Web Two Point Uh-Oh: Life in a syndicated world

 Were Internet advertising like wines, then Vintage 2004 would be considered a good year. The drought that plagued the online ad market for most of 2000 through the end of 2002 is now just a blip on the radar, a slight false start, not to mention, for many a fading memory. How is it, though, that a bust so spectacular, one that resulted in hundreds if not thousands of companies going out of business and tens of thousands of jobs being cut in our industry alone, can seem so far away? The answer, or at least one plausible explanation, is that so many of the people working in Internet advertising today did not experience the downturn. So many of the people working in our space today were in high school or college during the initial expansion and subsequent retraction.

The last quarter of Vintage 2004 saw Internet advertising revenues exceed by almost 40%, more than any other quarter on record. And, Vintage 2005 saw $3.5 billion more in total expenditures than 2004. This incredible increase has meant many things. For one, companies today have absorbed over these two years an incredible amount of people, with everyone from Adteractive to ValueClick doubling or tripling their head count. It has also meant an incredible proliferation of new Internet companies. The number of companies and attention they have received is hard to comprehend; it is reminiscent and only eclipsed by the one that preceded it. If the first expansion was Web 1.0, this is Web 2.0.

Now, if for some reason you have successfully managed to avoid much of the hype going on, I did not invent Web 2.0. If anything, I’m late to the party with the NY Times, Wall Street Journal, and Business2 already having published stories about these emerging technology companies. Amazingly enough though, the term which has seemingly been beaten to death like a hit song on the radio only came to being less than a year and a half ago by O’Reilly Media. They, in October 2004, put on the first Web 2.0 conference and had an even larger event just four months ago. As Tim O’Reilly, founder of the media company baring his name, illustrates in this excellent piece, Web 2.0 involves many things. At its root though, we see the web transforming from a collection of destinations to a platform – a means for users to control, connect, publish, syndicate, and share their data. This data can include anything from writings to pictures, files, contacts, one’s calendar, and browsing activity.

To understand the nature of the emerging web, open up either two browser windows, or one browser window with two tabs for the Firefox users out there, and direct one to Ofoto.com and another to Flickr.com. Both sites allow users to upload photos and share them with others. Take a deeper look and what you see is how Ofoto.com looks to mimic the way the world as we currently experience (in non-connected world), whereas Flickr offers the same features but in ways that better leverage the connected nature of the web. Flickr makes “the process of organizing photos collaborative. In Flickr, you can give your friends, family, and other contacts permission to organize your photos – not just to add comments, but also notes and tags.” True, the term “tags” has now been overplayed, but focus on the collaboration. Their approach to making photo sharing collaborative is in fact revolutionary and has proven itself in the community they have built. They didn’t focus on building a more technically competent site; they focused on building one that made it more attractive for users to “store, search, sort, and share” not just store.

We see the same differences when comparing veteran event planning site evite.com with the new entrant upcoming.org. Like Flickr, upcoming.org is collaborative. It focuses heavily on discovery, on seeing what other users of the site are up to. Evite on the other hand is a closed system. It is a great service, but they miss out in the end by keeping users walled off from each other. The breaking down of barriers and increased collaboration is what you see in many of the other popular Web 2.0 entrants – from video sharing site YouTube.com to instant messenger emulator and one of my favorite’s Meebo.com. Some of the ones are more guilty pleasures, e.g. bolt.com, but others really show the power of the web. Just try Jot.com sometime for collaboration at work; or, imagine trying to pull-off Prosper.com without the Internet, not to mention the potential impact on the real estate world with Trulia.com and Zillow.com.

Overall, the new breed of sites are not necessarily more complex than those they seek to replace, nor are they necessarily using technologies that never existed previously. They do use certain technologies today more than sites did in the past, e.g. Ajax, but the use of them has more to do with the attitude of the site and their positioning than it does with the availability of that technology. The treatment of the user, not the technology, is what really separates an Ofoto.com from a flickr.com. The problem of course, is that Web 2.0 has, as O’Reilly puts it, become a marketing buzzword and tacked on too frequently that it already has lost some of its value. That so many of the new sites have drunk from the same design Kool-Aid is one definite plus, as they focus on clean lines, pleasing color palettes, usability, organization, syndication, and speed.

Whatever the name of the period we’re in, we have definitely entered a second mini-bubble. As I have written before, we will see aggregation and compression. Luckily, the fall-out won’t be as steep; the floor will not drop so far. Investors and other companies are, however, hungry to attach themselves to the next big thing which means we will see deals reminiscent of Blue Mountain Arts. Not too many I hope. Many have come; many will follow, and even more will fold. Those who will make it, are those that not only create their own community but also facilitate the sharing of user data to other content platforms. Flickr demonstrates this best- you can upload a picture from your cell phone and have it appear on your blog within a minute, all automatically. That is life in a syndicated world.