What is it? Why should you care?
How do you make it work for you?
Presented at the Fraser Valley Technology Network
May 11, 2006
What is Web 2.0 1
Who are we? Who are you?
What do you want out of
!who are we and why are we here?
!Ean introduces Troy: We are friends; we work on a board together; he wanted to understand
this web 2.0 stuff so he decided to write a Manifesto; today is a preview of the Manifesto that
answers the questions: What is web 2.0, why do I care? What do I do about it?
!Troy introduces Ean: Ean has been teaching e-business for six years; about 18 months ago his
students started asking what web 2.0 was and so Ean went off searching; Ean invited me to join
his socially conscious web 2.0 related startup venture and we also began collaborating on the
!who are you and why are you here?
!what type of organization? Business, non-profit, Individual
!what function / role? Geeks? Businessperson? Other? Management? Apply technology?
!technical skill levels? Super Geek, Technically competent, Luddite?
!what do you want out of this?
What is Web 2.0 2
Map of the Territory Ahead
• What is Web 2.0?
• Key Themes
• Patterns and Principles
• Why now?
• Success stories
• Why do I care?
• Benefits and Opportunities
• Risks and Threats
• What do I do about it?
• Where do I learn more?
What is Web 2.0 3
“This coming quot;services wavequot;
[web 2.0] will be very
disruptive...But in order to
execute on this opportunity,
as we've done before we must
act quickly and
decisively...The next sea
change is upon us.”
- excerpted from Bill Gates' memo to his staff October 30, 2005
!Web 2.0 is big and it’s real.
!It is disrupting industries and will continue to do so
!There is significant opportunity at the same time
!You need to understand it
!You need to decide what to do about it
!Then you need to act.
What is Web 2.0 4
What IS Web 2.0?
!The definition of Web 2.0 is VERY MUCH IN FLUX.
!O’Reilly: Web 2.0 is the network as platform, spanning all connected devices; Web 2.0
applications are those that make the most of the intrinsic advantages of that platform: delivering
software as a continually-updated service that gets better the more people use it, consuming and
remixing data from multiple sources, including individual users, while providing their own data and
services in a form that allows remixing by others, creating network effects through an
quot;architecture of participation,quot; and going beyond the page metaphor of Web 1.0 to deliver rich
!Richard McManus Definition: “The Web as platform” for...people, machines, community,
!John Hagel: “an emerging network-centric platform to support distributed, collaborative and
cumulative creation by its users.”
!Ross Mayfield: Web 2.0 is people!
!Troy: a movement that is taking place in the economic, technical, and social realms that is
based on the web as the new platform for global communication and collaboration.
!The Register’s Humour:
!Web 2.0 is the air for the next bubble
!Web 2.0 is made of ... a row boat made up of a rather large hole.
!Web 2.0 is made of ... marketing and collaborative self-deception
What is Web 2.0 5
What are some examples?
!You know all that “stuff” you keep hearing about? Much of it is Web 2.0
!Welcome to the explosive blogosphere. We gave them a voice and now they won’t shut up!
!ZERO in March 2003 – 20M in Oct 2005 = 18.9M blogs; doubling every 5 months, consistently over the
past 36 months. >70,000 are created DAILY.
!Wiki: Finally, we can all stop using that damned “track changes” stuff in Word!
!WikiNews, WikiPedia, Jot/Confluence
!social networks: Hi, I saw your profile, know that you love green jelly beans, and are really into bocce. Want to go
!Search: People using Google and other search engines in place of yellow pages. Need to be indexed. Higher up the
index the better. .00003% of the web; we have a long way to go
!better than search. >1/3 of blog posts now have tags.
!Do you want 20,000 entries or 45 really tightly focused and vetted ones? We are teaching the machine to
!Web apps are starting to not suck:
!Flickr, Zimbra, eBay, Amazon (sort of), Basecamp, Ta-Da list,
!Social media is completely disrupting the old media with a lower cost of content generation
!Digg, NowPublic, NesVine, Tagworld, Yahoo, YouTube
!Online communities: Facebook, LinkedIn, MySpace, Orkut, Classmates.com (does anybody register with them???)
!Audio: iTunes (sort of), Last.fm (definitely)
!CMS: this is the end of static HTML; how come your old site is so hard to update but your blog is so easy?
!RSS: what if you could read 1200 websites per day, and have your web calendar synchronized with your desktop
calendar and your phone? You can.
!VoIP: It’s about time we changed that ugly old phone.
!Skype, Fonality, MachTen, Primus, Asterisk change the world 100 years later. And they change it in 2 years.
What is Web 2.0 6
What are the key themes
that tie it all together?
!THE 8 C’S:
!CONVERSATION: There is a conversation happening around you
!There is a conversation going on about anything you want
!Even about you and your company
!COLLABORATION: Remember the old barn-raising bees? They’re back!
!old: keep the system closed. we know best
!new: open it up to massive collaboration; we’ll learn faster
!COMMUNITY: You are not separate and distinct from me. You are me. I am you. We are all one.
