Bringing The Next Net To The Mass Market

A group of Internet luminaries - Bradley Horowitz (Yahoo!), Steve Berkowitz (Microsoft) and Kevin Rose (Digg, pictured at left) - discussed how to bring innovative new Internet offerings to the mass market. Moderated by Business 2.0 veterans Om Malik and Erick Schonfeld, the panel discussed the most innovative Internet trends, why they're important, and how companies can leverage these new opportunities.

To lead off the discussion, Erick Schonfeld explained the Web 2.0 phenomenon in layman's terms. It is no longer a "static" Web. Instead, Web 2.0 is a "dynamic" Web. Within Web 2.0, there are certain key themes. It's all about people and the power of the users (e.g. Digg, Yahoo! Answers); about the evolution of the Webtop (= Desktop + Web); and the emergence of the Web as an important publishing medium (e.g. YouTube.com).

How do you bring the Next Net to the masses and how do you find the new opportunities?

Horowitz: Yahoo! touches half a billion people a month. The key is lowering the barrier to participation. In a world where everyone thinks they're Steven Spielberg, how do you create valuable metrics? At Flickr (now a Yahoo! property), one attempt has been the concept of "interestingness."

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Berkowitz: "The audience is the key." If want to sell advertising, you need to aggregate the audience. As a result, Microsoft is attempting to turn everything into platforms that can be syndicated. It's about building a monetization platform and building an analytics platform. The goal is to build out a set of platforms. "IT is about community + content."

Kevin Rose: There are only 17 people at Digg, all trying to do one thing really great. We're taking a traditional news model and taking power out of the editor's hands and giving it to the community.

Om Malik: The proliferation of broadband is critical. When bandwidth goes up, things change. One example is YouTube.com. Think of the cell phone as a computer in a pocket. 1.5 billion people have cell phones in world, but all of these do not have computers.

How do you spread out to the masses?

Kevin Rose: We're trying to expand Digg from technology to other news areas. We actually receive more submissions now on non-tech stories rather than tech stories. It is part of a shift from a tech-only focus to things like sports & politics -- two topics where "people get very fired up".

How are leading-edge services bleeding into the mainstream?

Horowitz: All of the growth at Yahoo is organic. This is the right way. Yahoo is #1 or #2 in 17 different Internet categories. Every site will benefit from community. As a thought experiment, what would "social weather" look like? Maybe I'm in New York for this conference, and my friend is in California. When we're talking about weather, there's a social aspect to that.

Berkowitz: The Web has moved from technology to "technology enabling an experience." We must think of Web 2.0 from a consumer perspective. It's going to be about the desktop AND the Web, not EITHER/OR. We currently have 30 million Windows Live home pages.

Om Malik: There are now two generations that have grown up with the Internet. In 5 years, two generations will have experienced broadband.

Horowitz: My Yahoo has been extraordinarily successful. A user can put GigaOm right next to the Wall Street Journal. Yahoo recently purchased an online karaoke company (Bix). Yahoo must empower people with the power to make choices, such as by using a "Wisdom of crowds" technology. Maybe if you see a huge upsurge in Flickr uploads, you can see that it resulted from a U2 concert in a certain city.

As consumers become users, companies become "transparent." How do you let go and make money?

Berkowitz: "We are the retail space of the mall." Our brand (Microsoft) is the best location for people to go to. Trust & reliability are key factors.

Horowitz: The issue of transparency is key. In the Flickr community, when a new user from Philly enters the site, the user is told that three other Philly users are online. This is powerful. We have to take Web 2.0 to the extreme; Stewart Butterfield says reciprocity important, even if it might hurt your site in the short-term.

As an example, consider the example of Flickr, which faced potential criticism over whether users should be allowed to "slurp" over Flickr photos to another rival site. The final solution was based on reciprocity: you can move the Flickr photos to another site, but only if that other site has a similar policy.

Who owns the data? If I can take my data anywhere, how do I make money as a company in the tech sector?

Horowitz: There is no need to create a walled garden to keep users in.

What is your competitive advantage then? What is the barrier to entry?

Kevin Rose: Right now, there are 300-400 clones of Digg. In order to deal with this reality, we are working on Digg Labs. Some features will fail, others won't. If your site has new features, you can keep your users. (here, Rose demonstrates a cool Digg Swarm feature to the audience, which sees stories aggregating to each other like viruses in real-time).

(question from the audience) Community is a critical success factor. What was conscious about building the Digg site. If you build it, will they come? Or do you need to market it? How do you reach a critical mass?

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Kevin Rose: We've never spent a dollar on marketing. It grew organically. One Webmaster noticed that, "Hey, I got a big spike in traffic from Digg." That led others to the site, and it spread informally like that. Users become evangelists with skin in the game. What can you do to encourage that?