November 13th, 2006
Will Web 3.0 be in the green?
The Web 2.0 Summit last week in San Francisco may have been about "scraping money off the table as the money–VCs, IAC, Fox Interactive, Google, Yahoo, Microsoft and others–were auditioning startups in the hallways and in private rooms,” as fellow ZDNet blogger Dan Farber notes, but at the Ad:Tech conference in NYC, media companies and marketers were looking for ways to make money from today’s Web 2.0, as I note in “Social media disconnect: Where is the (big) money?”:
At the various tech, advertising and commerce conferences I have attended in NYC over the past weeks, dozens of media execs–buyers, sellers, planners and analysts–heralded a new consumer led social media marketing revolution..
At the same time, however, a sobering dose of real world pragmatism was injected at the conferences by corporate marketers and seasoned advisors that serve them.
Web 2.0 money has been concentrated in a few high profile M & A deals, but the only clear winners to date are the handful of amateur entrepreneurs who sold out at the right time. The deep-pocketed corporate buyers, however, are not reporting Web 2.0 gains to their shareholders as I underscore in “Web 2.0 hype: Popularity without profits,” asking “Is everyone a winner?:
The millions of individuals taking advantage of the content, application and hosting largesse of YouTube, MySpace and Yahoo win, as do the four young founders of YouTube and MySpace.
What about the shareholders of Google, News Corp. and Yahoo? Is there a payoff commensurate with the multi-billion dollar video sharing and social networking investment bets made to provide free-to-the-consumer online services?
To date, the “hardest” performance metrics YouTube, MySpace and Yahoo tout involve user "engagement," visitor traffic and page views.
YouTube, MySpace and Yahoo Social Media are popular, but will they be profitable?
Social media monetization models are unproven. Moreover, as the no-fee sites grow in popularity, infrastructure costs rise to support the delivery of free services to the video sharers and social networkers.
The blogosphere’s first takes on Web 3.0 continue the Web 2.0 tradition of focusing on “cool technology,” not business models.
In Web 3.0, as in Web 2.0, however, corporate marketers will undoubtedly remain focused on one thing: ROI. To date, Web 2.0 has fallen short in that bottom-line metric.
The lack of a proven ROI in online social media, coupled with inherent brand risks in online social networking, are deterring corporate marketing investments in MySpace, Facebook, YouTube, Google Video…
Enhanced Web 2.0 ROI may spur along Web 3.0
