Thursday, November 15, 2007

Web 2.0 looks a lot like Bricks 50.0

Ahhh, the nineties. Those heady days when the world as we knew it was about to change forever. The net would change everything, and business, especially big business, would change beyond recognition.

The key theme in those days was "dis-intermediation" - the idea was that the web would provide a way for the suppliers to speak directly to the consumers - cutting out the middleman.

Well, looking around today one can certainly see a few changes. Millions shop online today and Amazon and eBay have become household words.

But try to think of any more "pure" online retailers beyond these two and it gets a bit harder. It is not that they don't exist - it's just that they have not gained the popularity, scale, and therefore publicity that the big few got. (Yes, there are online sites of all brick-and-mortar businesses, but they just prove how hard it has been for "pure play" internet shops to go beyond a certain scale.)

Blogs were another thing that were meant to change the world. Anyone could publish anything, and it would be instantly available, searchable, and discoverable. Again, this has definitely happened and there is an explosion of blog content on the web, with multitude of ways to discover it. But think once again of the blogs that you frequent regularly -or to which you turn for authoritative views and news, and the list gets a lot shorter. The fact is that if you need to check your facts or look at breaking news, you would still very likely turn to Reuters, BBC, CNN, or a handful of well known blogs.

So what happened here ?

Hmm, the suppliers of information and goods are trying very hard to cut the middleman and get directly to the consumer, but the consumer still seems to prefer to go to a few well-known places for his shopping and news.

Rather then killing the middleman, the web threw up an opportunity for new players to position themselves as middlemen and a few managed to do this successfully. But over time these few have come to look a lot like their older, more traditional peers. They enjoy tremendous channel power, and small suppliers have no chance of reaching a large audience unless they go through them - just like you have to sell through Walmart if you truly want to cover the American market.

If you want to dabble with publishing, great, start a blog, but if you really want to reach a global audience, try posting an opinion on one of the regular news-sites. If you want to sell something to your circle of friends set-up an online shop, but if you really want to get the best price, eBay and a handful of others are really your only choice.

Why did this happen ?

Who can say ?! But here's a thought. While the designers and dreamers of the web were champions of choice (and rightly so) the average consumer simply does not have the time, interest, or bandwidth to research, sift through, and pick from so much choice. So he tends to gyrate towards the few well-established brands which provide him a reasonable trade-off between choice and hand-holding.

This leads to the usual situation where intermediaries that get beyond a certain size and credibility find it easier and easier to grow since people find them to be more and more of a "no-brainer" choice.

As web-commerce and information consumption continues to explode and consumers of goods and information continue to change their habits, the dream of a totally dis-intermediated world may yet get closer - but so far web 2.0 looks a lot like Bricks 50.0.

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