Rudelle Blogging

All along 2006, we have seen Web 2.0 hungry VCs racing to invest in web community startups. They were all trying to replicate YouTube supposed easy cash out. Anything with some Ajax, mashups, open API or User Generated Content would be called Web 2.0 and was supposed to be very hot.
In beginning of 2007, it looks like Web 2.0 is no more a phrase to put forward to attract VCs attention. They have eaten too much of this buzz word and get afraid to get stuck with some lagers who have missed the wave.
However, it’s not because a catchy phrase is no more fashionable that the underlying concepts are dead. Open APIs, mahsups and UGC remain a major key of Internet’s future. Many innovative and powerful business models are still to emerge in this field. Some of them have the potential to overtake the traditional way to do e-commerce and media.
But as for the first Internet bubble, only savvy investors who are smart enough to invest against the crowd will make tremendous leverage in a couple of years on these emerging players.

What is a mashup? To fully understand mashups, it is necessary to go back to another concept: public API. An API is an interface which makes it possible for two software programs to communicate together. Public API simply means an API published on the web and available for public usage.
To offer a public API became a must for any Internet site which claims to be Web 2.0. But why did this become so fashionable?
Well, it is related to the structure of the Internet. In a broad picture, one can consider Internet as a kind of giant publication tool.
You have this great content you want to share with other people. For that, you create an application to publish this content on a Web site. It looks simple, but in real life it can get very complex. Indeed, the issue is to present this content in the most appealing, intuitive and efficient way. The trouble of course is that these three characteristics are most often contradictory. Searching for the perfect balance, web publication results into eternal creative compromises. From a given piece of content, there are plenty of different marketing choices, resulting into a very large variety of concepts.
This issue has brought the following idea: I have some great content which I wanna share with the public. Potentially, there are thousands of different ways to publish this content. Sure, I can try to test myself all kinds of marketing ideas. But why not delegate this huge task to others?
For that, I just need to publish on line a public interface which gives free access to my content. In this way, a great number of independent developers will be able to publish my content each one with its own creative approach. Clearly, I no more control the whole value chain. But who cares? Collective intelligence has such a power that among all these pilots, there is a strong probability that some very good idea for my content will prevail.
For this reason, public API became very popular, especially among web 2.0 sites. Leveraging on the net community, it is likely to create more value than by controlling verything. Today, content accessible through a public API is huge. It ranges from Amazon cultural product catalogue to Google Maps geographical layouts, including also Flickr personal pictures and sophisticate predictive calculations for Criteo (yes, yes, you can check our public and free API!).
public API to produce a completely original service. A smart example of a mashup is the combination of Flickr + Navx + Google Maps which makes it possible to position pictures from a ski trip on a map using a GPS tracker.
Mashup potential seems endless. This is why in the coming years, you will see more and more of those smart hybrid applications launched every day on the web.

Despite the fact that traditional e-commerce assets are becoming a commodity, it does not mean necessarily that all large e-retailers will be excluded from the game. As a matter of fact, it might be quite the opposite. In this new web 2.0 ecosystem, mainstream large e-retailers will have a key role: to become the trusted third party for a given category.
In any case, this is the fascinating bet of Amazon which is reinventing its business with at an impressive pace (still badly understood by the vast majority of financial analysts).
The underlying idea is the following: in two or three clicks, I almost always manage to find a certain Joe who will offer me a book $3 lower than my usual e-bookseller. The only thing which retains me to deal with this Joe (unknown to me), it’s the fear (perfectly justified) that Joe will badly perform (or worse will cheat on me) this very transaction.
Now if Joe is registered on Amazon market place, the picture is very different. Amazon’s brand should guarantee transparency, effectiveness and reliability of the transaction. As a result, I can now buy Joe’s book with very little to worry about. And of course, Amazon prefers to gain a 5% commission on the transaction between me and Joe that nothing at all.
The idea of Amazon is simple: better to integrate all the Joes in Amazon’s ecosystem rather than let them develop out of control in the cyberspace. With this trusted third party role, Amazon hopes to stay in the financial transaction loop. Eventually, it is the only important thing for Amazon.
In this frame, Amazon took two years ago an amazing decision: to offer free of charge of its entire product catalogue (through Web services) to the developers’ community. When one knows that for a retailer, its product catalogue is supposed to be one of its main assets, one measures how radical this decision was.
But the logic is always the same: better to have all the Joes developing their revolutionary merchandising concepts using Amazon catalogue, rather than with others. This open API concept opened to all kinds of mashups is clearly one of the main features of these new Web 2.0 sites. Still, it remains extremely rare for e-commerce sites.
This shows that e-commerce 2.0 is still lagging well behind Web 2.0 in general. For this reason, 2007 is likely to be a crucial year where the most dynamic e-retailers will widen the gap with their followers.

