On a buildup from Web 2.0 we would like to address the later version, Web 2.11
Web 1.0 was the intial 1990’s blow up from boom to bust that took place like the California land rush. Leaving a dust cloud in it’s wake.
Web 2.0 or the whole ‘social media’ craze is showing that there are viable methods to generating traffic on your own, and the key is not to generate it but to use others to generate the content for you. Sites like Digg are monsters, they can crash servers right and left with a link from the main page of Digg (trust us, we know from experience).
The key to making a site Web 2.11 is a profit.
YouTube, with it’s massive base of traffic generated only $15 million in revenue for all of 2006 source.
Huh? The bandwidth alone is more than that. We are going to ask the question, the same question, that we asked in the mid-90’s…. how do you expect to turn a profit?
We are not trying to be ‘mean’ or to slam the traditional Web 2.0 firms, what we are trying to point out is that honestly how profitable could firms like YouTube be (if Google didn’t buy them).. how long would it of lasted if other firms didn’t buy it.
To make matters worse, YouTube is getting nailed with huge lawsuits, the cost to defend will be more than all the revenue generated from them in 2006.
When starting a new ‘Web 2.0’ firm, please note that at the end of the day, it’s not the 1990’s term ‘eyeballs’ that will allow you to succeed, it’s how many dollars in vs how many dollars out.
The concept for Web 2.1 is still not really the focus, hence the problem. We want these firms to continue to grow, VC won’t do it, a well thought out business model that shows a simple metrix will.
That Metrix being ‘it costs us X to bring in a visitor, host the site, and pay to keep the staff and the lights on, and it earns Y when they are there’ The X should be smaller than Y.