Web 2.0: Technology, Strategy, Community Q&A
Tuesday, December 8, 2009
Question 1: Describe the “long tail” theory that was popularized by Chris Anderson in a Wired magazine article in 2004. How does it apply to sales of iTunes songs, Amazon books, and Netflix videos? Name another business that uses the long tail as a means of generating revenue, and describe how it does so.
Cur1y J: The long tail is a phenomenon which businesses can gross more money by selling low volumes of difficult-to-find products than by selling bigger volumes of more popular items.
The majority of Netflix’s rentals are DVD’s which are not usually carried in a video store. Unlike Blockbuster, Netflix doesn’t have a store front, so they can afford to hold a large inventory of diversified DVDs. This allows people to rent less popular and obscure DVD’s. This is called the long tail. So, while Blockbuster sells high volumes of popular DVDs, Netflix can easily and beneficially manage their huge inventory by renting long tail DVDs.
Amazon has the ability to take advantage of the long tail because of being virtual and possessing a huge warehouse where they can carry more products than a typical store. Amazon uses the long tail by suggesting products relative to what the customer has purchased. So, if I were in the market for a NY Times Bestseller, such as “The Shack”, Amazon may suggest a more obscure, relevant, good-ratings book. Thus, it is attractive and I may purchase this obscure book as well as “The Shack.” In another example, any movie that may come out that is based on a book with lower sales volumes may increase that books sales volumes.
Google uses Adwords to take advantage of the long tail. Google has the ability to monetize long tail keywords. For example, while some site may be able to monetize popular keywords such as “Boston lawyers” or “Attorney’s in Boston”, Google is able to monetize less searched for terms such as “the best lawyers in Boston, MA” or “top 10 lawyers in Great Boston”. They accomplished this by developing the Adwords program and offering it to small businesses and individuals. People could bid on any keyword, and Google took notice of the amount of people bidding on these long tail keywords. In effect, this high amount of keywords allows Google to generate greater revenues.
Question 2: Describe two different tools or strategies for using Twitter data in a business context. Briefly describe the technology involved that makes this possible. Name two steps Twitter should take in order for Lists to catch on as a useful feature of Twitter. Describe how a company might make use of Twitter Lists to grow its business.
Cur1y J: Twitter was used for publicity extensively by President Obama and other 2008 U.S. Presidential Campaign candidates. Ralph Nader used Twitter to update his campaign’s ballot access teams in real-time with Twitter and Google Maps. Numerous people became aware of Twitter because of the 2008 election. Candidates could reach out to millions of people, of all different backgrounds, through the use of Twitter. Anyone interested in the campaign could follow candidates and track their happenings, as Twitter can be easily updated through SMS or even iPod Touch.
News stations use Twitter to cover various news and occurrences around the globe. For example, CBC can link their website or blog to Twitter so that when a new story is updated, it posts the update on Twitter in less than 140 characters. So now the people following CBC news don’t have to actually check website. Instead, they will see any updates or news once it is updated on CBC via Twitter, as well as any other information the user is attracted towards.
Twitter is similar to a web-based internet relay chat, or IRC client. The interface uses Ruby on Rails framework, which is an open source web application for the Ruby programming language. However, Twitter is now using an API (application programming interface), which allows other web services and applications to integrate and connect with Twitter. As used in class, hashtags (#) and @ symbols allow for easy searches and interaction.
A company could use Twitter Lists to grow its business if it has multiple faces of the business on Twitter. For example, Comcast has multiple customer service representatives on Twitter with countless amounts of employees tweeting. Even though Twitter Lists may not result in new consumers or clients, it’s still useful for reporters, investors, and employees alike. These firms could make lists of the top people within the industry as they will be useful tools for others. Also, for example, if you were a travel company, you could make a list of the most active Twitter users in each city where you are located. Thus, all of these active users and influencers will find each other and help to expand the word around your company, showing how much passion there is behind your company.
Twitter Lists seem to be, as of right now, for die-hard Twitter users, as they are clearly the early adopters of this feature. So, casual users must be reached through creating useful lists and sharing them in other channels like blogs, email, and Facebook. Lists also may decrease the amount of direct user following, as you don’t need to follow all of the user in the List, so Twitter may want to require this because discovery of great people to follow is part of the value Twitter possesses.
Question 3: Other than syndicating blog posts as RSS feeds, describe two ways that syndicating content can help an organization capitalize on its core competences. Cite specific examples to make your case. For content producers, what is the main advantage of syndicating content? For content consumers, what is the main advantage of subscribing to it?
Cur1y J: Really Simple Syndication feeds allow people to syndicate their content so it can be found by other related content publishers. RSS uses Extensible Markup Language (XML), which is designed to draw a line between content and form, so information can be syndicated and extracted without the use of complicated code like HTML. RSS feeds have led to the huge user-content uploading.
So, a business owner could easily setup a blog to post updates about business offerings. News websites have taken massive advantage of RSS feeds. By having an RSS feed on their blog, customers can now subscribe to the RSS feed. Now, they can connect to see updates and posts in the RSS reader. This allows for easy and recurring contact with customers that may not have came back to the website if they didn’t subscribe to the RSS feed. Also, people will come back to the website if they see any interesting posts that relate to them through the feed.
