When a photograph of a flaming laptop computer circulated on the Internet in the summer of 2006, Dell Computer quickly got a two-part lesson in the power of Web 2.0.
The lesson had little to do with the risks of an extended supply chain (the fire was the result of a faulty battery made by a third party and used in laptops and other devices manufactured by many companies) and everything to do with the risks — and opportunities — of a phenomenon that some tout as the Next Big Thing, others claim is already passé, and still others maintain doesn’t exist at all.
“Web 2.0″ is a term used to describe both a collection of relatively new Web technologies and, perhaps more important for CFOs, the changes in business processes that those technologies make possible. Collectively these technologies, which include blogs, podcasts, social networks, and other innovations (see “The ABC’s of 2.0″ at the end of this article), emphasize the Web’s ability to foster communication, between companies and customers, between employees, or both.
The debate regarding Web 2.0′s status as a legitimate paradigm shift, a brief fad, or a complete myth hinges on two things. First, there is no clear dividing line between Web 1.0 and any subsequent second generation. The Web was created to foster communication, and continuous enhancements have improved its ability to do so, making it virtually impossible to point to any time period or specific development that qualifies as an unambiguous leap forward. Second, at least some of the technologies that are often identified with Web 2.0 seem more gimmicky than substantive, appealing to younger Web users who will embrace anything new, but unlikely to have a lasting impact on how most people use the Web.
Despite those caveats, executives shouldn’t dismiss the Web 2.0 concept out of hand. There is a perceptible and rapid evolution in how employees and customers use the Internet, and in what they expect from it, and while the definition of Web 2.0 may be arbitrary and even contentious, it’s a useful shorthand for changes that are afoot.
We Hear You
Take Dell. Just days before the infamous photo of the inflamed laptop circulated on the Web, Dell had launched “one2one,” a customer-focused blog on which the company promised frank discussions about product-development efforts and other aspects of its business.
In its first few days, the blog offered no acknowledgement of a laptop-battery problem. That sparked the ire of the burgeoning ranks of consumer bloggers, who dismissed Dell’s foray into this particular Web 2.0 technology as predictable corporate pabulum.
Then Dell got religion. Yes, said one of its blogging employees, the battery issue did merit serious attention and, in fact, Dell was talking to the Consumer Products Safety Commission and an independent lab about how to assess and respond to the matter.
Normally, the “We’re aware of the problem and are working to correct it” response is regarded as the classic corporate dodge, but in this case Dell was praised for its forthright (if tardy) response.