Mapping the Current Web Transition
A year ago, I wrote a magnum opus three-part post that attempted to chronicle some of the underlying changes happening in the economy and how this would impact web technology ventures. "Useful, but too long" was a recurring comment. So, here is a one-year update, much shorter. And hopefully a bit clearer, seeing as we are further into this transition.
The Grossly Over-Simplified Web Transition Chart
| Pre-Historic | Recent History | Now | Future | |
|---|---|---|---|---|
| Phase | 1.0 | 2.0 | 2.5 | 3.0 |
| A.k.a. | Dot-com | Social media | Get real | Main Street |
| Social Media | Experiments | Closed SNS | Fragmentation | Open and pervasive |
| Revenue | Investors | Advertisers | Mixed | Subs. & Trans. |
| Advertising | CPM | CPC | Mixed | CPA = Subs. & Trans. |
| Content | HTML paid creators | UGC + RDBMS | Curate & semantify | UGC + semantic |
| Start-Up Hero | Investment banker | VC | Nobody | Entrepreneur |
Notes
Why 2.5? Because we are in transition. The old is still with us, and the new is emerging but has not yet arrived. This was also true when "Web 2.0" was coined: only later did orthodoxy emerge.
2.5 is named "Get real" because we all have to do that. The punch bowl was taken away.
3.0 is named "Main Street" because the web is maturing... for everybody.
Social Media: Closed social-network sites cannot survive in their current form, and yet they are so dominant today. So the transition to open and pervasive will be a big and messy fight... which will be great fun for journalists to cover!
Advertising: Advertisers will adopt a barbell approach: CPM for branding, and CPA for direct-revenue generation (as soon as publishers figure out how to make money selling CPA). CPC will still be dominated by Google but will become less dominant as CPA gains traction. Google will play in CPA and CPM but won't dominate as it does in CPC. Publishers will sideline CPA because nobody will be able to compete with the CPC price set by Google. Ventures that bridge the gap between publishers wanting to sell CPM and advertisers wanting to buy CPA will do well.
Revenue: Primary revenue will come from subscriptions and transactions, with advertising as one driver of those revenue lines. Today, we are in transition and in recession, so any revenue is good.
Content: UGC reduced the cost of content but created too much junk. Curation (adding human editors to automated UGC content) will be aided by semantic technologies that aim to do what humans currently do well.
Start-Up Hero: Today, it's "Nobody" because we are all in a hangover funk. In the near future, entrepreneurs really will hold the best cards; financiers will be secondary.
Funding: The "Big VC" model is broken but will carry on for ages ("Zombie VC"). Angels and small VCs are in the cat-and-bird seat today. But they need a revived public market or something other, which we'll call "private + transparent."
Prime Market: This is a century-long shift, like the one from Europe to America. Asia is not ready yet, America is in turmoil, and Europe is conservative, so this is another transitional phase.
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Yo Bernard. I had to read this post several times to comprehend. But I see that you really get it (whatever "it" may be)...
So I'm going to build a crowdsourced, semantically lubricated, cross-social-platform, content-creator revenue-shared internet Gerkin. I think it will do well in next years...
Great article. Comments on two items: curation and duration.
Readers will never stop valuing content curation, notwithstanding all the weeping at the sickbed of traditional publishing. A good example is HuffPo; a large proportion of their content is scraped (er, aggregated), but they have a pov, and it gives readers value.
I also disagree that this transition will take a century. Although it will be slower in many parts of the world, the transition to the last (non-final) stage will be much faster than that - 25 years at most.
Hi Bernard, I understand the foreseing exercice you stand for. Here I just do not get your point.
1. After web2.0, Web 2.5? Why? Where have you seen the end of 2.0 except with than with less financing and the stabilisation of major actors. As to me, web 2.0 will not be ended since the democratisation of the access to content will not be democratized just like access to content creation has been achieved. May be that is what you call web 2.5?
2. Get real? What is not real in what you have seen? What is real today?
3. Fragmentation? I kind of agree on that point but I think that some social services are mixing web contents to make conversation with. I would prefer "Mixing"
4 and 5 : I really agree with you
6.I am not qualified on that point
7.Nobody? You a re scaring me! It is not that because VC do not finance start-ups that entreprenors are dead. I am an entreprenor and I am struggling hard every day to improve my product and to entice my community. My hero today would be my "community" because it helps us to keep up, to innovate everyday and to go through this strange period.
