Web 2.0 Business Models and Profitability Issues

Introduction

It is safe to say that many of us have heard and been wondering about how people manage to earn as much as thousands of dollars on the internet using social networking. Celebrities such as Radiohead (Taulli 2007) have managed to earn a lot of profit through their fan page on social-networking sites like Facebook or Twitter. These people have successfully taken advantage of Web 2.0 business models. First of all what is web 2.0?

Background

Basically, web 2.0 can be defined as a term associated with web applications that facilitate interconnection, information sharing and collaboration on the web. An example of a web 2.0 application is Facebook, Blogs and so forth. Web 2.0 is the second generation of the web (World Wide Web); it is a movement away from a static webpage to dynamic and shareable content and social networking. The first generation is called ‘web 1.0’ which was simply just text-and-picture. Internet users now are free to choose to connect or interact with each other in a social media dialogue in a virtual community. Examples of Web 2.0 are social-networking sites, blogs, wikis or video-sharing communities (O’Reilly 2005).

Topic

We are going to do an in-depth research on the ways that people use to make money with the use of web 2.0 business models and thereafter relate it to e-Commerce to acquire expert knowledge on the matter. To investigate, an examination and analysis of the already existing business models such as Facebook will be taken. Secondly we will take a look at the profitability issues faced by web 2.0 business owners. In addition, we will look at some revenue models that some of these web 2.0 business owners that can take but are currently not using. Throughout the whole process, e-Commerce principles will be applied to analyse the business models of Web 2.0.

Discussion Question

Last but not least, we would like to have your opinions on this topic. Particularly, how do those social-networking sites make money and profit by providing free access to users funding only by advertising? Any input from you on the matter is very well appreciated by us.

Reference:

O’Reilly, Tim, (2005), “What is Web 2.0?”, O’Reilly media, viewed on 15th September 2010,

http://oreilly.com/web2/archive/what-is-web-20.html

Taulli, Tom, (2007), “Radiohead Web 2.0 acid trip”, BloggingStocks, viewed on 15th September 2010

http://www.bloggingstocks.com/2007/10/03/radioheads-web-2-0-acid-trip/