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Summary:

David Galbraith, a good friend of mine, is not a man of extremes. Polite to a fault, he uses logic to make his arguments. Today, in response to our My Maps post, he wrote a stinging piece, The Day Web 2.0 Died. Hyperbole? I don’t think […]

David Galbraith, a good friend of mine, is not a man of extremes. Polite to a fault, he uses logic to make his arguments. Today, in response to our My Maps post, he wrote a stinging piece, The Day Web 2.0 Died. Hyperbole? I don’t think so, though I would like to make his case, while opting for a milder headline.

tiedyedshirt.pngThe Web 2.0 story so far has been about taking APIs, mashups, low cost infrastructure and building applications that are then offered to customers for pretty much free, backed by an ad-supported business model. Think of this as the tie-dyed-free-love hippie phase. The Web 2.0 conference held in San Francisco in Fall 2006 was its Woodstock.

A lot of good things happened, innovation blossomed, but now we are entering a more pragmatic phase, where the large players like Google and Amazon who distributed the API elixir are taking control back.

Google My Maps is a case in point, where the company is competing with its “users.” Don’t worry – it won’t be the last time you will see Mountain View adopt tactics that in the past were associated with Microsoft. Keeping that $145 billion market capitalization intact is a bitch!

Google is not alone, as one of my readers points out. Michael Arrington has been following the feud between Amazon-owned Alexa.com and Alexaholic (or whatever it is being called this week.) In the end Alexaholic/Statsaholic features ended up becoming part of Alexa.com offering. Why let a little seemingly parasitic service live if you can make ad dollars off those page views?

The Flock-Coop conversation from earlier this week is yet another part of the Web 2.0 jigsaw. The emergence of hybrid web applications or MySpace flexing control over its widget ecosystem are all part of a fundamental trend that can be summed up in two words: Get Real!

The fundamental tenets of Web 2.0 or what I like to think of as the connected web are as valid as ever before, when Tim O’Reilly wrote his manifesto. However, innovators, entrepreneurs and even larger players have to take off the rose-tinted glasses, and worry about web giants’ ability to go from friend-to-foe almost overnight.

What do you do then? How is your business model impacted by such moves, and how much wiggle space you have to charge your customers? In other words, one can’t be wide-eyed about anything anymore.

The current situation is no different than the dating process. The first few months of flirtation are full of romance, where all you choose to focus on is your partner’s best qualities. Three months into the relationship, the nose hair, shoe fetishes and other habits come as a bit of rude awakening. We all adjust, if we believe in the relationship. If not, we go looking for a new love.

It is hard to fault Google, Amazon or News Corp: they are publicly traded companies that have powerful shareholders, who demand (not that they get) some kind of financial accountability. As a start-up, you have to think of your worst case scenario.

In response to Google’s My Maps move, Platial had this to say on their blog.

While no entrepreneur is excited about potentially competing with Google, it had to happen…. There are a number of friend/foe relationships that spring up when you have alliances and markets with rapidly evolving needs. Our business will be disrupted too in some ways but it was time.

I would like to call it, the End of Innocence.

  1. I like your tagline better. Stripped of the belief that the heavyweights want a love-in, the guerillas that drive Web 2.0 will run rings around the heavyweights better than they have done before. Hardly an end…maybe a more REAL beginning.

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  2. It should be interesting indeed once Major players take back control of their respective API’s.

    Another thing yet to be witnessed is Youtube’s profit sharing model with its users. A likely scenario of this could lead to a price on using Youtube’s huge repository of videos. Hence all the websites which are dependant or using on youtube videos on their sites will have to pay a small fee for access. Here’s a good way for Google to make money and share with youtubers…

    Danial Jameel
    http://www.UReporting.com

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  3. Excellent post!

    web x.0 is alive. Several new startups will challenge web giants.

    Cheers!

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  4. I admit it, I was link whoreing with the headline – slap wrists.

    Web 2.0 won’t die till next week.

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  5. It’s just reality. I read some stories about company valuations, that are based on the premise of other sites… which does not make sense.

    It does remind me of some of the stories from the dotcom era (hey, I was here at least), and the innocence (and lack of memory) that seems to be part of Web 2.0.

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  6. [...] See the full article at Web 2.0: End of Innocence. [...]

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  7. Om – good points all around. In my eyes this is (finally) the “reality check” that “2.0 entrepreneurs” need to see in order to go back to the drawing rooms and go off to build business that are truly innovative and differentiated.

    @Greg: why exactly will the “2.0 guerrillas” be able to run rings around established companies?? Because they know AJAX, or because they have more sound business practices?

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  8. …those who insist on attaching their hopes and dreams to the bodies of charging giants’ APIs…may be destined to live the life of a lamprey…able to take in just enough nourishment to keep from starving…unless the giant decides to cut off their food supply entirely…

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  9. @ Jeremy

    Because the guerillas know where to look and who to correspond with to get the latest breaking innovations they can incorporate into their arsenal. I wasn’t just thinking about code (and certainly not AJAX) either…guerillas are able to produce better content quicker that incorporates all facets of media while bigger content companies are still deciding on what powerpoint template to use for their storyboard.

    One example of a guerilla is Farouk Olu Aregbe, the guy who got 200,000 people to sign-up for an Obama Facebook page in two weeks (while I’m sure some established political strategist was deciding what font to use for a document that would describe how to tap into the youth vote).

    It’s just my two cents, but I think a lot of people want to find a way to get rid of the name 2.0 so they can come up with their own conference. Open Source is not going away. Grass roots wildfires are not going away. Broadband adoption is not going away. Am I missing something?

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  10. @ Greg

    Great points all around. The one area I don’t completely agree with is the blanket concept that big companies/orgs can’t possibly move fast. Sure I agree that guerrillas tend to be quite nimble, but oftentimes their agile maneuvers do nothing in the long-term but point the big guys in the right direction… The Facebooks/MySpaces/YouTubes are much MUCH more rare than the 30boxes/flocks/etc…

    Make sense?

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