new way of thinking and doing things which is a lot better but it's not inventing any new markets, it's just re-inventing existing ones which doesn't really increase market size. And so given the amount of resources pouring in, it could indeed be a burstable bubble.

...but it did give me a cool blog title :p.

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