Web 2.0 big idea is that content production no more comes from centralized sources, but is taken care by collaborative contribution from users. Traditional Web sites face indeed difficult challenges to ensure an attractive content publication services. That comes from several issues:
- content production is very expensive, without speaking about its maintenance
- the Net users are increasingly demanding regarding content reliability and integrity
- real time aspect of the Internet makes the management of content production very complex
- personalization of content for each user is a true headache for all content providers
Web 2.0 collaboratives approach are supposed to solve these issues in an elegant way. By entrusting content production to end users, portals free themselves from all these constraints. Suddenly, they can combine real time, content diversity and low production costs. Combined with advanced research tools (search engines, tags), those web 2.0 platforms demonstrate unbeatable productivity compared to traditional media approaches.
However, it remains the sharp issue of content integrity. While allowing everyone to produce content, how can one make sure that this collaborative content is not biased or misleading?
There are several ways to tackle the problem. First is to screen all produced content before (or afterwards) its publication. If the volume of content remains reasonable, this can be given to a bunch of professional experts.
For big volumes, a very interesting alternative is to have this screening carried out directly by end users. The idea is that if a majority of users consider a content as poor, there is a reasonable chance that it is actually the case. Statistically, for the mast majority of cases, this democratic control appears surprisingly effective. This idea is behind services like Digg.
Still, this process tends to eliminate exotic gems. And what if you don’t think like the majority of users? Well, this is another story that requires a new generation of tools capable to perform one-to-one personalized collaborative filtering. But be patient, as those complex tools are more web 2.5 than web 2.0. ;-)

According to Wikipedia, Web 2.0 is a referring to a supposed second-generation of Internet-based services that let people collaborate and share information online in new ways, such as social networking sites, wiki, communication tools, and folksonomies.
Sounds familiar to you? Finding the ultimate Web 2.0 definition has been an exciting challenge for a number of so called web experts for the last 18 months. So far, most definitions say more or less that Web 2.0 is user centric or is giving power back to users, and so on.
But now, one question: Which is the only application which already answered this criteria back in 1999 and which represented at that time a community of several tens of millions users? Answer: Peer-to-Peer networks!
Not only these P2P applications are nothing but social networks, but they meet perfectly a number of economic features of Web 2.0, in particular low production cost of the service. Moreover, it is the very reason why P2P services managed, while being developed in garages without any VC money, have achieved such massive success.
But as these services P2P suffer from legal weaknesses, it is difficult to use them as examples of the great web 2.0 revolution. For the time being, nobody has found the miracle (and consensual!) solution to make P2P as legal as any other mainstream application. It is a pity, because by its community approach, P2P could have been at the edge of the Web 2.0 new wave. With by the way, the same Long Tail challenges than for e-commerce sites: these P2P tools are really effective only if the user knows what he is looking for. But this is another story.

A couple of months ago, only experts were debating over the web 2.0 phenomena. But recently, we see more and more mainstream national Medias covering Web 2.0.This new buzz gives a fresh smell of bubble.
But what is behind all the excitement?
In fact, what fascines before all the mass media, is clearly not new technologies related to Web 2.0 (Ajax or RSS for instance), nor even the community aspect (which has existed for a long time). What fascines them is two things:
1) the irresistible growth of giant Google which is eating more and more in the mouth of old superstars Yahoo! and MSN
2) the irruption of an unexpected new generation of Net players. Unknown sites like YouTube, Flickr or MySpace made spectacular rises in traffic rankings in matters of months. And even more dary, they have achieved this spectacular rocket growth almost without any dollar spent in advertising!
In 2001, after the burst of the Internet bubble, one believed that the game was over. The survivors seemed to be able to lock the market, in particular large e-commerce sites. A that time, everyone considered for instance eBay untouchable. Moreover, traditional brands finally thought they had their revenge over those arrogant pre bubble start-ups.
Suddenly, this reassuring feeling disappeared. People were surprised to rediscover a basic rule of business: positions are never secured for ever. On the Internet even more than in the old economy, new entrants can always change the rules.
Fast successes tend to fascinate people. One thinks that there must be some hidden dark secret behind such miracles. Well, in some ways, this secret could be called Web 2.0 ;-)