Thursday, December 18, 2008

Web 2.0: A Strategy Guide

Web 2.0: A Strategy Guide (Kindle link,, my user review on

2 stars

Desperate Miasma of Buzzwords
Web 2.0 - the moniker given to the combination of technology enabled rich internet applications, collaborative user experiences like wikis, folksonomies, and more - has changed the way most people experience and expect the web to be. Google, Facebook, Twitter, Flickr, Wikipedia, blogs are all examples of Web 2.0 based companies.

What is less understood is whether Web 2.0, despite all its newness, hype, and substance, is only an incremental step in the path of the continual evolution of the web, or whether it represents a substantially, and fundamentally, different way of doing business on the internet.

Web 2.0: A Strategy Guide: Business thinking and strategies behind successful Web 2.0 implementations.
(the book page on the OReilly web site - this book is an attempt to try and make sense of Web 2.0. The book is short enough that it can be read in a couple of hours, is written for the average user and does not get into technical details or intimidating equations at any point. It has a very long list of references, which do add a lot of value to the book.

However, upon reading the book, you are faced with a constant barrage of disappointment, irritation, and finally a feeling of having wasted a good two hours of your time.

Tim O'Reilly has written the Foreword, and the best he has to say about the book is that (added stars mine) "It's the first book that really does justice to **my** ideas". The author makes sure to reciprocate in kind, thanking O'Reilly 'for championing this project and seeing **its breakthrough potential**'.

The purpose of the book is not to educate or inform, but to equip the reader with an arsenal of buzzwords. It is not what you know, but what you can pretend to know.
Sample these snippets:
  • "If you feel like .... or that you somehow walked into the middle of the conversation, you're not alone"....
  • "Second, even recent M.B.A.s have a hard time pulling together all the necessary pieces of the Web 2.0 business model" - many a Web 1.0 company went down the tube because MBAs decided that they were the experts in running technology startups.
  • " a shift as small as XML separating content from form..." - smalllll??? The move from HTML to XML based HTML is small????
  • "Web 2.0 companies have figured out a profitable path to growth" - really???? No evidence cited, no names, no revenue or financial statements. Just the evidence of an opinion is offered.
  • F, sample this: "You will learn about how to make money by monetizing the network effects..." - all in two hours of lightweight reading.
Assertions are made throughout the book, but without much by way of explanation, reasoning, or substantiation. Take the example of Flickr, which is the first Web 2.0 company described in some detail in the first chapter itself:
  • Flickr's business model is described as "freemium", but no details or numbers.
  • In the section on 'Calcuating Company Value', there is utter confusion: a number of $20 per user over a 3-5 year period for Flickr is arrived at by estimating the price that Yahoo paid to acquire Flickr in 2005. But that is distinct from how much real money was actually coming into the company. Valuation is NOT the same as revenue - a point painfully lost on the author. Look at it this way: Google has a valuation of $100+ billion. But it does NOT make $100b in revenues, or profits, or cash flow. In any case, this 'method' of valuation is no different than what was practiced during the Web 1.0 dot-com bubble.
  • And before the discussion on valuation can get complicated, the focus quickly shifts to Netflix.
The chapter on network effects is an improvement, with a short but reasonably acceptable description of network effects and the marginal/average/total cost function.
But here again, what is not explained is why the classic aggregate adoption 'S-curve' should be labeled differently for Web 2.0, nor why the product adoption bell curve should have a closed chasm (Geoffrey Moore - Crossing the Chasm) in the world of Web 2.0, except by stating that "free viral closes the gap". How does it close the gap? No explanation. Shoot and scoot.
There is further confusion when the author states in the paragraph titled "Avoiding the chasm" that "Product cost is a classic adoption barrier" - Moore certainly did NOT list cost as a major adoption barrier.

Chapter 3, "People Build Consensus" covers social networking, specifically Facebook and LinkedIn - two companies targeting different, but slightly overlapping parts of the social network demographic spectrum. The description of the 'six degrees' effect is described well enough. Other very pertinent and useful concepts and theories are mentioned, like 'Diffusion of Innovation' and the 'Bass model'.
What is, again, irritating is the needless repetition of sentences. "By mid-2005, requests for introductions had reached 25,000, and acceptance rates had increased slightly to 87%.", and in the very next section, the same is repeated, almost ad verbatim, "In mid-2005, LinkedIn announced that monthly requests were 25,000 and acceptance rates were at 87%." Why? Why?? Why??! Wouldn't the reader remember what he had read just a paragraph or two back?
How exactly does "frequent interaction builds community, trust..."? Take the author's word.

A profligate plethora of acronyms litters the book. Long tail. Network effects. Collaborative innovation. Web to wealth. Fremium. Collective user value. Leapfrog link. Competence syndication. Competence capitalization.Online recombinant innovation. And the list goes on and on.

Disjointed, rambling paragraphs interspersed with 'back-of-the-napkin' style charts, authoritative-looking links, economic terms interspersed with catchphrases are thrown in, and then on to the next topic. Scoot and shoot. Rinse and repeat.

A desperate miasma of buzzwords pervades the entire book. The best part of the book is its list of references, but here again, quantity trumps quality. The really good references are buried among the more than 280 references.

Save your money for something actually useful. I would suggest you read these books instead.