!old: you are separate
!new: quantum physics and environmental studies and Buddhism all say the same thing – we
are all one
!CONTENT: Let’s cut costs and make the clients do all the work!
!old: only the trusted ones should create content
!new: only our community knows this information; they are better, smarter, and faster than we
!old: We will work in isolation or in small teams and maybe learn from each other
!new: Einstein (?): If I have seen farther, it is only because I am standing on the shoulders of
giants” - now the whole world can do this.
!old: people are stupid in large herds, (herd mentality)
!new: in certain circumstances and contexts, groups of people are actually smarter than
!CHANGE OF SCALE: What if you could grow your company 10,000x faster? Would you do it?
!old: we’re hoping to expand to Burnaby next year
!new: we went from 0-54M users at Skype in 18-24 months; Flickr did $35M USD in 18
months; Writely did about $5-7M in 14 months.
!CONTEXTUAL SEARCH: How will we make searching things a heck of a lot easier?
!I want the search to understand who I am and what I want without me having to do the hard
What is Web 2.0 7
What are some of the
defining characteristics and
What is Web 2.0 8
From the Center to the Edge
!Inversions From the Center to the Edge
!Accountability: bloggers doing fact-checks on quot;officialquot; media
!Content creation: the edge (users) are creating content faster than the
center can create it
!Power: The edge is creating for itself more say in public discourse and
action (could also call this 'recognition and voice')
!More say in development: The edge wants to be a partner in the
development of your centrally designed software
!moderation moves from the center to the edges (self-moderation)
!Walled Garden -> Open data. From AOL or equivalent which is not
searchable and which people can't enter without paying to data indexed by
Google so that people can find it and use it.
!Mixability: From quot;we control access to our dataquot; to quot;here are the APIs - do
whatever you want with our data.quot; (Google + CraigsList = Housingmaps.com)
!Administration and service: from central service to self-service
!Platform: Desktop --> Network
!Overall model: publishing --> participation, using different degrees of
moderation from strict to none.
!Legitimacy: from quot;official sourcesquot; to quot;any source with a good reputation
(pro or amateur)quot;
!Innovation: is moving from the center (app developer) --> the edge (user /
remixer / hacker / mashup builder / power user)
!Code: Proprietary --> Open Source
!Ranking: Centralized ranking --> wisdom of crowds rankings.
!Quality: quot;I've noticed for a while that the stuff I read on individual people's
sites is as good as or better than the stuff I read in newspapers and
magazines.quot; (Paul Graham)
!processing power at the center: drops from huge server loads --> lighter
server loads as AJAX pushes more interface processing onto the local client
What is Web 2.0 9
From the Edge to the Center
!Inversion From the Edge to the Center
!Software as service: Move the applications from the desktop client --> the
!Move the data from the desktop --> web (store your calendar, contacts,
files, documents, identity, photos, blog content, etc. on servers so that they
are: platform independent, available from anywhere, backed up (hopefully),
and allow for interactions with others.
!Centrally stored content allows the provider access to patterns of what
matters most to people. THIS IS CRITICAL to making money. Watch the
usage pattern for emergent patterns (behaviour that the individuals
themselves don’t know but that emerge in aggregate.)
What is Web 2.0 10
From few/small to big/many
!Transition from few to many
!Creators: From a few creators in the center --> nearly unlimited creator
!Content: From a small amount of content, expensive to produce -->
exponential growth in content, very inexpensive to produc
!Components: From a relatively small number of monolithic and brittle
applications --> millions of tiny application components working together as
needed, more durable and redundant
!Dependencies: From fewer --> many more
!Advertisers: Doubleclick's 2000 advertisers vs. Google's Adsense 200,000
!Connections: from fewer connections (between people or components) -->
millions of connections between people and components
!Creation: solo or small group activity --> massive collaboration (wikis for
What is Web 2.0 11
From big/many to small/few
!Transition From more/heavy/larger to less/light/smaller: (Less is more)
!Software: Monolithic, single owner --> quot;small pieces, loosely joined, multi
!Smallest addressable quot;blobquot; on the web: from page (by using a URL) -->
micro-content blob (by using a permalink to a blog post)
!Formats: from large proprietary file formats --> small micro-formats that are
openly accessible and travel with their blobs of data
!Publishing/Participation Threshold: High threshold --> Low Threshold (easy
to do for more people)
!Learning curves: From large applications with steep learning curves -->
smaller apps with apparent functionality and low learning curves (and
therefore higher adoption rates.)
