Defining Web 2.0

I was recently sitting in a presentation at a conference about the latest offerings from Myspodblog. This presentation, not unlike several others I've heard, was being given by Dan. (Obviously Myspodblog is ficticious and AFAIK I haven't actually seen any presentations given by anyone named Dan.) Dan was busy highlighting the latest Myspodblog offerings when he said, "Myspodblog Pro Developer is the Web 2.0 product. It allows you to both develop and consume Web 2.0 applications." Wow! That's great. I guess I'll have to check out the latest version of Myspodblog Pro Developer as it will allow me to jump on the Web 2.0 bandwagon. Hmm. But I wonder. Just what is it that Myspodblog does?

This short story, which I've actually lived in slightly modified versions more than once or twice now, highlights a key problem with the term "Web 2.0" - ambiguity. (Actually, before I go any further I feel I need to clarify that I generally like what's associated with Web 2.0. It's the term itself with which I have a problem.) Web 2.0 has come to be used as a catchall term for everything and anything related to the cool Web. It means online collaboration and social computing, it means multimedia applications, it means improved Web based UIs, it means new ways of connecting applications, it means technologies such as AJAX and Flash, and it means taking traditional desktop apps online. Web 2.0 encompasses an extremely large and diverse set of technologies including blogging, sharing through sites like del.icio.us and Facebook, youtube, mashups, Dojo, Rico and Ruby on Rails, and Writely and online spreadsheet apps. Web 2.0 generally means whatever the person saying or writing the term says that it means as there is no accepted, concrete definition.

Now, you may be saying so what? All my story above shows is that marketing doesn't get it. Well, if the problem was just one of marketing I would just leave it at that. The problem I've found is that with the term Web 2.0 in particular, the problem of using a term without a specific meaning has spread from marketing to the tech crowd. Specifically, I've heard this term used without context in technical presentations and read it used in the same way in technical articles. (I purposefully have not linked to any articles or presentations as I do not want to call out anyone specific.)

I'm not the only one thinking this way and others are actually working to resolve this ambiguity. The Wikipedia entry for Web 2.0 covers a lot of the criticism of the term and the contributors to this page have done a fairly good job at providing a definition for the term that covers its breadth. Tim O'Reilly also acknowleged this problem in an article he posted last year (see What Is Web 2.0) in which he discusses the coining of the term, the differences between Web 1.0 and Web 2.0, and provides seven core competencies that Web 2.0 companies should display. I think both the Wikipedia entry and Tim's post are good reading so I'm going to let them speak for themselves rather than attempt to summarize them here.

My point with this post was not to define the term Web 2.0. I doubt that I can create a definition that will adequately cover everything I've said above and appease the crowd at large in a single blog post. My point is that you should know what you want to say about Web 2.0 before you say it and define Web 2.0 for your context when you use it. Put simply, think before you speak.

Is Google a Tech Company?

I think you'd be hard pressed to find someone today that hasn't heard of Google. The company that started by beating up on search giant Yahoo is now much more than simply Web search. Google is still search. But Google is also GMail. Google is Maps. Google is blogger. Google is youtube. Google is the epitome of a Web based company. But is Google a tech company?

It seems strange to question Google, the behemoth that revolutionalized search and brought AJAX to the forefront of Web technology with killer apps like GMail and Maps, seeing as we usually ask Google for answers. So let's take a step back from this question for a minute to come up with a definition of a tech company.

What is a tech company? Or, how do you define what is the primary business of a company? I assert that you can get a good sense of the primary business of a company by the category of revenue that is greatest for the company. Let's take a look at some other known tech companies to see how my assertion holds up. (A little disclaimer up front that I'm not a financial expert and the following analysis is based on my naive understanding of the reports for which I've provided references.)

Let's start with my employer, IBM. In 2005, 52% of IBM's revenue came from services, 26.7% came from hardware and 17.3% came from software. (See IBM's 2005 annual report for the details.) Services in IBM's case generally refers to technical engagements so from this I'd say that IBM is a tech company because over 90% of IBM's revenue comes from tech related categories.

What about Oracle? In 2006, Oracle has reported that all of its revenue has come from software and services. This includes software licenses, license updates, and product support. (See Oracle's Sept. 2006 press release for the details.) Again in Oracle's case it seems clear to me from the sources of revenue that Oracle is a tech company.

To round out this review let's take a look at Microsoft. In the first three quarters of 2006, Microsoft has reported that the bulk of its revenue came from three categories: business division, client, and server and tools. (See the Microsoft press release from Oct. 26 for the details.) Assuming that business division activities are activities focused on delivering technology solutions to businesses (as I'd expect but the definition of which I didn't see in the report) Microsoft has reported that 85% of its revenue came from software. Microsoft also looks to be a tech company.

Now let's take this approach with Google. Through the first three quarters of 2006 Google has reported that 99% of its revenue came from advertising. In fact, this is the exact same number that Google reported a year earlier in 2005. (See Google's third quarter 2006 financial press release for the details.) In Google's case the company is not deriving revenue from the software and services they create but from the advertising placed on the software and services. Is Google a tech company? According to this criteria it appears that Google is not a tech company but an advertising company. Stay with me a little longer.

Let's take a look at Google's strategy to try and shed some additional light on this thought. Google provides a lot of cool Web applications and tools to recreational and business users, some of which I mentioned above, and to Webmasters, such as analytics, hosted services (which includes a portal, e-mail, talk, calendar and personal Web space), and Webmaster central. And all of these great tools are free. Why? Because Google needs as many people online as possible to increase the audience for their advertising business. All of Google's applications and services are really just different types of billboards that allow Google ads to be displayed to different types of captive audiences. This really isn't that strange of a notion as there are other examples of technical leaders in various industries including banking, automotive and energy all of whom are not considered tech companies. In fact Google recently announced that it has formed partnerships with 50 major newspapers to sell ads for the publications. (See the Globe and Mail article "Is Google 'Evil'?" for more.) So the Google of the future does not look like it will be strictly Web based.

