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Thursday, March 15, 2007

Web 2.0 Enterprise –Trap ‘Long Tail’ Market

Thursday, March 15, 2007
Ever since O’Reilly has termed the 2nd generation web as web 2.0, it has got phenomenal publicity for fair reasons. The bourgeoning bookmarking sites and social media networks have been an impetus behind the popularity of web 2.0.

Convergence is a key factor enabling many enterprises to incorporate social tool to find large segment of niche customers, which verifies the ‘Long Tail’ theory of Chris Anderson, the chief editor of ‘The Wired’.


Until web 1.0, search engines played a vital role in helping enterprises find customers, who were looking for their products, but not the mass market. The much potentiality of Internet remained underutilized in so far as the matter of ‘niche audience acquisition’ was concerned. Web 2.0 has come up with a solution for all enterprises –smaller or bigger -to zero in on the large segment of customers.

The belief that there always exists a demand for a product in the mass market finds verification if one looks at the successful business models of the companies like Amazon, and eBay. These companies can hardly deny the fact that the sale of unpopular products is greater than the sale of popular products. Their whopping profit mainly emanating from the mass servicing of the unpopular products corroborates the practical implications of Long Tail.

So how many us are prepared to put venture capital (VC) to build a successful model like Amazon and eBay? Perhaps, many small enterprises, or even bigger one can’t even think of competing with these giants on various reasons - the greatest being the risk factor. Well, if your risk gets insured, you’d like to put your legs ahead, right?

Here is the underlying merit of web 2.0, which provides an equal opportunity to all. The cliché ‘what is shown is sold’ is true especially in an era where you can sell the products through online social networks. And, the Smithian theory of ‘invisible hand’ ensures immediate promotion of the products in-depth of the large segmented
markets.

The ‘Swarm Effect’ created through users’ interaction automatically leads to the promotion of the products with no additional cost involved to drive traffic through search engines.

In order to exploit the mass market, there requires a migration from enterprise 1.0 to enterprise 2.0. Many online businesses are soon realizing the urgency of incorporating web 2.0 tools –user generated contents, blogs, wiki, social computing, etc. -in their business plans so as to reach out to the large masses.

The objective of enterprise 2.0 is crystal clear -serve the masses Free and they’ll serve you better in the long run.

It’s high time to take action towards the migration from web 1.0 to web 2.0 enterprises to tap the mass market for making successful online business models.

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