!coding languages: from C++, C# (?) to lightweight scripting languages: Perl,
Python, PHP, Ruby
!Capital requirements: ($2M from idea to launch --> $100,000 from idea to
!Software costs: From paid box-ware and downloads --> free or nearly free
components and pieces and infrastructure
!Hardware/storage/processing costs: from expensive to nearly free
!The Long Tail of content: From quot;the big hitsquot; --> quot;everything that is out
!Integration: From heavy integration bonds between few components --> API
based integration between millions of components (weak ties)
!Payment increments: From payments in dollars --> payments in fractions of
a penny (that are aggregated)
!Cost of labour: From expensive --> cheap as you move offshore
!Lock-in: from standard practice --> something that pisses off your clients
!Taxonomies: From rigid, structured, inflexible taxonomies --> adaptable,
evolutionary, quot;good enoughquot; folksonomies
!License: Copyrighted -->GPL/Hybrid quot;all rights reservedquot; --> quot;some rights
!control of data: From quot;we control the use of the dataquot; --> quot;here are our APIs
What is Web 2.0 12
- go crazy and create something else with itquot;
!Software release cycles: Infrequent, monolithic --> Continuously updated on
!Company strategy: from annual milestone --> ongoing and continuous
What is causing all of this?
!Economics are driving a lot of this:
!Global broadband penetration: (Paul Kedrosky numbers)
!>70% of households in S. Korea have it
!>35% of US households have it
!~10% of global wireless has some form of it
!Software is (mostly) free
!Hardware costs have dropped by many orders of magnitude (Paul Kedrosky: 1980: $183,000
!People costs are dropping because of offshoring
!micro-payments now finally work (Paypal)
!micro-advertising now works (Google)
!search is lowering the cost of marketing and sales
!Ad revenues ($400B/yr) are shifting from traditional channels towards the internet
!we learned a lot of lessons in the dot-com collapse
!Technical changes are also driving it:
!LAMP (linux, apache, MySQL, Perl)
!Tools: AJAX, Tagging, XML
!And our underlying social drives are now finding new channels to express themselves:
What is Web 2.0 13
What sorts of companies
have had success?
!destroyed the $12B classifieds industry on which the newspaper industry sits; 10
people run the 7th largest site in the world
!0-24 months = $35M USD buyout with a team of around 10 people; now at 2.5M
users and 70Million photos (2005)
!bought domain in 2002; bought by Newscorp for $580 M in July 2003 (18 months
!Started in 2004; purchased by eBay for $2.6B; end of 2005 == 74M usres;
+150,000 users/day!!; disrupted a 100 year old business in 2.5 years!
!25 employees, 35,000 videos added per DAY. Vistors view 30M videos per day
!15,000 registered beta guest sign-ups...with no advertising.
What is Web 2.0 14
WHAT’S IN IT
!Long Tail economics – make more off the tail than you could from the head
!Time to market
!Develop your products faster
!Lower startup costs
!It easier to build a company with less capital
!focused product development makes you more efficient
!keep your overhead costs lower
!lower customer acquisition costs:
!customer acquisition costs are lower: (Direct: 22K, Indirect, $5K, Direct: $70; E-mail: $60;
Yellow Pages: $20; Search: $8.50 (PK)
!find new customers
!finding new customers (cost-effective sales and marketing and PR through blogs)
!find that star geek
!finding good people (recruiting)
What is Web 2.0 15
!Web 2.0 is disrupting some different industries
!...the classified ads business has been completely disrupted by Craigslist
!Media Social media is disrupting traditional media companies
!Website design Moving from static to dynamic – big leap
!so Doing NOTHING is potentially a risk
!Data privacy issues haunt the various vendors
!Still under construction
!It is a work in progress!
!Yeah, that’s a feature, not a company
!There are lots of features parading as companies and attracting a bunch of funding.
!You still have to build a business!
!This is the hard part.
!If you build it, they won’t necessarily come:
!Online communities are REALLY HARD to build
What is Web 2.0 16
What do you do about it on
!INVENTORY your outstanding org goals. think of all of the things they want to achieve for their org that
they haven't been able to that might be impacted
!ASSESS: see if there is a fit between what you want to do and everything we have talked about here
!LEARN: the tools, applications, and language
!ADJUST your attitude But the key is that you need to adjust your attitude on a lot of fronts:
!REBUILD your plan accordingly
!ACT! start small, fail fast, adapt quickly, have fun
What is Web 2.0 17
Where do I learn more?
• O’Reilly www.oreillynet.com
• Dion Hinchliffe web2.wsj2.com
• Wikipedia en.wikipedia.org/wiki/Web_2
• Troy Angrignon www.troyangrignon.com
!Some good starting points:
!Dion Hinchcliffe - http://web2.wsj2.com/
!eWeek Web 2.0 special report: http://www.publish.com/category2/0,1874,1868201,00.asp
!Tim O' Reilly's Web 2.0 Meme Map.
!Paul Kedrosky's Vancouver Enterprise Forum slides:
!Paul Kedrosky at paul.kedrosky.com
!Richard McManus at www.readwriteweb.com
What is Web 2.0 18
• Ean Jackson
• VP Business Development,
• Phone: 604-904-6554
• Troy Angrignon
• Emerging Technology Strategist,
What is Web 2.0 19