How can you make money from Web 2.0 was the main question put to the Web 2.0 and Beyond: What Is the Business Reality panel at Microsoft Mix yesterday. Featured in the video is Frank Arrigo (Microsoft), Bryan Biniak (CEO Jacked), Tim Kendall (Facebook), Loic Le Meur (CEO Seesmic), Chris Saad (Particls).
The responses from Kendall were interesting. Kendall argued that Facebook is failing because the majority of the audience put their hands up when asked the question “have you seen ads on Facebook?” Apparently Facebook believes the best ads are the ones users don’t know are ads. There’s some talk about beacon and open access as well.
My question about Web 2.0 business models (or lack there of) is the second question in.
The video quality isn’t great, slow internet aside we should have a better copy up soon.
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make a new social networking site.
make a new social networking site in china.
Sound quality is not the best… waiting for another better copy
Simple - there’s no money to be made in Web 2.0 — Web 3.0 thats where the real money is!
good post Duncan and god to hear your voice!
struck me that the title of the story is a little misleading - I don’t think anyone answered the question of how to make money……
Looking forward to the better copy, looks very interesting, but not audible even on a fast connection and fast machine…
@ Arona, I think there was a lot said about how to make money, but different people interpert things in different ways…
@Duncan… dude, you need a better mic setup. Look for a shotgun mic.
I love this type of raw interview format. I don’t mind having to strain a bit to hear the audio as long as what the people are saying is worth listening to, and most of what was said in this vid was, to me anyways.
Whether you want to call it Web 2.0 or Web 3.0, I feel that pseudo-currencies are a creative way to make money. On Taltopia, for example, users can either earn Famebucks just by using the site OR they can purchase them using Paypal and/or credit card. These pseudo-currencies also help to bring a certain stickiness factor to any site’s user base.
We just got $800,000 in Series A Funding, and as a reward to all of our users, we donated $5 worth of Famebucks into each account…our members were ecstatic. Pseudo-currencies offer this flexibility.
http://biz.yahoo.com/bw/080305......html?.v=1
Allen Vartazarian
http://www.taltopia.com
allen@taltopia.com
Couldn’t quite hear what they were saying in the video. But I thought the whole trouble with Beacon was that they were trying too hard to make the ads an integral part of the Facebook experience, to the point of compromising the privacy expectations of their users. Search is one of the very few places where the ads can basically merge with content without confusing or pissing off the user. I’m not sure Facebook can ever achieve it in a non-creepy way.
I only wish i have been trying for years. It takes time and money to be successful on the web and also have to be able to attract members.
“Facebook believes the best ads are the ones users don’t know are ads”
Google has been doing that for ages, and just now facebook realizes that?
Slow learners I guess
Some folks have figure it out. Many of the vertical social networks have been able to make a living at it. They don’t get the attention because they can’t grow to 20 million users like a facebook, BUT they have targeted, interest specific members that drive decent revenue and profit (Dogster, Cafe Moms, etc) Maybe it is because the bigger sites were never built with revenue generation in mind! Remember, it is like T.V., content drives adds, What is the “content” on Myspace, or Facebook?
@ 2. “make a new social networking site in china.” I mean there isnt a bigger GOLD mine anywhere else in the world except CHina right now, if you could cut in that market, we are talking more money rhan you know what to do with!!!!!!!
Great post although I disagree on the business model. Not having revenue is fine if you want to go the VC route but anyone trying to bootstrap a company (which is entirely possible today) can’t afford to do it. In the end, I think the companies that learn to grow and make money will be more successful.
You make money by having a product or service that is “worth” paying for. You don’t make money by trying to make a better cola that people pay for (google docs, zimbra ect). Branson tried this with 1 billion dollars with virgin cola, totally lame. In the end, it was a complete waste of money. Create a product or service that I am willing to pay for, then I will be your customer. It appears to me web 2.0 is about “not solving problems”.
@mmt What? Are we back to the “VC IS revenue model again?” At some point, someone needs to be making some money or no one eats.
“In the end, I think the companies that learn to grow and make money will be more successful.”
hahahahahahaahaaaa…..
It’s good to see that Web 2.0 has learned the first thing you should have known BEFORE starting a business after only what, 2 years? Wow…
@ chow “It appears to me web 2.0 is about “not solving problems”.”
That’s only partially true. The problem being solved is that such said services live within the cloud and therefore are accessible and more collaborative. I haven’t replaced word and excel with Google docs & spreadsheets, but my team uses them for simple collaboration on non-confidential info. The next gen of the web is just getting started and the ones building real applications will continue to see the technology on these evolve nicely over time. These types of services are the future of the web.