To summarize, Google is a very innovative company, a technical leader, and a Web based business but all of this exists to support Google as an advertising company. Does any of this affect your day-to-day interaction with Google? Not likely. But I think it is interesting to consider that all those great services that we enjoy are coming from an advertising company.

I've Been Blogged! ...and It Feels Gooood

In a post entitled "Bring Lawrence Back", Wassim Melhem recently blogged about my involvement with EclipseCon 2006 and referred to me as an "Eclipsezilla ninja". While this wasn't the first time I've been mentioned in a blog or even the first time I've been referred to as a ninja (Chris Aniszczyk once referred to me as the "WTP ninja" - unfortunately I can no longer find this post) as far as I know it is the first time that I've been the primary subject of a blog post.

As I read the blog entry about yours truly I had a rush of excited egotistic feelings over finally being blogged about by no less than the great and powerful Eclipse PDE lead. But then this post got me thinking about the value of acknowledging the contributions of others in blogs.

As I see it, there are two key benefits of acknowledging someone else's work in your blog. First, I think public acknowledgment of a good job is a good thing. It can go a long way in terms of showcasing an example of the type of effort that makes a difference to our industry (and society in general) that you'd like to see from others. In my case, Wassim highlighted the way in which I responded to submissions in the hope that my example would encourage others to respond to submissions for EclipseCon 2007. Second, your blog is one of your personal outlets to the world. Acknowledging someone in your blog is a very public way of saying thanks and giving them a pat on the back, something I think most people do appreciate. I did.

Maintaining Net Neutrality Makes Good Business Sense

Many of the north american telcos have recently announced (google "Canadian telcos push for Web control" for the Globe and Mail article that has the details) that they're exploring avenues that will allow them to discriminate with respect to the content delivered through their internet pipes. This discrimination today focuses on the delivery speed for traffic for specific sites (and selling quicker access to sites that are willing to pay for it) but it's not a stretch to see this extending into full censorship by blocking content from any site that doesn't want to pay for the telco's bandwidth. (Sounds like a Sopranos episode where the pizza parlor wouldn't pay for protection from Tony.) These announcements have naturally generated a lot of kickback from the technical community. The topic of debate is net neutrality. Many of the arguments that I've read focus on the idealistic notion that the internet should be open and available to all (both in terms of availability for consumers and as a level playing field for businesses). While I think this is an interesting discussion I'd like to take a look at this issue with respect to the business case for providing internet access.

Let's start with the question, what makes the internet valuable to consumers? Due to the evolving nature of the internet the answer to this question is ever changing. Today I'd say that consumers want access to internet in order to obtain information from a variety of sources, participate in e-commerce by shopping online and, the most recent desire, participate in interactive multimedia including posting and viewing audio and video through such mechanisms as podcasts and youtube. In our ever more on demand society, waiting to participate is not desirable and slow internet connections are unacceptable. In order to participate in all of these activities consumers want and pay telcos for high speed access to the internet.

So what does this discrimination of sites based on the amount they pay to a telco mean to the internet as a product that is sold to consumers? It means some information will no longer be available as quickly. It means shopping from certain sites will be a slow and painful process that may no longer be worth taking part in. (At some point it just becomes easier to go back to the mall.) It means streaming audio and video may have to come from specific sources if they are to be delivered in a timely manner. This will likely exclude personal podcasts and startup sites like the youtube of one year ago from the market. Combine all of these new restrictions together and you have less choice, less flexibility and less new content in terms of new sites for consumers. All of this translates into an inferior product (remember, internet access is the product) from the consumer perspective as the limitations imposed reduce the ability of consumers to interact online. What this means at the end of the day is a lot of unhappy customers.

I currently pay ~$50 CAD for high speed internet access. (Technically, I pay for Rogers Express service.) The price has gone up a few dollars in the last year, which did bother me, but at the end of the day I'm still pretty satisfied with the service I'm receiving. An argument I recently heard from Eugene Roman (Group President, Systems and Technology Bell Canada) is that bandwidth isn't free and telcos such as Bell cannot continue to cover the cost of their consumer's bandwidth as they have been doing. Of course the one way that he stated that telcos such as Bell can offload this cost is to provide better access for sites that pay a premium, and this is something that, as the article I listed above stated, Bell is investigating. Essentially, it seems to me that Bell wants to offload the cost of bandwidth to content providers, many of whom will not be able to afford the required fees.

I have three suggested better ways to manage the cost of high volume consumers than charging content providers a fee for providing timely access to their sites. To wrap up, here are my three suggestions:

1. Apply a bandwidth cap to internet accounts and charge more for those consumers that consume extremely large amounts of data. While some consumers won't like this suggestion I think it's clear that charging by volume is an accepted business practice (just look at cell phone plans). Rogers currently has bandwidth caps on all of their internet accounts. I'm currently capped at 60 gigs per month and, although I don't know my actual usage, I haven't noticed the cap or been charged anything extra to this point.
2. Charge more monthly. I asked a few friends informally if given the choice between restricted access for certain sites (I didn't say which sites) or a higher monthly fee for internet access which option they would choose and the unanimous result was the higher monthly fee.
3. Merge option 2 with the restricted access the telcos have suggested. Provide a basic internet plan that has restricted access to certain sites. This would serve as an introductory plan similar to the many free, ad supported dial-up plans that existed a few years back. Provide a second more expensive plan for consumers that do not want any limitations imposed on the content they browse online.