Users, Money Shifting to Participatory Web 2.0

 Print Article

New ‘version' of Web is considered more social media

(MCT)-The new breed of Internet companies and online services revolve around people.

The so-called Web 2.0 companies include Wikipedia, Myspace.com, Flickr, Digg, YouTube and even San Antonio-based AT&T, which 18 months ago launched its Blue Room, an interactive consumer entertainment site.

In every case, people collaborate with the companies and contribute to sites, according to a report released recently by the Pew Internet & American Life Project using data from Hitwise, a San Francisco-based online research company.

"This isn't a measure of profitability or successful business models," says Mary Madden, senior researcher and one of the report's authors. "This is where the momentum is shifting in terms of people's attention." Nevertheless, Web 2.0 companies
are attracting plenty of business attention.

Google announced in October that it would buy YouTube.com for $1.65 billion. In 2005, Rupert Murdoch's News Corp. paid $580 million in cash for Myspace.com.
Still, some of the Web 2.0 companies like YouTube.com have yet to define how they will make money.

"It seems like we are back in the mode of building the business first and trying to figure out how to build the business model around it," says Bill Tancer, general manager of global research at Hitwise.

The Web 2.0 is the "participatory Web," including blogs, wikis and social networking sites, Madden says. She says it's difficult to define where Web 1.0 ends and 2.0 begins because some of the underlying technologies overlap.

The Pew report points to Photobucket, a socially integrated photo service that requires users to upload, share and tag their photos as an example of a Web 2.0 company. It labels Kodakgallery, a traditional online photo site, as a Web 1.0 company. It also calls Wikipedia, an interactive encyclopedia, a Web 2.0 company, compared to Encarta Encyclopedia, another Web 1.0 company. The Web 2.0 companies are growing online traffic much more quickly than the traditional companies, according to the report.

Some define Web 1.0 as companies formed between 1993 and 2000, when the dot-com bubble burst. Web 2.0 companies represent the second wave of technology advancements and company formation.

"Web 2.0 applications are participatory and dynamic," says Tancer. "In the 1.0 world, you just went places to read news, and in a 2.0 world you go places to engage with news." For example, Geocities gathered people into the same place, but Myspace.com lets people network with one another, Tancer says.

Web 2.0 isn't affecting just Silicon Valley companies. Its technology has enabled companies in San Antonio to reach wider audiences as well.
"Web 2.0 for us means that a smaller company can have a more nimble and more aggressive presence through self-publishing, video blogging and podcasting," says Alan Weinkrantz, who runs a public relations company that bears his name. He writes a public relations blog and a local technology blog, SATechBlog.com. And he is launching a consumer electronics-focused blog.

AT&T's primary product, DSL, or high-speed Internet access, enables a lot of the Web 2.0 services, he says. But the company doesn't see itself as just a service provider. It's a communications and entertainment company, Harn says.

Blue Room features live concerts and events such as the Austin City Limits Music Festival. It's also got sports information including "home turf" featuring athletes' homes. And recently Blue Room launched a gaming site.

"The number of people who want to participate in live events, whether it's a major music festival or hundreds of thousands of people coming to watch the space shuttle launch-being part of that is really key," Harn says. "We really do believe at some point we can be the only entertainment and communications company someone needs." RE

Copyright © 2006, San Antonio Express-News
Distributed by McClatchy-Tribune Business News.