Jakob Nielsen, the former Sun Microsystems engineer who became a pioneer of “User Advocacy” on the Web and an early guru of experience-centered site design, posted an essay on his blog Monday that suggests Web 2.0 can be dangerous for your profits.

It isn’t that Web 2.0’s bells and whistles are inherently bad, Dr. Nielsen writes, “[t]hey can be highly effective…But it’s more common to find Web 2.0 ideas that either hurt users or simply don’t matter to users’ core needs.“ (Emphasis ours.) And ignoring your users’ core needs is bad for your bottom line, Dr. Nielsen argues.

AJAX, rich Internet UIs, mashups, communities, and user-generated content often add more complexity than they’re worth. They also divert design resources and prove (once again) that what’s hyped is rarely what’s most profitable.

We’ve known Dr. Nielsen’s work for nearly 10 years. He has invented several usability methods, including heuristic evaluation, and holds 79 U. S. patents, nearly all describing ways of making the Internet easier to use. Even if you don’t agree with him, about Web2.0, his is a point of view worth considering.

Pay attention to the end of Dr. Neilsen’s essay where he offers some brief tips for how to use Web2.0 tools most effectively on your site: “Different sites need different subsets of the Web 2.0 features,” he writes. A drag and drop feature might not be right for your site, even if you think it’s cool.

And check out Dr. Nielsen’s “extremely rough guildeline” for the proportionate benefit different types of sites can get out of a “Web 2.0 infusion”— the results might surprise you:

• Informational/Marketing website (whether corporate, government, or non-profit): 10%
• E-commerce site: 20%
• Media site: 30%
• Intranets: 40%
• Applications: 50%

Applications score highest because users perform many repeat actions — offering the most opportunity to benefit from Web 2.0 tools. Ecommerce or marketing & informational websites have generate few repeat actions, so enhancing the user experience with fancy Web2.0 features justs layers on complexity — and that’s bad.

Read his entire essay here.

And for more, Dr. Nielsen will conduct tutorials/seminars on web design through his consulting group, the Nielsen Norman Group: Fundamental Guidelines for Web Usability at the Usability Week 2008 conference at several times in 2008.