Texture design

Truemors (Guy Kawasaki??

It's interesting to watch the hype around Web 2.0 increasingly crystallize from a general perception of marketing mirage and investor snake oil to the many valuable concepts that are actually represented by the term.  One of the best examples of this is Jason Fried's fascinating new survey of 500 random Basecamp users, asking them what they think Web 2.0 is.  A mere 13% had never heard of it and some of the answers are not only extremely good but the overall depth of knowledge is impressive.  Perhaps it's just the quality of 37signals users, but I suspect 500 people represents a reasonably broad sample of online people.  In fact, the survey itself is pretty much Web 2.0 collective intelligence in action, if fairly unstructured.

Our next stop is TechCrunch's Michael Arrington and his excellent new 24 minute Web 2.0 documentary that asks very astute questions about what really seems to be changing on the Web (and sure, Web 2.0 represents networked applications based on architectures of participation, but we've had those before; it's the way we've all started to use the Web for forming personal relationships and sharing our content, right?)  In any case, Mike does a great job asking the leaders of Web 2.0 companies about business models, user generated content, and much more.



And speaking of business models, Google itself is muscling in and both skimming off and monetizing the now-galactic presence of tens of millions of Web 2.0 users in MySpace, YouTube, and Digg.  This starts to point to some overarching strategies for making Web 2.0 business models successful that we'll explore in a moment.

Seven Ways to Explicitly Trigger Network Effects

• Network Enable Your Application.  This might seem obvious but it's a critical prerequisite and has more than the surface potential for creating interesting new applications outside of pure Web plays.  For example, a Web 2.0 application does NOT have to be Web-based, but should be able to at least connect to the Internet.  iTunes is an excellent example of Web 2.0 outside of the browser, but even mobile phones and text messages, made better ala TWTTR, shows the potential to think outside the box when it comes to thinking about a network.
• Enable Data Sharing and Data Defaults.  A big part of harnessing collective intelligence via Web 2.0 techniques is by making the experiences of tertiary users in a given situation easier and smarter.  By this I mean when a user does something using the Web 2.0 application, that information should contextually improve that situation for the next user that comes along.  I often cite del.icio.us/popular as a great example of leveraging the work that the Web users that came immediately before you are making your upcoming experience that much better (less searching for new and relevant content.)  More specifically this could mean expert guidance in completing online forms, improving shopping recommendations, collaborative spam filtering, and much more.  Capturing information from your users and making it available to others (without violating privacy of course) is a key "plank" of Web 2.0.
• Linkify Everything In Your Web 2.0 App.  And I mean everything.  The hyperlink is one of the most powerful mechanisms existing for triggering network effects.  It's how users show up to your site in the first place and everything else thereafter.  A hyperlink structure must be how the information on your site is organized, shared, bookmarked, e-mail, IM'd, etc.  Granular URLs are the key here.  A site should have a URL structure that has clear axes for its URL segments (the things between the slashes in a link) to navigate through a user's information, the shared folksonomy etc.   Something like site/user/tags/xxxx is a classic example but there should be many interesting (and user-defined) paths to get to the same information.  Once available via links, the knowledge of the page, data, or minicommunity to which the link navigates can propagate with amazing -- even alarming -- speed.  And propagation over the network is the name of the game when it comes to network effects.  If that link contains something people want to share, they will e-mail the link to a group of friends, who will IM it to more friends, who will put the links in their blogs, and so on.  Pretty soon everyone is involved and you're buying bandwidth upgrades in bulk quantities.  The Message: Consistently think in and design in hyperlinks.
• Syndicate Your Content:  It's unclear in my mind how powerful this truly is, but the blogosphere is proof that it can be quite potent.  Furthermore, it greatly increases the discoverability of whatever content is on your site.  You should support RSS at least, but probably Atom as well.  Other people have written more authoritatively about this than I do here but it's an important checklist item.
• Turn Your Application Into a Platform:  Encouraging unintended uses by others is practically de rigueur now and every good Web 2.0 site seems to have an open Web API these days.  But what's important it in this context is that it leverages network effects on an entirely new meta level.  Not only is your site using its own traffic to generate more traffic and create more connections on the network/between people, but so are tens or even hundreds of other sites.  They can use your API to add your site's content and functionality to theirs (and hence their feedback ecosystem to yours).  And they might leverage network effects a whole lot better than you for a variety of reasons (better design, more funding, cooler crowd, what have you.)  Warning: Make sure your APIs are designed to leverage your social architecture or you might not get the desired result, just parasitic use.
• Open Up Inside Your Site:  Like MySpace allowed for a while with YouTube, let others host content, Javascript badges, widgets, feeds, or what-have-you on your site in the areas that belong to your users.  Not only does this have the useful side effect of instilling a sense of creation and ownership in your users, but it allows you to leverage the network effects of other sites. This makes the content on your site aggregate the best content of other sites creating second order effects that can make your site cumulatively more valuable by building synergy, a new-agey but accurate term that means that the sum is greater than the parts.
• Build a Viral Social Architecture.  Sounds fancy and difficult but it's mostly not.  At its most basic, you just make sure that it's extremely easy for users to invite their friends, family, and colleagues to visit the site.  Example: The end of each YouTube video lets you share it with others via e-mail.  There's a lot more to this however and I intend to write it about it soon, but just remember that building good social architectures of participation is one of the core techniques for those interested in serious results.

