Home Mapping the Current Web Transition

Mapping the Current Web Transition

A year ago, I wrote a magnum opus three-part post that attempted to chronicle some of the underlying changes happening in the economy and how this would impact web technology ventures. “Useful, but too long” was a recurring comment. So, here is a one-year update, much shorter. And hopefully a bit clearer, seeing as we are further into this transition.

The Grossly Over-Simplified Web Transition Chart


Notes

Why 2.5? Because we are in transition. The old is still with us, and the new is emerging but has not yet arrived. This was also true when “Web 2.0” was coined: only later did orthodoxy emerge.

2.5 is named “Get real” because we all have to do that. The punch bowl was taken away.

3.0 is named “Main Street” because the web is maturing… for everybody.

Social Media: Closed social-network sites cannot survive in their current form, and yet they are so dominant today. So the transition to open and pervasive will be a big and messy fight… which will be great fun for journalists to cover!

Advertising: Advertisers will adopt a barbell approach: CPM for branding, and CPA for direct-revenue generation (as soon as publishers figure out how to make money selling CPA). CPC will still be dominated by Google but will become less dominant as CPA gains traction. Google will play in CPA and CPM but won’t dominate as it does in CPC. Publishers will sideline CPA because nobody will be able to compete with the CPC price set by Google. Ventures that bridge the gap between publishers wanting to sell CPM and advertisers wanting to buy CPA will do well.

Revenue: Primary revenue will come from subscriptions and transactions, with advertising as one driver of those revenue lines. Today, we are in transition and in recession, so any revenue is good.

Content: UGC reduced the cost of content but created too much junk. Curation (adding human editors to automated UGC content) will be aided by semantic technologies that aim to do what humans currently do well.

Start-Up Hero: Today, it’s “Nobody” because we are all in a hangover funk. In the near future, entrepreneurs really will hold the best cards; financiers will be secondary.

Funding: The “Big VC” model is broken but will carry on for ages (“Zombie VC”). Angels and small VCs are in the cat-and-bird seat today. But they need a revived public market or something other, which we’ll call “private + transparent.”

Prime Market: This is a century-long shift, like the one from Europe to America. Asia is not ready yet, America is in turmoil, and Europe is conservative, so this is another transitional phase.

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