Could Web 2.0 be Bust 2.0?

I love the new internet.  I love the ease with which content can be shared, stories can be told and communication is being revolutionized by those sites out there which we so buzzword-tastically refer to as Web 2.0 (though that may be the last time you hear anything refered to as buzzword-tastic).  All that said, I really hope that the 2.0 version of our online world grows up fast enough to realize that just because new and effective online business models are making the internet bust a more forgettable phenomenon, it doesn’t mean it can’t happen again.

Reading trades, attending industry events and speaking with those in the know, it seems that everyone is rushing to set up a social media arm of their online business and a video sharing or broadcasting portal while rushing to engage their audience in conversations.  Proving how seduced by this phenomenon the media is becoming, the CBC received press in nearly every major Canadian television, marketing and advertising daily for setting up a Group on facebook.  I know people whose dogs have a group on facebook.

My point is that, to what end is all this happening?  As we saw in the late 90s, the online world is a medium so vast that it’s easy for everyone to jump right in.  This is a distant phenomenon from the early days of television when it simply wasn’t an option for anyone and everyone to simply start up a network.  But the astronomical costs of starting a television network dwarf those needed to jump in and start a community of your own, and its because of this that it seems there isn’t a brand out there that’s trying to capitalize.  But how is it that their capitalizing?  Where’s the business model in starting community after community to further fragment and disconnect audiences, missing that the entire appeal of social media is to be connected?!?!

Interestingly, the web found its footing when it began to amass sustainable audiences and looking to the old media solution of advertising to commercialize them.  This is one area where the (growing number of) Joost’s of the Web 2.0 world have a slight leg up.  They still have their problems, but an old revenue model saved them – so they get excused for a minute.
Unfortunately for most other offerings, the point of social media is to be transparent, so using it to formally advertise can be difficult and banner ads are often something that just don’t have a home in this environment. Furthermore, as advertisers will tell you (when they’re not trying to sell you on their own community building services), there’s no concrete way to assign value to most online social activities.  Sure it’s an incredible thing that you can see people reacting to your brand – but how many chocolate bars or cars or boxes of detergent does that really sell?  Its hard to say.  In fact, in some cases, it’s almost more of a research initiative than a marketing one.  And yes, its an incredible accomplishment to build up a community from scratch and create online audience – but if that audience isn’t engaged because they have to split their time between every other community of interest they belong to, how valuable are they really to your brand?

In the early days of television, those who didn’t have the finances to start their own network discovered that there is a symbiotic relationship and an entirely lucrative business to be made in providing content for that network.  But imagine if the barrier to entry was so low that there was able to be 300 or 3000 or even 30,000 networks competing for the time of an audience still figuring out what this television thing was really all about?  Not only would an inordinate amount of companies have lost their shirts, it would have distinctively effected the course of growth of television.  It was when television began to realize this value chain – that you didn’t need to have the audience directly to capitalize on it.
While the online audience is vast, people simply don’t have the time to spread themselves thin enough to make all of these brands diving into the social media space a winner.  We see this happening not only in the rush to commercialize the nets first great online video portal, but throughout the sphere of social media – competition is rampant. While I still cringe when its termed this way, the internet is a new media.  So maybe its time for them to again look to an old media to help solve some of their not-so-new problems?  The reality is, there will and can only be so many NBC’s, even in the vast world of online content.  There are only so many people on the net and so many hours in the day.  Not every company that jumps in for a slice of the pie is going to get one.  The sooner that we figure out that, while the medium has changed, audiences really haven’t, and begin to create and accept a real value chain in the world of online content, the better.

Then all we’ll need is a better busines model…. sigh.