Christopher Koch, of CIO magazine, argues that what we’re seeing with the “Web 2.0” hype is a rerun of the ill-fated “B2B”* craze that came at the tail end of the dotcom boom. With B2B, the buzzword was “collaboration.” With Web 2.0, and in particular social networking, the buzzword is “community.” Both buzzwords, says Koch, are equally bankrupt:
I’m not seeing real objective evidence that Web 2.0 and more specifically, social networking, are creating real communities. I think community is the code word of denial of the 00s, allowing people to slide past any discussion or proof of real value, just as collaboration was the code word of denial of the 90s for the disastrous wave of online b-to-b exchanges that wasted millions of investors’ dollars … Online exchanges have either died altogether, have morphed into software companies or in rare cases have actually survived, but only in instances where the “collaboration” is the buying and selling of commodities like chemicals. That’s not collaboration; it’s an online catalog.
Like the B2B exchanges, he says, social networks offer only the illusion of value. The only community is a community of shared delusion. If you take a hard look at MySpace, for instance, you’ll find, argues Koch, “a hopelessly large, undifferentiated lonely hearts club that’s potentially unsafe and embarrassing and provides little hope of real value exchange.” Nevertheless, companies “are jumping in with both feet,” hoping for a quick marketing fix:
The current hype says that companies can give “buzz” to their products by creating communities around them online and involving consumers. Sears is setting up a store in Second Life. It’s hard to read the press release without wincing. How many avatars will want to hold off flirting with each other long enough to schlep their avatars over to Sears to look at kitchens in blocky 3-D? … But [such] warning signals haven’t stopped the marketers and gurus from selling community the same way they sold collaboration and electronic commerce in the 90s: That you’re a fool who will fall behind your competitors if you don’t accept the inevitability of it all.
Koch’s skepticism is welcome, and there’s much truth to his observation that there’s a wide gap between the grand assumptions about the business value in social networks and the paucity of evidence of any actual value. But whereas the B2B exchanges depended on the delivery of value through collaboration for their existence, I’m not sure that the social networks’ success relies on the delivery of community value. To businesses, the value of social networks lies more in their roles as a medium for advertising and a repository of marketing data than in their role as a place to develop some kind of communal relationship with buyers. The community stuff is largely malarkey, as Koch says, but that will be beside the point if the networks prove themselves to be worthwhile channels of ads and customer intelligence.
Let’s face it: “social network” is itself mainly a bullshit term made up by eggheads outside the networks who want to see in them more than is actually there. As Fred Stutzman once pointed out, only a tiny, tiny portion of the members of social networks actually do any “social networking.” Their interest lies in exchanging messages with their (real) friends, goofing off, scoring some free songs or videos, and scouting for dates. Ask a MySpacer what a social network is, and he’ll look at you like you’re from another planet. Which you probably are.
*A note for the young’uns: Back in the Nineties, we thought it was cool to abbreviate “business to business” as B2B. Don’t ask me why.
Nah, that’s the wrong analogy. Widgets are the B2B of 2006.
2000
Nobody’s coming to your late arriving ecommerce site? Not to worry, just go “B2B” and license your service to enterprises.
2007
Nobody’s coming to your late arriving social network? Not to worry… just widgetize your content and feed it to the MySpace beast.
But unlike those bogus B2B vertical exchanges – i think widgets have legs. They’re infinitely cheaper to build and maintain than a B2B company (which requires a sales force and a long sales cycle).
It’s still unclear if widgets will end up being any more capable of generating revenue than the vast majority of those dead B2B exchanges however.
Two things:
1) You say, “As Fred Stutzman once pointed out, only a tiny, tiny portion of the members of social networks actually do any “social networking.””
I happen to like danah boyd’s disambiguation of social networking sites versus social network sites. It can be found in her definition of social network sites.
2) Koch says, “How many avatars will want to hold off flirting with each other long enough to schlep their avatars over to Sears to look at kitchens in blocky 3-D?”
How many people go to Sears because they’ve been dragged their by their partner? I’m not defending the model, by any means, but just because they’re flirting doesn’t mean they’re not doing anything else.
It’s also entirely possible that this drive can result in volunteer marketers, consumers supporting your brand on their own dime. But that only works for some methods, of course.
I think the real value of Web 2.0 is not “community” per se, nor the rich user experience (aka Ajax), nor the concept of read-write web, but rather: Collective Intelligence as pointed out by Tim O’Reilly in this post [The original image comes from the Open Gardens blog.] Of course, this discussion was circa 04/2006, so I’m late to the party.
Collective intelligence is what makes a community valuable, or even Google, for that matter.
