Paul Kedrosky and Jason Calacanis have both written posts today about how the real story behind Web 2.0 is the spectacular growth in online advertising revenue.
If you look at the stats that Paul’s linked to, it’s clear that online advertising is still a baby, nascent market. Despite its torrid growth, the money spent on online advertising is only a fraction (about 11%) of the money spent on advertising in newspapers. And I’ve had numerous discussions with one of our EIRs who was the former president of Knight Ridder Digital, Tom Mohr, about the state of the newspaper industry. It’s clear to me that the newspaper industry is going the way of the dinosaur unless newspaper companies can figure out how to regain their relevance to end customers and reinterpret their role in providing the glue tying together regional communities. So I firmly believe that online advertising is still in infant stages. If online advertising were an infant, I’d say it’s crawling and can sit unsupported, but it’s not yet opening doors on its own or coloring in a coloring book.
While the online advertising story is an exciting one, it’s not the real, real story behind Web 2.0. Online advertising is the derivative story. The first and foremost function we should be paying attention to? The increasingly blurry line between our online, virtual selves and our real world, physical selves. In the Web 1.0 era, folks used the Internet as an adjunct to their normal routines. Now, in the Web 2.0 era, the line between their offline and online lives are blurring such that the Web, the communities we participate in, and the tools we use to communicate are an integral part of our quotidian existence. There’s so much to monetize on the advertising side because as Jason rightly points out with video and audio ad stats, folks are moving their lives online.
This is interesting to me, because it puts evolutionary pressure on our assumptions about identity, relationships, commerce, and culture.
The Web 3.0 story is NOT about AI, as John Markoff would have you believe. It’s about continuing down this path of improving the user experience of living and socializing online. This story is about human context, social proximity, and a sense of place.
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November 20, 2006 at 7:02 pm
Graeme
One of the beauty’s of Web 2.0 is the ability for users to comment on articles, blogs products etc immediately. In other words, user generated content. The only “user generated” content in the newspaper world are the letters pages. But you still have to wait over a day to get this content published. Even then the letter editors need to limit the amount of letters that are published due to space restrictions. Imagine that every single article in a newspaper could be commented on, just like the online world. If the newspaper content was delivered via connected electronic paper, readers could comment just like the online world. Then perhaps the traditional circulation based “newspaper” methods may still be valid.
November 30, 2006 at 3:20 am
boiboi
Greame, check this out:
http://publishing2.com/2006/11/18/a-lot-of-user-generated-content-is-really-user-appropriated-content/
March 13, 2007 at 11:37 pm
SXSW Panel: Web 2.0 to Web 3D [part 1] « Susan Wu - Venture Capital
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