Web 2.0 Managerial Economics

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A Presentation given to the Executive MBA Class in Princeton.

For all you Muppies - Mobile Yuppies

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Web 2.0 Managerial Economics

  1. 1. The Evolutionary Web Managerial Economics in the Web 2.0 World and Beyond Executive MBA Class 2008 Chance favors only the prepared mind – Louis Pasteur
  2. 2. The Evolutionary Web • The mostly read only web • 45 Million Global Users – 1996 • Focused on Companies • Home Pages • Owning Content • Brittanica Online • HTML, Portals • Web Forms • Directories (taxonomy) • Netscape, eBay • Page Views • Advertising The customer is monetized
  3. 3. The New World of Collaboration • Openness – MIT’S Open Course Ware. • Peering – Open Source Linux. • Sharing – VoIP enablement, Multimedia platform, Mobility e.g. Skype, iPhone • Hearing – WOMM, NPS e.g. Starbucks • Acting Globally and not just as an MNC. Toyota/Scion’s steps towards this Vision. Open Source from Microsoft ???????
  4. 4. Web 2.0 & it’s Genesis • Web 0.0 - Technology – Was Technology Oriented – Enablement of Application Design on www – Informative, Expense side of the Balance Sheet, No ROI Realization • Web 1.0 - Commerce – Popularly known as eCommerce – Major force in 90’s for trade/business over the web – ROI Realization – Core competencies of many new-age organization – Amazon, eBay etc. • Web 2.0 – People and Communities – Information Age – A movement for self expression
  5. 5. Web 2.0 & it’s Genesis • The term ‘Web 2.0’ introduced by Tim O’Reilly at a conference in 2004 • ‘Web 2.0’ - an improved form of the World Wide Web • Emphasizing tools/platforms that enable users to tag, blog, comment, modify, augment, rank etc. • Notion of The ‘Participatory Web’
  6. 6. Web 2.0 - A Primer • Recipe for Web 2.0: – Web as a platform – Software above a single device – Data as the new Intel inside – Harnessing collective intelligence – Lightweight business models, e.g. SaaS – Rich Internet Applications (RIA, AJAX, RoR) – Mashups (RSS)
  7. 7. Web 2.0 Key Principles • Read vs. Read & Write
  8. 8. Web 2.0 – Key Principles User Generated Content
  9. 9. Web 2.0 – Key Principles Experts vs. Wisdom of Crowds
  10. 10. Web 2.0- Key Principles 80:20 V/s The Long Tail
  11. 11. Web 2.0 - Key Principles …the content comes to you…
  12. 12. Web 2.0 Landscape
  13. 13. The Evolutionary Web • The mostly read only web • The wildly read/write web • 45 Million Global Users – 1996 • 1 Billion Global Users – 2006 • Focused on Companies • Focused on Communities • Home Pages • Blogs • Owning Content • Sharing Content • Britannica Online • Wilkipedia • HTML, Portals • XML, AJAX, RSS • Web Forms • Web Applications/Services • Directories (taxonomy) • Tagging (folksonomy) • Netscape, eBay • Google, Facebook • Page Views • CPC/CPM • Advertising • Word of Mouth The customer strikes back The customer is monetized
  14. 14. Global Business 2.0 Models Step 1 : Create a large/focused niche user community Step 2 : Monetize once the community reaches critical mass - Sell special services targeted at community (LinkedIn) - Sell services to a large group of SMEs (Salesforce.com) - Sell data to partners (Facebook) - Get a revenue share from transactions (eBay) - Sell advertisements (Google Adwords) - Freemium: Sell premium memberships (Flickr) - Sell your company (Youtube)
  15. 15. Should organizations even care about Web 2.0 ???
  16. 16. The world we live in.. …the consumer is in control
  17. 17. …….they have unlimited options
  18. 18. …and are avoiding advertising Pop-up Blocker Do Not Call Registry
  19. 19. Companies must pay attention to the Participation culture 113 million - Blogs tracked by Technorati.com
  20. 20. Who do Consumers Trust ? The CEO / Ad agencies / marketers Or “A person like Me or You” i.e. other consumers or peers 2 - New blogs posted every second
  21. 21. Web 2.0 has put consumers in control of the conversation Every consumer is…
  22. 22. …a Publisher …a Disc Jockey …a Critic …a Movie Director …a Networker …an ENTREPRENEUR
  23. 23. … a broadcaster … and socially hyper-aware
  24. 24. …if organizations want to participate in this conversation, they must acknowledge and facilitate consumer control...
  25. 25. Enterprise 2.0 Trends How organisations can harness Web 2.0 ?
  26. 26. Enterprise 2.0 Attributes • Application of Web 2.0 within the enterprise to solve / improve internal work practices • Collection of Web 2.0 tools/platforms for increased productivity and information sharing • Harnessing of COLLECTIVE employee and customer intelligence • e.g. blogs, wikis, mash-ups, project management tools, Software as a service (SAAS) • Driver: remote collaboration requirements across different locations / time zones
  27. 27. Anatomy of Enterprise 2.0
  28. 28. Enterprise 2.0 Opportunities • Social Marketing/PR • 360 Degree Real Time Feedback Mechanisms • NPS – Net Promoter Scores – Customer WOM • Direct Sales • Brand Building – promotions, advertising on social networks, events – referrals, lead generation • Mediated Marketing Research • Viral Marketing
  29. 29. So what comes next ????
  30. 30. The Thing about Predictions... quot;Computers in the future may weigh no more than 1.5 tons.quot; Popular Mechanics, forecasting the relentless march of science, 1949 quot;I think there is a world market for maybe five computers.quot; Thomas Watson, chairman of IBM, 1943 quot;640K ought to be enough for anybody.quot; Bill Gates, 1981 apocryphal quot;There is no reason anyone would want a computer in their home.quot; Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977
  31. 31. Crystal Ball Gazing • What is beyond Web 2.0 ? Pervasive Mobile Technology Artificial Intelligence Speech Technologies The Web as an Open Source Database The Web without Browsers The Semantic Web Cloud Computing Machines taking over our entire thinking??
  32. 32. The Semantic Web • A web of data that can be processed directly and indirectly by machines – Tim Berners Lee RDF – Resource Description Framework OWL- Ontology Web Language CoIN-Context InterChange COWL- Context OWL RML – Rule ML (Extension of HTML, XML)
  33. 33. The Evolutionary Web • The read/write/execute web • The mostly read only web • The wildly read/write web • ?? Billion Global Users – 2010 • 45 Million Global Users – 1996 • 1 Billion Global Users – 2006 • Focused on Individuals • Focused on Companies • Focused on Communities • Lifestreams, Mobility • Home Pages • Blogs • Consolidating Dynamic Content • Owning Content • Sharing Content • The Semantic Web • Britannica Online • Wilkipedia • Widgets; Drag/Drop Mashups • HTML, Portals • XML, AJAX, RSS • Open Interactive Databases • Web Forms • Web Applications/Services • User Behavior (me-onomy) • Directories (taxonomy) • Tagging (folksonomy) • iGoogle, Netvibes • Netscape, eBay • Google, Facebook • User Engagement • Page Views • CPC/CPM • Advertainment • Advertising • Word of Mouth • Enterprise Mobility The customer strikes back The customer customizes The customer is monetized The age of the Muppies (Mobile Yuppies) has Dawned
  34. 34. The Evolutionary Web
  35. 35. If You Remember just ONE Thing … Whatever you do, Make sure it’s worth talking about – And have FUN doing it.
  36. 36. Thank You

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