And there are many other ways to trigger network effects, these are just some of them.  But as long as it causes your service to have more intrinsic value to be connected to another node on the network (Internet, Intranet, or otherwise), that's enough.

What other ways do you know of to take advantage of network effects in online software?

Chris Anderson, Editor-in-Chief of Wired Magazine, has been discussing a concept he calls The Long Tail for quite some time now.  Many of you have no doubt been reading his excellent blog on the subject, and now finally his long-awaited book about this key Web 2.0 business model has been published.  The actual launch day was just over a week ago (some great coverage of this by Chris), yet The Long Tail has long since emerged into the collective consciousness of business and technology thought leaders everywhere.  It was even prominently cited in Tim O'Reilly's seminal essay on What Is Web 2.0 (top of page two), where he gives the concept a lot of credit for creating some of the Web's major successes:

"Overture and Google's success came from an understanding of what Chris Anderson refers to as "the long tail," the collective power of the small sites that make up the bulk of the web's content." - Tim O'Reilly

For those who haven't been tracking it, The Long Tail essentially describes the mass servicing of micromarkets, which is primarily made possible, even cost effective, by the delivery system of the Web itself.  This is what the subtitle of the book puts another way as Why The Future of Business is Selling Less of More.  And it's not some obscure buzzword, I've found The Long Tail to be an indispensable short hand in describing certain concepts and trends we see emerging in business and the Web these days.  For example, I've described Amazon's innovative Mechanical Turk as a yet another one of their brilliant "long tail" plays.  So too how The Long Tail of enterprise software demand is finally being tapped using Web 2.0 technologies to cost effectively serve previously underserved portions of the enterprise which couldn't previously justify the the expense, most notably in articles on ZDNet and here.

Can you think of any interesting new real-world examples of The Long Tail?

Editor's Note: Beginning with this post, we are pleased to announce the inaugration of our first contributing editor, Mark Scrimshire.  Mark has been doing a terrific job covering all things Web 2.0 on his own highly informative blog and I've invited him to begin coverage here as well. This will help our readers get even more of the latest information on the next generation of the Web, information technology, and business.  As always, if you have any feedback or want to share interesting new Web 2.0 products, services, or ideas, please be sure to drop me a line.  - Dion Hinchcliffe

Over the past 20 years there is a trail of desolation made up of the remains of companies that wrote off, or under estimated, Microsoft. There are plenty of detractors that say the company has missed the boat and is no longer relevant. Some say Microsoft doesn't get Web 2.0 and has major issues in maintaining its Windows desktop dominance in a world now focused on the web.  Don't jump to conclusions too soon. While simultaneously working on Vista's development Microsoft has also been quietly transforming its web properties and building a new user experience with the Windows Live brand. Starting from a vision 12 months ago (see the first SYS-CON post from November last year), the live.com site has seen dramatically  growing traffic according to Alexa, demonstrating some of the virally driven growth traits we have seen with other Web 2.0 sites.

Live.com – Not just a consumer play

There are in fact two Live plays that Microsoft is making. Both are aimed at preserving their market position. The first is Windows Live. A suite of tools and services that complement the Windows platform. The second is Office Live and it is aimed at preserving the market dominance of the Office productivity suite.

When Microsoft announced Office Live many of us jumped to the conclusion that it was a move in the direction of software as a service that and a web-delivered, subscription-based version of the Office platform. The initial products launched under the Office Live brand point to a different objective. The initial target for Office Live appears to be taking small businesses on line. Expect to see hooks in to Office Live from the Microsoft Office suite and don't expect a web-based version of Office any time soon. While currently free in beta, Office Live will be a subscription-based service.

The Live.com service has tools and applications that are attractive to consumers, businesses, developers and advertisers. Each of these groups is fueled by the presence of the other groups (for more on discussion of network effects check out the earlier blog on embracing the network). Describing Windows and Office Live is a moving target but the diagram below attempts to place the various services in context in the ecosystem and identify those components that have a desktop client dependency.

Live.com – Not just a consumer play

There are in fact two Live plays that Microsoft is making. Both are aimed at preserving their market position. The first is Windows Live. A suite of tools and services that complement the Windows platform. The second is Office Live and it is aimed at preserving the market dominance of the Office productivity suite.

When Microsoft announced Office Live many of us jumped to the conclusion that it was a move in the direction of software as a service that and a web-delivered, subscription-based version of the Office platform. The initial products launched under the Office Live brand point to a different objective. The initial target for Office Live appears to be taking small businesses on line. Expect to see hooks in to Office Live from the Microsoft Office suite and don't expect a web-based version of Office any time soon. While currently free in beta, Office Live will be a subscription-based service.

The Live.com service has tools and applications that are attractive to consumers, businesses, developers and advertisers. Each of these groups is fueled by the presence of the other groups (for more on discussion of network effects check out the earlier blog on embracing the network). Describing Windows and Office Live is a moving target but the diagram below attempts to place the various services in context in the ecosystem and identify those components that have a desktop client dependency.

