One of my perks here at rackAID is free books. I am a reviewer for O’Reilly and several related publishers. Typically, I just skim through the books, review a few key chapters and try to get a sense of the overall flavor of the book. However, the latest book I’ve read from them, ““Web 2.0: A Strategy Guide”:http://oreilly.com/catalog/9780596529963/” by Amy Shuen was a cover-to-cover read.
The book is impressive in its clarity. Shuen’s concise, clear language presents the marketing and business aspects of Web 2.0 without the typical hype. If you are new to Web 2.0, social networks and curious about the rise of Facebook, Youtube, and similar outlets, then give this book a thorough read. You will come away understanding the core business principles driving the success of these online behemoths.
I often see the synergies of Web 2.0 first hand, but I had never had the business lingo to describe what I was seeing. For example, the other day I was making some backups of client’s sites. One had nearly 4 million images – yeah that’s right 4,000,000. Nearly every file on the server was a user-contributed image. This social networking site was capitalizing on what Shuen calls positive network effects and user generated value, two of the key ingredients in a successful Web 2.0 business.
web20.pngOne example of user-contributed value Shuen highlights is the tag cloud on Flickr. The tag cloud is a categorization of popular items on the site derived from user input. The tag cloud allows people to explore through concepts rather than just finding specific. Shuen reports that 85% of the photos in Flickr have human-added metadata. This data is used to better organize search and categorize the images. The interaction with the customer is a key item Shuen points out as critical to Flickr’s success. This user contribution to the site generates value for all users. A key she says to successful Web 2.0 operations.
Shuen also highlights LinkedIn and Facebook. She describes positive network effects at work in these companies. On LinkedIn the value of the site is determined by the network it can offer you. When you join the network, you add a positive impact, your presence may lead to others to join or you may linked up previously separated groups. By joining the network you increase its utility to all users while simultaneously making it more attractive to non-users. These positive network effects as Shuen calls them are critical to Web 2.0 success.
A nice feature of the book, is that at the end of each chapter, Shuen presents Strategic and Tactical Questions. These are excellent bullet list to help you think about enabling Web 2.0 on your business or expanding your Web 2.0 up-start. For example, she encourages you to “think about positive network effects” taking place in your business. How have you actively considered and worked with positive network effects to grown your company?
Shuen break downs Web 2.0 into some key areas: collective user value, network effects, competence syndication, and recombinant innovation areas she documents as core to Web 2.0 business. If these you want to learn more about these concepts and Web 2.0 in general, this is the book to start. Perhaps I can convince O’reilly to give me a few more copies to syndicate to our readers? That would be putting some network effects to work.