Table of contents
9
Contents
11
Foreword
13
Preface
17
What Is Web 2.0?
20
Who Is This Book For
20
What You’ll Learn
22
Implementing Web 2.0
23
How to Contact Us
23
Safari™ Books Online
24
Acknowledgments
25
Users Create Value
26
Flickr and Collective User Value
30
Collective User Value and Positive Network Effects
30
Trusted Context for Interaction and Community
32
Reaching, Tagging, and Monetizing the Long Tail
33
Six Ways Flickr Created User Value Through Interaction
33
Open Up Digital Content to Global User Interaction
34
Create Better Search Through User-Generated Information
36
Discover and Explore Through Online Groups
36
Catalyze and Amplify Group Social Network Effects
37
DIY Self-Service Syndication
37
Encourage Others to Become Part of Your Digital Ecosystem
38
Why Sharing Can Be Profitable
42
Flickr’s Cost Drivers
45
Calculating Company Value
48
Looking Back: Netflix’s Different Challenges
48
The Costs of Growth
52
Escaping the Trap
56
Lessons Learned
56
Customer Acquisition Costs, Inventory, and Growth Rate
56
Cash Flow Curves and Time to Profitability
59
Company Financial Valuation
59
Entrepreneur/Founders’ Net Worth at Exit
60
Questions to Ask
60
Strategic Questions
61
Tactical Questions
63
Networks Multiply Effects
65
Web-Enabled Online Network Effects
67
N-Sided Markets
71
Google’s Combination of Network Effects
72
Demand-Side Network Effects and Critical Mass
74
Getting Advertisers to Pay for Keywords: GoTo
76
Google’s Entry
76
PageRanking optimization of organic search
77
AdWords: A self-service way of reaching the long tail of search query
79
AdRank to determine advertisement positioning
80
Compounding network effects
82
Blogging for dollars
83
The Ups and Downs of Positive Feedback
86
The AOL/Google Story
88
Lessons Learned
90
Questions to Ask
90
Strategic Questions
91
Tactical Questions
93
People Build Connections
95
Social Roles: Online and Offline
97
How Online Changes Social Networking
97
The Shift from Snailmail to Hotmail
101
Connectors, Mavens, and Salesmen at Broadband Speed
101
How Many Customers and How Quickly?
102
Rogers Adoption Curve
104
The Bass Diffusion Curve
107
LinkedIn: The Rolodex Moves Online
109
Rapid Growth
111
Trust and Degrees of Separation
112
Monetizing Social Networks
113
Facebook: Introduce Yourself Online
115
Facebook’s Initial Growth
117
Viral Growth at Facebook
119
Viral Applications
121
The Limits of Viral: Facebook Beacon
123
Lessons Learned
123
Climbing Social Networks
124
Value Generation in Social Networks
125
Acceleration
127
Questions to Ask
127
Strategic Questions
128
Tactical Questions
131
Companies Capitalize Competences
134
External and Internal Forces
134
Developing Dynamic Capabilities: Before the Web
136
From Online Syndication to Competence Syndication
138
Software as a Service (SaaS)
141
Finding Competence Across the World: IBM
141
Integrating Linux and Apache
142
Mentoring
143
Ecosystems and competence syndication
143
Giving Away the Store: Amazon
144
First steps: letting other sellers into the store
145
Next steps: sharing back-office competences
146
Helping others share competences
147
Encouraging Competence Mashups: Google
149
Lessons Learned
150
Questions to Ask
151
Strategic Questions
151
Tactical Questions
153
New Recombines with Old
153
Styles of Innovation
156
Competitive or Collaborative Innovation?
158
Styles of Collaborative Innovation
159
Democratized Innovation
160
Crowdsourcing Innovation
164
Open Source, Ecosystem, and Platform Innovation
165
Online Recombinant Innovation
166
Bridging, Not Disrupting
166
Integrating Ecosystems: Apple’s iPod
167
Platform Innovation Ecosystem #1: Production
169
Platform Innovation Ecosystem #2: Creative and Media
169
Platform Innovation Ecosystem #3: Accessories
170
Platform Innovation Ecosystem #4: User-Provided Metadata
171
Recombinant Innovation
172
Working with the Carriers: Jajah
173
The User Experience
174
Alliances Make It Work
175
More Recombinant Innovation: The iPhone
177
Lessons Learned
178
Questions to Ask
178
Strategic Questions
179
Tactical Questions
181
Businesses Incorporate Strategies
181
Five Steps to Web 2.0
181
Build on Collective User Value
183
Activate Network Effects
184
Work Through Social Networks
186
Dynamically Syndicate Competence
188
Recombine Innovations
188
Building Web 2.0 Business Plans
190
Market Analysis
191
Competitive Analysis
193
Products and Services
194
Time Line and Milestones
194
Management and Executive Team
195
Financials
196
Look Around While Moving Forward
199
End Notes
199
Chapter 1
205
Chapter 2
216
Chapter 3
225
Chapter 4
233
Chapter 5
238
Chapter 6
239
Bibliography
251
Harvard Business School Materials
261
Index