Web 2.0, the new set of Web, or more accurately, hosted services was featured by O'Reilly Media in 2003 as having lightweight business model. After a few years of development, the concept is still quite valid, but in more detail examination, Web 2.0 has been dominant an economy of sharing, attention and creativeness.
I did a quick summary of the major types of Web 2.0 services, benefits and business models and came up with a summary as in the picture below:
a more detailed version with examples can be downloaded here:
Download web_2.0 Business Models - a quick survey.pdf
1. Virtual world, virtual goods
SecondLife is the most dominant 3-D virtual world community, which has its own economy and currency. The main values that residents find in Secondlife are mainly emotional. They can have their avatars looked the way they like, virtually present where and interact with whom they want. They can build, share and even sell virtual products or services for an amount in Linden $ that they can cash out partially if they want. With the popularity of the service, many organizations and even countries bought land and establish and reinforce their presence and brand on Secondlife. The main revenue stream for Secondlife comes from selling its lands, which partially funded by advertising funds of the organizations.
Susan Wu has recently a very interesting post, which included description of the value that HotorNot provided to its customers:
"...virtual flower service has 3 components: there’s the object itself represented by a graphical flower icon, there’s the gesture of someone sending the flower to their online crush, and finally, there’s the trophy effect of everyone else being able to see that you got a flower. People on HotorNot are paying $10 to send the object of their affection a virtual flower - which is a staggering 3-4x what you might pay for a real flower! Of the 3 components, the two that James says are most important to his users are the trophy effect and the meaning of the gesture itself."
HotorNot's business model also includes advertising.
2. Online tools (office, video/picture editing, project management, etc.)
All of these tools are replacement of licensed desk software applications (in case of Google Docs and Spreadsheets, Basecamp) or traditional communication services (in case of Vyew or Skype), while added quite useful collaboration functions. The business models behind are often fee for premium services or funding from complement services. The latter also includes exit option when getting acquired by companies providing related services.
3. Market or brokerage platforms
New innovative platforms like Prosper.com or Realmap.com.au provide a marketplace for people with demand quickly and easily to meet with the supply, and charge a transaction service fee. Prosper is a broker for lenders and borrowers. Lenders based on borrower's credit reports and the reason for the loan bid for a portion of the loan. As a lender can split his or her money among many loans, they can gain a better profit with lower risk.
Realmap is on the other hand a real-estate brokerage mashup service, which provides easy search for and geographic/3D-images of the properties. The service charges real-estate agents a service fee based on the number of leads generated.
4. Social media sites
Members, in most cases are also content generators, can find here easy ways to publish, share and subscribe to the contents they like on sites like Flikr, Youtube, Veoh, etc. Some sites, for example KU06, also have revenue sharing model with content providers. These site's business model is mainly from advertising, some may charge premium customer a small fee but the latter is quite rare.
5. Social networking sites
Popular sites like Facebook or Myspace generate revenue from advertising and also from service fee for services provided on the platform. In addition, these sites also provide virtual gift and other joint-services with media and telephone companies. MySpace is offering together with Helio phone company, which brings revenue sharing to MySpace. Social media site Facebook also offered a person-to-person lending service for a processing fee.
TO BE CONTINUED
This is not at all a full list, and categorization is mainly created for the sake of easy analysis. If you have something to add to the categories, or comment regarding the categories presented in this Part, please use the Comment section below.
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