I think the whole market has to be very careful not to fill itself way too much with Marketing Bullsh*t - web 2.5 and web 3 etc - seriously, give everyone a chance to get used to web 2.0!!!! We'll be up in the double digits in no time and that's just silly
OK this one is too short. One of the rules of good journalism is to spell out an abbreviation the first time you use it. Not every one of your readers is a total geek so I don't know what UGC is and some of the other abbreviations you use. Consequently I can't make sense of this chart. Please do a non-abbreviated version or provide a full index of abbreviated terms.
Thanks
P. S. It is "the catbird seat" not the "cat-and-bird seat"
Good post Bernard,
I agree with your global vision, but I would add the User Experience (UX) criterion that for me is the real decisive factor for moving from one era to the other.
UX in WEB 1.0 => "read and follow links in rigid patterns"
UX in WEB 2.0 => "write and exchange in adaptive formats"
..
UX in WEB 3.0 => "get it everywhere on everything => EasySimple"
...
UX in WEB 4.0 => "transparent, always, unnoticeable"
Nice article, should be made part of the overall BS that marketing is making of the web right now. Here's the thing, everything you have listed is evolution, nothing is revolutionary. Why name an era a new era if it's just evolutionary? Doesn't make sense, other than to hide the fact that the old tag got dirtied by the failures and now it's time to label the same old thing by a new label to suck in more unwary investors. :-) Don't by the marketeers BS please. Look beneath the hood. All the is going on is experimentation, and none of it is yet successful in the cash in the bank fashion. Whoever does that will be the real hero.
What would have been interesting would have been for you to have gone out on a limb and put who you think fits each of your categories. Who is the category leader in each? But that would have taken some balls. :-)
Anyway, labeling things that don't need labeling is always a silly thing to do, and something that is veryself serving. But the press really shouldn't buy into the market BS...
Wake up and Smell the Coffee...
I'm intrigued as to any ideas around how we move from Advertising to Subscription and Transaction based revenue.
I certainly agree with the premise that we need to get real, especially about the limits of an advertising subsidized world, but it's going to be a tough proposition to persuade people to pay for things they had previously got for free. The moment you charge becomes the moment a competitor sees a way to get users through unsustainable practices.
I'm also wondering to what degree Google have set the bar for ad-revenue at far too low a level - there are pages out there getting far more viewers than any newspaper or TV channel, yet they're not returning the same ad-revenue as their 'old world' equivalents.
At the end of the day, a TV channel or paper is based around a model where they need to invest in expensively produced content to attract an audience, and selling advertising space based on the size of that audience. Their profit lies in the gap between what they pay for content, and how much they can sell advertising for.
Google's model is quite different, in that they have no investment in the content, and a model than makes them income even when a million people view a million different web sites. As they have no investment in the content itself, they are not trying to recoup that investment in their advertising rates, allowing them to set them far lower than anyone with a content investment.
(No surprise, therefore, when they fund lobbyists against the paid content industry).
A good demonstration would be YouTube, where with viewing figures that would make MTV weep with joy, they claim they can't make enough income to pay similar rates.
It's also evident, looking at popular YouTube and torrent content, that users want more than UGC, regardless of the desire of Internet activists to turn everything into free content to suit their busines models.
Semantic web technology is cool, but we're still a ways away from broad implementation of stuff works.
The blending of radio, TV, and web will be fun to watch. We see a lot of opportunity.
Great article. But I don't think it will take a century.
I always saw 2.0 as a moniker, not a number. To me it means "whatever is next." We don't have Web x.0, we have Web. Now I must get back to Work 2.0
And we are going semantic. There is no doubt in my mind about that.
Really liked this post !!
Also take a peek at a compare and contrast I did a while back at:
http://bit.ly/3WosE --
Kingsley
i agree with most; this is just evolution; not revolution; and no money in the bank.
the only ones going for revolution are us.
Thanks to all who commented.
Ok, to all who objected to version numbers, I hereby officially renounce all attempts to apply a version number to the Web. It is an outworn metaphor. The Web evolves and nobody controls the release.
But I do believe that there are transitions and times when those transitions happen faster and become more apparent. Today is one of those times. Understanding transitions is important for entrepreneurs.
Re use of initials without explanation: UGC - User Generated Content. I assume most people will here will know VC, RDBMS, CPM, CPC, CPA.
