Web 2.0: Features, Not Business Models?

Lots of valuable features do not provide a foundation for fleshed-out business model, many Web 2.0 entrpreneurs seem to be finding.

The shortage of revenue among social networks, blogs and other “social media” sites that put user-generated content and communications at their core has persisted despite more than four years of experimentation aimed at turning such sites into money-makers, the Financial Times reports.

“There is going to be a shake-out here in the next year or two” as many Web 2.0 companies disappear, says Roger Lee, a partner at Battery Ventures. That's just part of the innovation process, as you know if you were part of the Web 1.0 boom of the late-1990s.

But features often are an important and long-lasting effect, even when completely new business models are not built. Email arguably hasn't created a stand-alone business model, for the most part, yet it has radically changed user behavior and expectations.

Social networking appears to be one of the lasting fruits of the current Web 2.0 wave, no matter what happens with most of the companies attempting to make a business out of it.

U.K. Rural PC Penetration Tops Urban

It appears that U.K. PC use in rural areas, use of Internet access and broadband access rates are higher in rural areas than in urban areas, U.K. regulator Ofcom reports.

Some will note that unbundling of access loops is at 100 percent in the U.K. market. What that effectively means is that every potential customer has access to broadband, eliminating uptake differentials limited by physical unavailability.

Get 'Em in the Gate, They'll Spend in the Park

Six Flags says spending by customers inside its theme parks increased 13 percent over prior quarters, in the fourth quarter of 2007, the first quarter of 2008 and the first two months of the second quarter.

With just about everybody now skittish about the impact of economic sluggishness on consumer spending, that's not only reassuring for Six Flags, but a metaphor for what service providers might consider as well.

"Getting people inside the park" in that case means creating and sustaining a relationship, with virtually any single service. Once that is done, there is an opportunity to sell other things. In Six Flags' case that is food, beverages and souvenirs.

For service providers, it is an array of other services, applications or usage upon which partner revenue streams can be created. An entirely new "targeted" advertising business might be created on the back of widespread "video on demand" or "content on demand" offerings, for example.

It isn't yet clear how current charging mechanisms might change, and there is lots of standardization work to be done so potential advertisers can buy what they want conveniently. Not to mention the "danger" that Google and other application providers get there first.

Still, the analogy, though imperfect, is instructive.

42 Mbps iPhone?

An unnamed Telstra executive tells Australia-based ChannelNews that the Telstra version of the Apple iPhone will run at download speeds as high as 42 Mbps.

"We know what is coming we have seen the new device and it will be available on our network as soon as it is launched in the USA," the executive is reported as promising. "By Christmas this phone will be capable of 42 Mbps which will make it faster than a lot of broadband offerings and the fastest iPhone on any network in the world."

Whether fully correct in all details or not is less important than the ultimate reality of the claim. Wireless providers indeed are readying networks that will run that fast, and faster in the future.

Mobile devices capable of communicating that fast might not be as disruptive as mobile voice threatens tethered voice in some markets.

The larger issue is that once mobile broadband connections run that fast, and ultimately faster, some percentage of single-household users might well find mobile broadband a suitable replacement for fixed connections.

My gut level expectation, though, would be that most mobile broadband connections will supplement rather than supplant fixed broadband. There simply are too many other interesting reasons to maintain a fixed broadband connection.

Mobile voice does not suffer from form factor issues that make it a convenient replacement for tethered voice, for example.

Mobile broadband might cannibalize fixed broadband in some cases, but logically as a substitute for PC connections.

An iPhone operating that fast will enable sessions that largely are supplemental to fixed broadband.

SureWest: Broadband Exceeds Telecom

Make no mistake: transforming a legacy "telco" into a "broadband" company is tough, expensive, often-slow work. But SureWest Communications, for the first time, now makes more money from broadband revenues than from traditional telecom segment revenues.

A couple of observations. SureWest lumps its out-of-region services in the "broadband" category, so the growth is not all in-region broadband access connections and video, though both are growing.

Still, the milestone is important. SureWest is in some ways a "classic" smaller, independent "telco." But it has invested heavily in fiber-to-home networks based on Ethernet standards and IPTV. It has no mobile assets and has "bet the farm" on broadband.

But the strategic implications are impotant. It has gone "out of region" in an important way. Most smaller entities, as well as tier one providers, now find that out-of-region growth is crucial.

Also, business customer revenues are important. Over time, as it faces heightened competition from cable companies in the consumer space, SureWest has found business customers a more important customer segment.

That will be true for most smaller providers that cannot rely on mobility or mobile broadband to fuel growth.

Will Millennials Use Email?

Email is not going away, isn’t dead, and won’t be dead for a long time, says Media Post's Loren McDonald. The statement might seem odd, except it occurs after a panel of college-age Internet users at the Email Insider Summit.

One of the difficulties, when trying to predict how enterprise communicatons might change as Millennials enter the workforce, is precisely the fact that most of them are not in the active, full-time workforce.

Just as a "lone eagle" professional does not need a full enterprise-grade, premises-based phone system, so a college student has no need for one either. So it is hard to extrapolate from one stage of life pursuits to another than requires collaboration with other people in an existing social ecosystem, with established rules for communicating.

Today, the commonplace and accurate observation is that instant messaging and text messaging are preferred over email. But pre-workforce users will change as their life circumstances change.

That doesn't mean "nothing important will change." At a minimum, Millennials will retain the IM and texting habit for purely "personal" communications, even if they get used to email for business-related communications.

Beyond that, the additional implications are hard to predict.

Viacom CEO: No Way to Tell What Will Work

”We come at Joost or other platforms from the point of view that we cannot predict, nor did we in that case or any other case, predict which ones are going to be hugely successful, moderately successful, which won’t work," Viacom CEO Philippe Dauman says, reported by according to paidContent.org co-founder Staci Kramer.

“This is an age of experimentation," Dauman says. "Some models that sound great don’t work that well."

A reasonable approximation of just about every new application, or major change in use of an existing application, don't you think?