With that said, there are way too many people just copying old-school methods and code. These are the companies that I would suggest fall into your comment’s scope.
Frank Arrigo (Microsoft), Bryan Biniak (CEO Jacked), Tim Kendall (Facebook), Loic Le Meur (CEO Seesmic), Chris Saad (Particls).
That’s an odd panel….
Everyone knows the best way to make money from Web 2.0 is to pretend that you are making money from Web 2.0, then write a book or start a blog.
btw please visit my site
http://www.howtomakeagajillion.....urarse.com
but Zuckerberg’s a billionaire…
response to 2# social networks in China are not new any more. It is unlikely to make money by set up new social network.
I guess this is the million dollar question.. it’s the quest for all entrepreneurs. now one really know what the answer is..
Honestly..If you are building solutions and looking for problems, you ain’t gonna make it. It has nothing to do with Web2.0 or 1.0 or 3.0…the idea of business has not changed over the years, just the way it is done and the market frontiers have changed.
If a startup(any startup irrespective of the jargon) focusses on cashflow(not so much on profit, I’d like to quote Amazon here) along with the obvious “problem you are solving” & “target demographic”, it will make money and it will eventually succeed.
I’m not sure Kendall’s beliefs make sense. The best ads aren’t the ones that trick you into thinking they’re something else — they’re ads that people just actually want and volunteer to watch. Transparency on the Web is key; consumers know when they’re being duped online.
I thought Web 3.0 was all about the money (to be made) and the building of 7 billion niche social networks to monetize the entire Internet.
The sound quality on this video is so bad I can barely make out 50% of what they are saying.
Trying?
I think there is lots of money to be made in Web 2.0. If you look at Google they didn’t really know of the correct monetization model to use when starting out but they tested and eventually found one. I think Facebook’s monetization are lacking because they give up users privacy. I am amazed how often I see good startups go out of service just because they could not figure out how to monetize properly.
Is Beacon making money?
How do they make money off of Beacon if “the best ads are the ones users don’t know are ads”?
is web 2 concepts differ from web 1??
its all depends on markting
Duncan, speak to Heather. She has our latest deck in hand showing our profits for the last 2 years and 7-digit profits this year. If it’s worthy of coverage on TC, I’ll gladly do an interview to share my thinking.
Regards,
George
Thank you for your question, Duncan!
Seriously, why is it that most internet start-ups fail to recognize the importance of a business model?! What business schools are these Internet “entrepreneurs” going to?? Oh wait, they’re not.
A business can neither exist nor prosper if there is no money… in the real world. Must everyone not forget that a website regardless the product or purpose is a business. There exist expenses. The expenses vary depending on the goal of the website. In order to function, revenues need to be made. For some reason, Web 2.0 companies want to defy this logic. As Tim Kendell argues that an internet company should wait to implement a business model or any monetize-able elements until they have established themselves aka attract users, there are very few sites out there like Facebook that have attracted as big a following. Agreeing with NoNo, every company needs to rely on marketing (50%) AND a business model (50%) particularly Internet companies. A business model can and should be very much intact in the beginning; however, the business (web-based) must then rely upon marketing in order to differentiate themselves from the masses of ineffectual “web 2.0″ companies.
I think the reason for this flawed logic is that many people who started out creating these websites had no expectation for becoming a business or making any money. Now, with huge injections of capital from deal-starved and starry-eyed venture capitalists, there are now more than ever high expectations for the “web 2.0” start-up. And groups like Facebook are guilty of having instilled this false sense of business upon the aspiring Internet entrepreneur.
Making money with web2.0? If the web2.0 core is “do it for love not for money” the question may instead read “how web2.0 modifies value chains”? The issue is that Web 2.0 is just a tool revolutionizing the distribution of value along the chain, specially unlocking the still unexplored money making capacity in the long tail. Web 2.0 money making is in the cross fertilization of other business. The core activity in Web2.0 shall be not-for-profit otherwise it would alienate the collaborative and participative users’ interest (and pleasure). The value of a web2.0 enterprise is in its capacity to widely impact on others’ value chains, therefore interacting with their capacity of making money. By the simple fact of managing these results there is creation of value that markets can understand and reward. Web2.0 opens the era of semantic money making…
Web.20, Web.infinity…it does not really matter. The crux of business is to give the people what they want and bring value to their life, once you achieve that, they will pay for it (within reason). If they feel that your business/product/site
gives them pleaseure (porn sites) or saves them time and money (Travelocity)
or makes their live easier (the internet) they will buy it and support it.
The web 2.0 social sites only deliver half of the pie.
Just my 2.0 cents,
Volonte
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