Three Answers from the Web 2.0 Summit

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I couldn’t make the Web 2.0 Summit a couple weeks ago, but my colleague Jay Hallberg (Co-founder and VP of Marketing for Spiceworks) was there and answered my top three questions:

If I were a brand company…. top three things… that would help my business:

1) Web 2.0 is moving into ‘adulthood’ and changing industries.  There was a general feeling that web 2.0 has grown up.  In fact, the Red Herring had a great piece on this:  "Is Web 2.0 Growing Up?".  Collaborative technologies are solving problems for enterprises and entire industries.  It’s no longer about whether your CEO has a blog or your company has a wiki.  You better be paying attention to how Web 2.0 is helping your competitor or turning your company upside down.  Half of the companies featured in the prestigious Launch Pad were "B2B":  Cleverset optimizes website revenue, ClickForensics analyzes PPC click fraud, and Spiceworks (my company) has introduced free, ad-supported IT applications.  Some of the crowd bemoaned the fact that Web 2.0 is no longer about the next YouTube or Flickr — it’s now about how it’s impacting the bottom-line or up-ending industries.  If you are still talking about blogs and wikis you may have missed the boat.

2) "Online" is everything.  Brian McAndrews who runs Microsoft’s ad business really nailed it when said that within 5 years online will be the center of all media, marketing and advertising strategies.  It’s where people should start.  Frankly, it’s hard to believe that this isn’t already the case but sadly, it’s under-represented both in terms of spend and in planning.  I think the stats are something like people are spending 30% of their ‘media consumption’ time online but only 5% or 10% of ad dollars are spent there.  (I’d have to dig up the stats but I think I’m in the ballpark).  Over the next 5 years I’m sure we’ll see time shift even higher and ad dollars will race to catch up.  At some point marketers will craft their strategies with ‘online’ (PC, phone, video games, apps, etc.) as the foundation.

3) Less is more.  Evan Williams of Twitter gave an elegant presentation on how you can build great products and services by taking out features and functions.  Strip it down to the basics.  And he kept his slides simple and short.  As I will this answer.

Top three cool companies:

Two of the coolest companies were fellow Launchpad participants: Tripit and Cleverset.

Tripit has a drop-dead simple way to organize all of your travel plans.  Book a ticket and email the info to trip.  Same with your rental car and hotels.  They bundle it all up into a simple report that you can access from anywhere and share with others.  No more paper printing.  Their magic is in how they take info you mail to them and sort it all out.  I’m sure they are building a wicked database of interesting travel information.

Cleverset has basically built some Amazon-like-but-better recommendation services for merchandising, content and advertising and made it available as a hosted service you can just plug-in to your website.  They boast 20%-60% revenue gains for over 80 clients.  They won "Best in Show" and "Most Likely to Exit First" by the crowd so I’m going along with them on this one!

For the most part there was a lot of the usual Web 1.0 suspects on stage (Microsoft, Cisco, Google, etc.) but in the coolest big gorilla realm I have to go with… Facebook.  This is their year for sure.  I think they might be a lasting company though there is some risk they could flameout.  Who is LinkedIn?  The half-life of companies is getting shorter and I fear Facebook could fall victim to a fickle user base… but then again they could single-handedly really hurt Yahoo (why do I need Yahoo when I get all my news, sports and friend’s feeds in Facebook?), 100’s of startups (will Facebook be the new Microsoft squashing any company that develops a feature whose ad revenue they covet?), and even Google (do I need search when I just see what friends are doing/have done?).  This will be the most exciting battle to watch since the Netscape IPO and browser wars of ten years ago.

What % of companies have profitable business model?

This is kind of a trick question.  Most of the consumer companies are advertising
based.  I think this is a very profitable business model.  Rubert Murdoch said that MySpace will throw off something like $200M-$300M in profits next year.  Not bad.  The problem in the consumer space is obviously building up a big enough audience, generating enough page views and creating a defensible position.  How many companies will pull that off?  I have no idea but it’s probably in the 1%-10% range and the VCs do a pretty good job of hedging their bets.

In the "Enterprise 2.0" space things are a bit more interesting in the sense that there are a variety of different business models in play.  You have the traditional software licensing models that have been very profitable but are under serious attack by the software-as-a-service and open source (upsell to premium or support) models.  Of course, companies like Spiceworks, are pioneering ad-supported business models for SMB’s specifically and are seeing fantastic demand.  Only time will tell what this mix will look like over the next few years.

3 Responses

  1. Ted Grigg says:

    Lifting a section from your article: “I think the stats are something like people are spending 30% of their ‘media consumption’ time online but only 5% or 10% of ad dollars are spent there.”
    I think we need to e careful not to jump to conclusions.
    Just because consumers spend a lot of money on the Internet does not mean that the Internet is the sole source of that revenue. That’s like saying that most of my company’s orders are coming through inbound phone calls concluding that the phone was the source of that business.
    In the energy put off by this channel, we need to make sure that we are not blinded into automatically assigning the Internet channel as the preeminent source of the revenue. Things are not always as they appear on the surface.

  2. Web 2.0 is indeed modifying and defining some major industries lately. It made some radical changes that most Internet Marketers are trying to cope up with.
    Good post, very insightful! 🙂

  3. David says:

    Your statement “Frankly, it’s hard to believe that this isn’t already the case but sadly, it’s under-represented both in terms of spend and in planning.” caught my attention. It seems to me also that online is where everyone starts. Though I cannot comment on it being under-represented in terms of spend and planning.
    Overall I am very impressed with your site and hope to learn from it. Subcribed via RSS
    Regards,
    David

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