Affiliate programs are great for RSS feeds. You can create a feed for individual products by utilizing the ability to separate content from form. Other websites could now use this feed to show content on their website about your specific products. Flickr uses RSS feeds with XML tags so websites and blogs can easily post pictures on their respective sites.
Content Producers would post RSS feeds so other websites can pick up content and syndicate it in other locations on the website. Thus, more people visit the site as content is more viral. Content producers also use RSS feeds to appeal to readers and know when websites are updated. This is easier than individually checking websites to see if anything was updated.
RSS feeds are attractive to content consumers because you can easily look at your RSS reader and see every site that has been updated instead of going to each individual site and checking if they have anything new posted. It consolidates the website into one location. This saves huge amounts of time because it makes scanning for updates easier and relative to their interests.
Question 4: Cloud computing has become a buzzword for a new strategy for developing and deploying software applications. Identify any application that runs in the cloud, and describe one of its features that could not be implemented as easily in a non-cloud architecture. What are the two biggest advantages for small to medium size enterprises (SME’s) that make use of applications running in the cloud? What features of cloud computing support those advantages? What are the two biggest risks of applications running in the cloud?
Cur1y J: An application that runs in a cloud is any web application (Facebook, Twitter, YouTube). These sites use numerous application plug-ins through the browser that allows for maximum user participation and accommodation. One of the features that could not be implemented as easily in a non-cloud architecture is the need to install and run the application on a customer’s computer, which relieves the pain of software maintenance and constant support.
Two of the biggest advantages for small to medium size enterprises that make use of applications running in the cloud is that cloud computing is a sort of on-demand hosting service. This is vital for e-commerce sites, increasing efficiency and lowering expenses. Another is it offers a pay-as-you-go structure, as users are only charged the amount of traffic, bandwidth, and memory used. Thus, online businesses become more efficient by only using storage and space that is needed.
A risk of running applications in the cloud is cloud computing has risks related to personal identifiable information that can be altered. People can fake identities and exploit these identities. Also, the specific location of data is unknown. So, tracking any data becomes very difficult. Any issues become very difficult to fix as users share hosting space.
Amazon created a cloud computing infrastructure (EC2), as they realized that many of the struggles they experienced while growing were also experienced by other start-ups. So, they created a service that allows companies to use their selective expertise in cloud infrastructure for their businesses.
Question 5: Chapter 5 in Amy Shuen’s book describes different types of innovation that result when combinations of companies and users collaborate. Identify a Web 2.0 company that provided a new platform on which an innovation ecosystem formed, and describe two ways that their platform led to the company’s success by supporting new forms of innovation.
Cur1y J: Amazon provides many new platforms, which has been vital to their success. The first platform Amazon provided was an open marketplace for sellers, charging fees and a % of their sales in exchange for service. They realized the there was a lot of competition in this market, so instead of trying to compete, the invited competitors to join their platform and thus raising profits and sales. By opening their platform, Amazon was able to build a better brand image and take advantage of the long-tail, as sellers were typically targeted towards specific niches that Amazon didn’t already service.
Amazon Affiliates is another innovation Amazon has used to their advantage to market their products. Amazon's affiliate program immediately generated thousands of sales force individuals who were working on commission. So, these people weren’t costing Amazon any money beyond the commission these people earned. In addition, the program opened their products up for marketing to the long-tail. Multiple affiliates were involved in niche blogs and website with faithful readers. The program allowed Amazon to get their products and brand image in front of these users in a very specifically targeted and cost effective way. Also, please see the above question for another way that Amazon has buily a platform leading to their success via cloud computing.
Question 6: Single sign-on, or the ability to use a single username and password to access different Web sites, is becoming an increasingly popular trend, as users no longer need to create a separate login and password for each site they visit. OpenID is one of several single sign-on providers. Other than not needing multiple usernames and passwords, describe another advantage of this approach to the user, (b) the site using single sign on, and (c) the provider of single sign on. Give a specific example an OpenID that you have. Who is your identity provider? Draw a diagram or describe the exchange of information that takes place between the user, the web site, the OpenID, and the identity provider, when a user logs into a Web site using an Open ID.
Cur1y J: Benefits of using Single Sign-On include:
- Reduces user password fatigue from entering different combinations on various sites. (user)
- Reduces IT costs as a result of a lower number of IT help inquiries. (site using single sign-on)
- Security on all levels of entry and exit to the systems without inconvenience of re-contacting users (site & user)
- SSO can support conventional authentication, like Windows credentials (provider)
For example, I have a site which uses single sign-on and I use single sign-on. I use Facebook, Twitter, Yahoo!, & MySpace as a provider. They provide a service of registering OpenID URLs and providing authentication. Below is how the exchange of information takes place between the user, web site, OpenID, and the identity provider, when a user logs into a website using OpenID:
- End user want to asset his/her identity to a site (i.e. me)
- The end user chooses a URL or XRI as their OpenID identifier
- A service provider registers OpenID URLs or XRIs and provides OpenID authentication (i.e. Facebook)
- The relying party site verifies the end-user’s identifier
- The server-agent then verifies the end-user’s identifier. This could be the end-user’s own blog.
- The end-user uses a browser to access the identity provider and relying party.