Much has been said of the growing phenomenon that is Twitter in recent months. The micro-blogging site, which allows users to follow 140-character messages known as ‘tweets’ posted via SMS to the Web, has attracted users in their millions - including numerous celebrities and a certain President - posting anything from breaking news and campaign updates, to the more mundane and the down-right banal.
Twitter’s worth has been pegged at $1.7bn by one industry commentator, using Russian Internet-investment group Digital Sky Technologies’ offer to invest $200 million in Facebook Inc. (at a $10 billion valuation for the company’s preferred stock) as the benchmark. Yet the jury remains firmly out as to the true value of Twitter and its peers, which have quickly built large subscriber bases but have yet to demonstrate significant revenues. Naturally, the marketing gurus believe that there is a rich vein of user information to be tapped via the digital communities forming within the Social Web, and that this information will, at some point, be converted into hard cash.
Similarly, the Mobile Web 2.0 arena is brimming with players building out capabilities such as social networking, user generated content and presence, and who are looking to monetise these services via the subscriber information that mobile network operators hold. Yet just as in the fixed domain, turning a profit has proved illusive for many, and their long-term sustainability called into question as the availability of investment funds has dwindled during the economic downturn.
This is symptomatic of the ‘2.0′ evolution the communications industry is undergoing. The MySpace of yesterday is the Facebook of today and the Twitter of tomorrow. Consumer 2.0 tastes shift rapidly and the power of the Web-based community is also its major weakness – i.e. in relying on the network effect, a community will live and die by its numbers (and of course, its technical capacity to support these numbers). For example, according to a study conducted by the Harvard Business Review, the top 10 percent of Twitter users account for more than 90 percent of all tweets, with a typical user contributing very rarely, and the median number of lifetime tweets per user being just one. This translates to more than half of Twitter users tweeting less than once every 74 days.
Certainly, with all the hype surrounding 2.0 players, it is now crucial that all members of the value chain are able to extract more value - in pure monetary terms - from what has been described as the ‘for free’ Web 2.0 generation. Network operators face increasing demand for bandwidth at higher speeds, while service providers face burgeoning storage costs associated with social networks and UGC. These are all factors that will conspire against the end user (who does of course, still pay for their broadband connection) and the 2.0 players that are perceived by some, to be hitching a ride on the back of the network operators.
The fact is that Mobile Web 2.0 will have to be monetised successfully - and soon. But exactly how it is monetised remains the most pressing issue as MNOs battle to keep the growing number of digital communities connected, and in the spirit of the open environment that Web 2.0 demands.
Tags: Consumer 2.0, Facebook, Mobile Web 2.0, social networking, Social Web, Twitter, Web 2.0