Internet evolution shaping business

DAVID CANTON - for the London Free Press - November 12, 2005 Read this on Canoe

The concept of Web 2.0 has garnered much debate recently.

The Web 2.0 label was coined by O'Reilly Media to reflect the Internet's perceived renaissance. O'Reilly observes the Web has new and evolving rules and business models, but did not construct an actual definition.

There has been much discussion on the appropriate definition -- along with a number of critics who disregard the concept altogether.

Web 2.0 holds that the Internet has developed from a collection of static websites into a cohesive platform that provides users with constantly evolving web applications that can be accessed by both PCs and handheld devices.

Web 2.0 proponents predict the web "platform" will eventually replace desktop platforms such as Windows, software that must be continually updated and can only be used on the computer they are installed on. That is similar to the Sun concept that "the network is the computer."

Another characteristic of Web 2.0 is that it harnesses the collective intelligence and participation of its users. Users of Web 2.0 content are actively involved in its development and enhancement. For example, Wikipedia -- a free online encyclopedia -- is written and constantly edited by users.

Many Web 2.0 programmers eschew intellectual property protection and make it easy for data from different sources to be reused in different ways. "Mash-ups" such as housingmaps.com -- which combines Google Maps with apartment rental ads on craigslist.com -- create a completely new service by combining data from existing sources.

Web 2.0 proponents also have noted a shift in business and economic models in companies using the Internet. In an article in Wired magazine, Chris Anderson remarked that Internet companies conduct business in a different manner than bricks-and-mortar stores.

Traditional stores are forced by their geographical location and finite amount of shelf space to carry only those titles that can generate the most revenue, such as best-selling books and blockbuster movies.

Stores that conduct business on the Internet can carry items that may not have mainstream appeal, but still have a demand, even if only one sale a month. They also create tools to make it easier for consumers to find interesting items.

Anderson points out these companies make more money on non-hit titles than on the titles that physical stores are limited to carrying. This phenomenon has been dubbed "the long tail," based on the shape of the demand curve.

The same dynamic exists for cable television and radio. There can be only so many stations and they have only 24 hours of programming available. Internet radio and TV have no such limits and provide the potential for on-demand media.

There is much debate on whether the Web 2.0 concept is accurate or overly optimistic, whether this is the beginning of a fundamental shift in commerce and communications or is simply another wave of progression in the Internet.

Regardless of the answer, there is no denying the prevalence of key Web 2.0 concepts that may have profound effects on our use of the Internet.

David CantonIn the press, Web 2-0