Web 2.0: what does it mean for businesses in an ever-changing online world?

As I hung on the edge of the CN Tower, taking in the breath-taking view of Toronto's concrete Jungle, I felt a rush of exhilaration that I couldn't wait to share. This moment perfectly captures the essence of Web 2.0, where sharing our experiences is not just encouraged but celebrated. I am sharing this adventurous moment; Web 2.0 empowers us to tell our stories and connect with others.

Web 2.0, launched in 2004, is a new version of the Web 1.0 first popularised in the 1990’s. It facilitates user-generated content and interaction with other web users. Basically, it focuses on user interaction, collaboration and large-scale participation. We can take the example of the websites YouTube, Facebook and X (formerly known as Twitter). In simple words, the data can be edited, shared copied and can encourage user debate. It encourages free sorting of information, which permits users to retrieve and classify the information collectively. Technological components like JavaScript and Widgets create dynamic content that is responsive to user input. Another component called Ajax helps to retrieve data from servers. Through this, information flows between site owners and site users by means of evaluation and online commenting. 

Conversely, the original Web 1.0 was typically composed of static pages, written by site owners and administrators and infrequently updated. In other words, Web 1.0 emphasised transaction and simple access to information. We can take examples of businesses who wanted to present or make their information available to anyone at any time. An example of this would be ‘Shopping cart applications’, like Amazon in its early stages, a website with a simple shopping cart system where users could browse books, add them to their cart and complete purchases.

Key features of Web 2.0

As Web 2.0 understands the network as a platform rather just a bunch of connections, this encourages the collective intelligence of users. This means that users actively generate and retrieve data that is central to their social interaction and communication which results in a massive increase in user participation. Such unique principles of ‘collaboration’ and ‘participation’ allows modern commercial organisations, like Business to Consumer (B2C) companies, to use Web 2.0 both internally and externally to improve collaboration. It also allows them to consume the advantages of lower transaction costs, increase revenues and positive network externality effect. 

How businesses can benefit

Web 2.0 allows companies to use modern features like blogging, social networking sites, wikis, content sharing sites, user tagging and feedback. Companies like IBM (International Business Machines Corporation), are using social networking sites internally to encourage participation and collaboration among employees. They create an internal social networking platform called IBM Connections which allows employees to blog, share ideas, participate in wikis and collaborate on projects. Employees use software like Slack, Microsoft Teams and internal blogs to communicate between teams across different locations. They participate in virtual meetings, webinars and online discussions using tools like Zoom to enhance communication and knowledge sharing. This approach has helped IBM to build a more connected and collaborative workplace. 

E-businesses like Amazon use social networking sites to reach out to external customers by harnessing their collective intelligence through a massive increase in participation and encouraging customer related content. An example of this would be asking customers for their feedback online, posting online activities, sales and lucky draws. Online businesses are also using software to track customers’ search histories and web movement. Websites like Wikipedia allow companies to gather product related information from the public, allowing everyone to contribute their knowledge relating to the product or service. Moreover, Web 2.0 can be use externally by searching for potential employees’ relevant work experience using LinkedIn. 

Sapphire Pakistan, an Omni channel textile retailor can be seen utilising Web 2.0 features to reach their customers directly by frequently updating its catalogue model and online payment systems. Online selling not only helps them to sell online, but it also helps them to increase customer sales and movement at their traditional store outlets. Clothing companies like these can use Web 2.0’s platforms, such as Facebook, to keep in touch with their existing customers by updating them online regarding the latest corporate events and clothing designs. Facebook pages can help to communicate the additional information related to clothes, such as stock availability and colour variations, which can help to track the interest of the customers by collecting their ratings and informal feedback provided via Facebook. 

Web 2.0 can serve as a platform for business to consumer (B2C) interactions by acting as middleman that provides customers with useful, curated information about products or services. Live streaming of attractive commercials starring famous brand ambassadors, like film actors and social media personalities enhance the clarity and attractiveness of product information. This improves the symmetry of information between business and consumers, making details more understandable, clear and transparent. This also reduces the knowledge needed by the customers as they face less uncertainty in their decision making, overall reducing search costs as customers can access information more easily. Moreover, publishing images and discussion forums can generate interest and lower the evaluation time required by customers. The ‘like’ feature on Facebook will help Sapphire to reach new potential customers via the personal network of existing customers. Such an analytical tool can help the company to track their efforts and how much traffic they are getting, thus decreasing search cost. 

Other tools like tagging, rating and reviewing reduces the asymmetry of information between customers and online businesses. This means that customers’ contributions can provide the externality effect of aggregating unbiased information, again reducing contracting cost. This further can improve the externality of the online presence of the company, which would reduce evaluation and negotiation of terms and conditions for both buyers and companies. Moreover, customer feedback and participation may reduce their uncertainty over possible opportunistic behaviours which leads to a decrease in the time required for new customers to decide on a purchase. Facebook will also help to identify the prospective target market through collecting intelligence-based data generated by customers. Customers with similar profiles may be grouped into a demographic where customised mass advertising and Omni marketing campaigns can be carried out to reach out to different segments with different messages. Live messenger chat can be used to provide information related to payment, delivery and other after sales services.

Ethical concerns and challenges

Despite the benefits that Web 2.0 offers to commercial organisations, there are some ethical concerns. As Web 2.0 allows customer’s private information to be used without their knowledge, this can raise voice against the company’s ethical standards. Sensitive and confidential information about the company can be hacked and leaked online, which may damage a company’s public image. Data about customers’ insights can be deleted accidently and sometimes fake reviews, false information and irrelevant online material may increase the complexity of information processing. This may lead to an increase in transaction costs. Some people find it difficult to use Web 2.0 technological features. Frequent website crashes, slow catalogue processing time and poorly designed online payment systems may look critical, forcing customers to shop traditionally by visiting malls and shops, instead of buying online.  

Use of Web 2.0 by commercial organisations is not straight forward. E-businesses face cultural and social obstacles, whether the business operates purely online (pure plays), combines physical and online stores (click and mortars) or integrates multiple sales channel retailers (omni-channel retailers). Business leaders may not like the openness and free flow of information that this Web 2.0 technology offers. Creating an online platform and training employers to use these platforms can be costly and time consuming. However, in my opinion, adopting some of these features and using them one after another strategically for knowledge sharing, information gathering, and expertise will definitely open new business opportunities in the long run. However, the future holds even more potential with the Web 3.0, which aims to create an even more intelligent and personalised web experience, leveraging technologies like artificial intelligence, data analytic, blockchain and decentralised networks. 

Dear readers, with Web 3.0 promising more personalised and intelligent web experiences, how prepared do you think businesses and individuals are for this new wave of innovation?