Common Services

Live Services are a mix of web-based and desktop client based applications. These clearly provide Microsoft with the ability to bundle new services without changing the underlying desktop client platform. This approach may be seen as a way to avoid prolonged anti-trust litigation surrounding Windows.

Common Services

Live Services are a mix of web-based and desktop client based applications. These clearly provide Microsoft with the ability to bundle new services without changing the underlying desktop client platform. This approach may be seen as a way to avoid prolonged anti-trust litigation surrounding Windows.

Live.com: Your personalized home page. Web search, news, feeds and customized gadgets can be added to your home page. Subscribers with a passport or .net account already have a 'Live ID' that is the key to services on live.com. This gives the clue to Microsoft's approach in leveraging existing services and web properties.

Office Live: Originally thought to be an online version of the Office suite. This incarnation is markedly different. Instead it is a business-oriented service that allows subscribers to register a domain name, setup a web site and email services for their domain. Although free to use during the beta period this will be a paid service strarting from $29.95/month. There are three levels of service:

1. Basic: web site and email services for your domain.
2. Collaboration: build on the basic service to provide password-protected web sites, online storage and business applications.
3. Essentials: web site design tools, traffic analysis and reporting tools and basic business collaboration tools.

Live.com: Your personalized home page. Web search, news, feeds and customized gadgets can be added to your home page. Subscribers with a passport or .net account already have a 'Live ID' that is the key to services on live.com. This gives the clue to Microsoft's approach in leveraging existing services and web properties.

Office Live: Originally thought to be an online version of the Office suite. This incarnation is markedly different. Instead it is a business-oriented service that allows subscribers to register a domain name, setup a web site and email services for their domain. Although free to use during the beta period this will be a paid service strarting from $29.95/month. There are three levels of service:

1. Basic: web site and email services for your domain.
2. Collaboration: build on the basic service to provide password-protected web sites, online storage and business applications.
3. Essentials: web site design tools, traffic analysis and reporting tools and basic business collaboration tools.

Live Mail: A reincarnation of Hotmail with 2Gb of storage and web-based access to your email.

Live Local: A global mapping and search service. Interesting features offered with this service include ÒCall for Live Mail: A reincarnation of Hotmail with 2Gb of storage and web-based access to your email.

Live Writer: Released in to beta this week. A windows desktop application for blog editing with no need to know HTML. The application not only integrates with Live Spaces but also works with other leading blog platforms including: Blogger, LiveJournal, TypePad and WordPress.

FreeÓ which places a call between the subscriber and a business that they want to contact. Live local leverages Microsoft's Virtual Earth product.

Live Writer: Released in to beta this week. A windows desktop application for blog editing with no need to know HTML. The application not only integrates with Live Spaces but also works with other leading blog platforms including: Blogger, LiveJournal, TypePad and WordPress.

Live Mobile: Microsoft has invested heavily in the smartphone market so it is not surprising that there is a Mobile service for Windows Live providing local, Web and Live spaces search. We expect to see more development of the feature set offered for mobile Live subscribers. At present this service is heavily based upon the existing MSN Mobile search features. Signing up for Live Mobile will take you to the MSN site to register for the service. Given that Google is putting a lot of emphasis on support for mobile phones expect to see more activity in this area.

A Serious Competitor To Watch

Windows Live is still in its formative stages of development but the significant investment looks to be paying off. It is already demonstrating great potential and clearly shows that Microsoft gets Web 2.0 and how to leverage the ecosystem it has developed around the Windows platform. You can also expect to see the XBox Live service integrated with Windows Live. Hooks are already in place on the site. This is clearly a serious competitor to watch and one that current popular Web 2.0 services cannot afford to ignore.

Office Live appears to be a different service to the one that many people had been hoping to see. Expect to see collaborative tools and business oriented applications that are attractive to small businesses and workgroups within larger enterprises. Don't expect to see Microsoft cannibalizing its Office customer base by providing the Office Suite online. Instead expect hooks in Office Live that will only work with the latest versions of the Office Suite, thereby preserving the valuable upgrade revenues that Office generates.

What do you or don't you like about Microsoft's foray into Ajax, SaaS, and Web 2.0?

Check out our good friends Lee and Sachi LeFever's blog site as they have just posted a blog entry on their travel blog, The World Is Not Flat, that shares with the internet their ways of blogging while journeying around the world over the last year.

Raincity designed the site, while Bryght provides hosting and support. It's tough checking in on these guys cause we're all green with envy, but following their journeys and living vicariously through them over the last year has been a treat. Thanks for the video sharing show guys!

Blogging In China - They Have Open Source Conferences Too

I recently found this article in China's Danwei online magazine. It highlights an article written on the recent blogging conference held last week in Hangzhou, China (it was the second annual!), and touches on reasons why the Chinese government should be embracing, not blocking, these future-thinking, web 2.0 savvy citizens and bloggers.

Read this article here, a summary of the conference, the people in attendance and the issues and topics that were covered. It is strangely, and quite comfortably, familiar.