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USERS CREATE VALUE AMY SHUEN, CHAPTER 1
How’d they make money?
<ul><li>How is Web 2.0 different from the Web 1.0 dot-com boom and bust? </li></ul><ul><li>How does Google offer &quot;the...
The Long Tail:  A Business Model for Web 2.0  <ul><li>Sell a large number of unique items in small quantities </li></ul>
The Long Tail <ul><li>“ With no shelf space to pay for and, in the case of purely digital services like iTunes, no manufac...
http://www.wired.com/wired/images.html?issue=12.10&topic=tail&img=2
 
Flickr
Flickr Capabilities <ul><li>Tagging / Searching </li></ul><ul><li>Ratings (“Interestingness”) </li></ul><ul><li>Online Com...
 
 
Schmap.com
Web 2.0 Business Models <ul><li>Subscription Fees </li></ul><ul><li>Advertising ( PPC ) </li></ul><ul><li>Transaction Fee ...
Cost Drivers <ul><li>Inventory </li></ul><ul><li>Payroll </li></ul><ul><li>IT </li></ul><ul><li>Marketing/CRM </li></ul><u...
What’s Flickr Worth? <ul><li>2 million users </li></ul><ul><li>$20 / user per year in revenue?? </li></ul><ul><li>Yahoo bu...
 
 
How does Web 2.0 change things? <ul><li>Customer acquisition costs start small </li></ul><ul><li>Product costs are reduced...
Strategic Questions <ul><li>How can users add value? </li></ul><ul><li>Risks of being a leader or a laggard </li></ul><ul>...
Tactical Questions <ul><li>Can users participate? Connect with others? </li></ul><ul><li>How to attract and retain visitor...
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Shuen Ch1

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Amy Shuen Chapter 1 summary

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Transcript of "Shuen Ch1"

  1. 1. USERS CREATE VALUE AMY SHUEN, CHAPTER 1
  2. 2. How’d they make money?
  3. 3. <ul><li>How is Web 2.0 different from the Web 1.0 dot-com boom and bust? </li></ul><ul><li>How does Google offer &quot;the world's knowledge&quot; to searchers for free and still make more than $10 billion in revenue, [1]  grow 68%, and have a stock market valuation of close to $200 billion? </li></ul><ul><li>What could possibly make Flickr—a two-year-old photo-sharing startup—worth $40 million to Yahoo!, a video-sharing YouTube worth $1.6 billion to Google, a social networking site called Facebook worth the equivalent of $15 billion to Microsoft? </li></ul><ul><li>Is Web 2.0 about corporate blogging, wikis, and podcasting, or something else entirely? </li></ul>
  4. 4. The Long Tail: A Business Model for Web 2.0 <ul><li>Sell a large number of unique items in small quantities </li></ul>
  5. 5. The Long Tail <ul><li>“ With no shelf space to pay for and, in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees, a miss sold is just another sale, with the same margins as a hit. A hit and a miss are on equal economic footing, both just entries in a database called up on demand, both equally worthy of being carried. Suddenly, popularity no longer has a monopoly on profitability.” </li></ul><ul><ul><li>Chris Anderson, “The Long Tail” (Wired Magazine, Oct. 2004) </li></ul></ul>
  6. 6. http://www.wired.com/wired/images.html?issue=12.10&topic=tail&img=2
  7. 8. Flickr
  8. 9. Flickr Capabilities <ul><li>Tagging / Searching </li></ul><ul><li>Ratings (“Interestingness”) </li></ul><ul><li>Online Community </li></ul><ul><li>Syndication / RSS </li></ul><ul><li>Easy upload from cell phones </li></ul><ul><li>Digital Ecosystem </li></ul>
  9. 12. Schmap.com
  10. 13. Web 2.0 Business Models <ul><li>Subscription Fees </li></ul><ul><li>Advertising ( PPC ) </li></ul><ul><li>Transaction Fee (ebay, target) </li></ul><ul><li>Volume based </li></ul><ul><li>Licensing / Syndication </li></ul><ul><li>Sponsorship </li></ul><ul><li>Loss Leaders </li></ul><ul><li>Freemium Strategy </li></ul><ul><li>Network Effects </li></ul><ul><li>Long Tail </li></ul>
  11. 14. Cost Drivers <ul><li>Inventory </li></ul><ul><li>Payroll </li></ul><ul><li>IT </li></ul><ul><li>Marketing/CRM </li></ul><ul><li>Create partnerships with 3 rd party developers </li></ul><ul><li>Open API’s </li></ul>
  12. 15. What’s Flickr Worth? <ul><li>2 million users </li></ul><ul><li>$20 / user per year in revenue?? </li></ul><ul><li>Yahoo buys Flickr for $30-$40 Million in 2005 </li></ul>
  13. 18. How does Web 2.0 change things? <ul><li>Customer acquisition costs start small </li></ul><ul><li>Product costs are reduced </li></ul><ul><li>Development costs shifted </li></ul><ul><li>Iterations change the shape of the curve </li></ul><ul><li>Exponential effects play a greater role </li></ul>
  14. 19. Strategic Questions <ul><li>How can users add value? </li></ul><ul><li>Risks of being a leader or a laggard </li></ul><ul><li>How to measure collective user value? </li></ul><ul><li>How can quantifying customer acquisition costs provide valuation information? </li></ul><ul><li>How can collective user value be applied to project management? </li></ul>
  15. 20. Tactical Questions <ul><li>Can users participate? Connect with others? </li></ul><ul><li>How to attract and retain visitors? </li></ul><ul><li>Reuse: RSS / APIs / Widgets / Mashups </li></ul><ul><li>Licensing / Creative Commons </li></ul><ul><li>Can you charge / make money? Who pays? </li></ul>
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