NitinK, well then, what intellectual problem that Collective “Intelligence” could solve? Something like “what’s all the rage today?” I guess.
There are areas where web2.0 related sites are actually creating value. I am working in science and I can give several examples where web sites focused on this “useless” collaboration meme are helping me. I am using social bookmarking sites (citeulike and connotea) to get interesting scientific papers (highlighted by a community). I use Google Docs to co-write documents (before we just bounced emails back and forth). I have access to what scientists have said about science papers from a blog aggregator called postgenomic. All these things make me work more efficiently and are all directed at online collaboration.
Sergey:
Well, certainly, “what’s hot” is one problem that is an obvious target (almost by definition). To generalize that further, the issue of findability of relevant, quality content on a given topic [a la Wikipedia] is another target for the application of Collective Intelligence.
A more explicit approach is the surprising accuracy of Prediction Markets, which can be used to solve complex problems like predicting the accuracy of a project schedule or the potential of a new technology. [Yahoo had a confab session about PMs recently.]
Skepticism so early in the cycle? Hmmm… maybe we will avoid the bubble. Nah, probably not.
This stuff (i.e. web 2.0, collective intelligence, etc.) is probably just like every other “big idea.” Looking forward it is a “big idea,” applies to everything, and will change the world (the entire world). Looking back it turns out to have been a small-to-medium idea, applies to some things, and changes a little bit of the world in ways that mean a lot to some people, and isn’t even noticed by others.
B2B was going to change the way things were bought and sold in fundamental ways by unleashing collaboration and yada yada. It probably didn’t. But, it did change the way many many transactions are processed and increased efficiencies in the process. For many businesses it has also softened the edge between the enterprise and it’s partners in ways that enhance flexibility.
“Web 2.0” and it’s pantheon of buzzwords will probably do the same thing. After a brief period of harnessing collective delusions to spend money on all kinds of silly things, we’ll all quietly go about the business of applying some widgets here, some community processes there, and etc. And… we’ll probably approach a lot of things differently without even realizing how much our underlying assumptions have changed to incorporate community and related concepts.
Heck, even the printing press didn’t change everyone’s world.
Jim nailed this completely. It’s a tempest in a teapot that we all happen to be intently watching. Once our focus shifts, it will still be there, but it won’t seem as important.
What I see as the saving grace of today’s over-enthusiasm is that so many of those involved well-remember the b2b ballyhoo. I want to believe that there’s just a bit more pragmatism (cynicism) surrounding Internet-based technologies today than there was 8 years ago.
nick, had some thoughts on this as well, back-in-the day (this piece was from june2004, before AO broke all their old links)
Understanding the future of social networking
Pull quote: “So, what happened with net markets? Why did they fail? And, more importantly for today, does the implosion of net markets in 2001 give us any indicators of the future path of social networking systems?”
I think you’re getting confused in the social network terminology space there (and love the dismissing of eggheads, but that’s another story). The point of social networks is not ‘to network’ in its resolutely non-egghead business use meaning to develop new contacts that one might exploit to push some business use, but instead network in the sense of interconnected entities. The social network captures (well or less well) relationships between people and allows you to do things like show your friends what you’re up to, or share things with trusted groups of people, and it means that site’s like Flickr rather than being one huge unfathomable community that would be full of griefers, spammers, fights and arguments is actually comprised of as many communities of people as there are people in the system. (And before you say it, not in the clumsy sense of a bunch of happy hippies stroking one another, but in the sense of a group of people who have relationships and a possible strength of feeling between each other.)
I’m puzzled. Surely you understand that individuals derive value from their relationships with their friends, want to do things with those friends (whether that be socialise or create or share) and that they occasionally want to meet and flirt with new people? If users derive value from this stuff, then there are ways that businesses can do so too. It’s not an enormous shock.
I’m also a little confused — when you say that “social network” is a bullshit term, are you talking about the decades of social network theory or are you just using the phrase as lazy shorthand for something else?
You have social networks, you’re in several I expect, and social network sites help one communicate in some way (sharing photos, text, job ads, etc) among your network and may also help you expand your network.
Saying “social network” is bullshit is like saying there’s no such thing as society – whatever you call it, it still exists.
OK, I’m looking for trouble.
The comparison between social networks and B2B is flawed IMHO. If nothing else because B2B required massive upfront investments – somebody had to be sold in.
When returns did not materialize, those who were “sold in” became “shafted”.
Not so in social networks which happen (the true ones) no matter what. Usenet thrived and still does without any investment by anybody. It’s there, whether corporates like it or not.
Exploiting social networks for a business purpose – ahh, that‘s different, very different, and I agree, probably very elusive as well.
However, there are some interesting early examples.