Wake Up Jessi Hempel! Web 2.0 Isn't About a Revenue Model Just Yet

Dear Jessi Hempel of Fortune Magazine:

With all due respect to your achievements and ability to write thought provoking content for one of the largest and most respected business publications today, I feel that you've completely missed the point with your recent article, Web 2.0 is so over. Welcome to Web 3.0.

To me, your article demonstrates a clear lack of clear understanding as to the purpose and relevancy of Web 2.0. While I agree with your perspective on the lag of profitable revenue models related to social media companies such as MySpace and Facebook, here's how I would challenge your perspective:

Have You Shown Up to the Party, Jessi?
First and foremost, I always find it interesting to read articles on social media platforms produced by technology experts who have not yet engaged in the social media universe.

Please correct me if I'm mistaken, but a quick search for your name on search.twitter.com shows me that you have not yet created a Twitter profile. Not one single Tweet!?! How then may I ask is it that you feel compelled to offer your opinions on something you obviously have not taken the time to really understand?

Likewise, running a search on Facebook produces the same results. Again, you have no presence, at least none that is visible to the broader network. While it may be your preference to keep profile private, I would argue that doing such limits your understand of the full functionality and capabilities that the platform delivers.

To your defense, I did find your profile in my extended network on MySpace, which is connecting you to a whopping 76 other users. Really? That's all?

And what about Jessi on LinkedIn? I've found you there too, boasting 141 connections and with no relevant content on your professional track record, no recommendations regarding your work, no history - frankly, there's nothing there at all. This is not to say that it doesn't exist. I am certain that you are a sharp, able journalist who has achieved great success in your career. You've simply chosen to not show up to the social media cocktail party.

My point is this: Being a trained journalist, you should know better. How can you begin to offer your readers a perspective on something that you, by your own choice, have not invested the time to fully understand?

Web 2.0 is Not Necessarily About a Revenue Model
In the article, you site and abridged version of Tim O'Reilly's 2004 coining the term "Web 2.0". I would ask you then: What in his statement or definition makes mention of any focus on directly relating the web as a platform to a profitable revenue model?

This online social phenomenon is about a shift in the way we as humans connect and communicate with each other. It's the idea of using the web as a platform in an infinite number of ways to reach more audiences, create new opportunities and change the way we as professionals, consumers, and organizations interact. More traditional communication tools are now forced to take a back seat to the Web. I would even project that the more traditional mediums may someday fade into the history books to sit along side tools like the telegraph and Morse Code.

Further, Web 2.0 is still in it's infancy. There is not a right or wrong approach - there are only different ideas and trial and error at this stage of the game.

Because of Web 2.0, We Now Have More Access Than Ever Before
So why on earth do Web 2.0 companies need to go public? I will argue that a result of this new mindset of viewing the web as a platform, the reach and access it delivers significantly reduces the need for companies to grow via IPO. It's typical that a successful IPO also brings with it a certain loss of control over the strategic direction of a company. Process and operations can often grind to a halt while management spends valuable time seeking stock holder approval, rather than focusing on driving innovation and efficiency. Is this what has happened with YouTube? Maybe and maybe not?

I believe that the dawn of Web 2.0 has spawned a change in what determines a successful business model. Old stogy organizations that depended on hierarchy and huge overhead (some of which are now approaching Washington with open hands and begging for bail out dollars, might I add) are being replaced with organizations that operate lean, and focus on speed and agility in a dynamic market place. The old models simply cannot keep up.

In your article, you state: "MySpace's projected $600 million revenue in 2008 falls far short of parent News Corp.'s (NWS, Fortune 500) billion-dollar sales target for the site." That is absolutely true. But I challenge you to find a business that in one year, can produce $600 million dollars of annual revenue with a staff of roughly 300 employees.

Further, MySpace now boasts network volume of more than 185 Million users world wide, with an average growth rate of 230 Million users daily. Would you disagree that when Tom Anderson and Chris Dewolfe do figure out a more profitable revenue model (and I believe they will), will they not have a clear marketing advantage as a result of their network's sheer volume?

And further, Web 2.0 is much more vast than the two social platforms you so eloquently mention in your article. What about the influx of personal and company blogs in the past 5 years? What affect on the market place do you believe that has had? What about Wikipedia and it's growing relevance as a research tool populated by the people, for the people? What about social bookmarking sites like Digg and Technorati? Do you use photo sharing sites like Flickr and Shutterfly? How many Niche Networks do you hold profiles on? And what are your perspectives on Open Source application development?

I'm curious, and believe that your readers have a right to know your thoughts on the broader perspective of Web 2.0...

What do You Define as Web 3.0?
And finally, not once in your article do you ever take a stab at really offering an opinion as to what the concept of Web 3.0 really is (which is also being called the Semantic Web) .

The truth is that it is all merely speculation at this point. No one really knows what this will entail and how Web 3.0 will shake out. There's no time line and there is certainly no set date as to when and if this the transition from 2.0 to 3.0 will actually happen. All we know to date is that the programming languages and technology that will make this concept a reality "have yet to be implemented or realized."

Again Jessi, I mean you absolutely no disrespect in posting this on Chasing Change, and I welcome you to comment in your defense so that my readers will have an unbiased perspective.

We all welcome your articles and I've found many positive comments on Twitter related to your writing. But in the future, I would caution you to fully investigate what you plan to write about and make sure you cover all the bases.

Respectfully,

Nate Riggs
Social Media Strategist