To those who wanted a bit more detail, I will reply to Francois's detailed questions:
1. After web2.0, Web 2.5? Why? Where have you seen the end of 2.0
except with than with less financing and the stabilisation of major
actors. As to me, web 2.0 will not be ended since the democratisation
of the access to content will not be democratized just like access to
content creation has been achieved. May be that is what you call web
2.5?
A new phase builds on the previous phase, it does not stop the previous phase. They overlap.
The social media democratization is unstobbable. The issues are a) weak business models (meaning many sites/services are unsustainable) and b) a lot of junk content and/or so unstructured as to be unusable.
Semantic tech to structure this UGC seems like an important answer to the second issue and - maybe - the first.
2. Get real? What is not real in what you have seen? What is real
today?
The lack of real business models. Getting real means building services that are economically sustainable.
3. Fragmentation? I kind of agree on that point but I think that some
social services are mixing web contents to make conversation with. I
would prefer "Mixing"
4 and 5 : I really agree with you
6.I am not qualified on that point
7.Nobody? You a re scaring me! It is not that because VC do not finance
start-ups that entreprenors are dead. I am an entreprenor and I am
struggling hard every day to improve my product and to entice my
community. My hero today would be my "community" because it helps us to
keep up, to innovate everyday and to go through this strange period.
Sorry did not mean to ruin anybodys day! I do believe that this is the best possible time to be an entrepreneur. Crisis times open up cracks in the old order. I put "nobody" for now as this is a time for patient, grind it out hard work - non-heroic stuff in other words!
Really nice article.
I agree the future of the web and ads relies on CPA model and semantics techniques.
Check out ContextIn Semantic Advertising for a progress in this direction, or http://www.urlclassifier.com
I think calling 'nobody' the hero of the '2.5' web era is completely inaccurate. There are few Googles emerging, but there are plenty of small to medium winners.
Mr Lunn,
there is something I do not comprehend to question no. 2:
"2. Get real? What is not real in what you have seen? What is real today?"
Your answer to this question was: "The lack of real business models. Getting real means building services that are economically sustainable."
The stream of "democratization" has an effect, more social based services. But this social based services, like twitter or facebook, do not base on a economically sustainable principle. In fact, without an investor they could not survive. And who are these "investors" today - one of them is google. Now, how does google make money? With it's advertising service.
To me, open and democratic can survive only if it is profitable. And actually this is not the case. So - how does web 3.0 again look like?
Awesome post Lunn. Your thorough analysis of the past, present and future of web is remarkable.I agree with you on the past and the present (i.e. Pre-Historic, Web 2.0 and Web 2.5) but not with Web 3.0. and also, why is this naming? Web 2.0 was just a name and it encompasses all the latest in the web. Web 3.0 or 4.0 or 5.0, does this all make sense? I doubt. But the future is often not predictable.
1. It is very real today. Why? just look at the companies that you have and their market... all the big guys (FB, yahoo!, google etc') are 'real' business. Most of the start up do their best to stay lean and mean.
2. As for the numbers (2.0 2.5 etc') - don't take it too seriously. For me, 2.5 and 3.0 are almost the same in the sense they you know nothing about 'what will be there'.
3. As you understood form #2 - we are still in 2.0
J.
--
http://twitter-buzz.blogspot.com
Bernard, I actually read this and the other previous article you referred too. The more I reflect on what you said, the more I think you are right.
There is far more depth to your thinking that is apparent in a first reading of the article.
Very thoughtful post. I take issue with one small piece:
"semantic technologies that aim to do what humans currently do well."
I call this the AI model...where the goal is for machines to perform human tasks. AI is dead...t is unachievable and quite frankly not ideal.
Humans do certain things well (process things with very fine contextual distinctions).
Computers do certain things well (rapidly perform programmed tasks over massive amounts of data).
The ideal model is when both work together (i.e. machines pre-process large amounts of data to screen for humans, who handle the last mile).
I think this is the point you are actually making. I'm just choosing to wax on way TOO LONG about one piece of phraseology because I took it quiet differently.
Thanks for the post!
There is far more depth to your thinking that is apparent in a first reading of the article.
thanks
your comments is very good
Anyone who casts a blind eye right now on the Asian market will be sorry sooner than later. The smart investors/inovators will not try and replicate US tactics here, but will look at how to localize and serve the two biggest markets on the planet: Chindia is ready for mobile innovations and anything web 2.0-3.0 ...