The Internet's relatively short history can be divided into two popular phases—The roller coaster DotCom phase and the emerging Web 2.0 phase. We are bombarded by the buzz of Web 2.0, but what is it really and why does it matter to your business?

What is Web 2.0?

In 2004, Tim O'Reilly coined a new phase in Internet history as Web 2.0. Websites that are 2.0 have transitioned from solitary information silos to a platform of tools and services used to add, edit, create, discuss and host user-contributed content.

The online encyclopedia Wikipedia best exemplifies O'Reilly's description. Founded in 2001 by Jimmy Wales, Wikipedia allows millions of people to create and edit entries on millions of topics. This living online enterprise far exceeds the breadth of traditional encyclopedias and stays relevant via changes every second. Other popular examples of Web 2.0 websites include: YouTube, Flickr, MySpace, and digg. Loads of folks build the content for these sites.

What really propels Web 2.0 from an interesting "fad" into a time of great historical importance is that these sites-as-platforms allow anyone, anywhere to participate in worldwide conversations, produce and post their own videos, articles, books, book reviews, blogs and photos. The consumer has turned producer and their product is User Generated Content.

Why does it matter?

Most companies develop an online presence to create a more intimate relationship with their customers. Currently, most websites are nothing more than a one-way conversation—information from companies to customers. This type of online presence can be considered Web 1.0. Companies can now create a more intimate conversation with customers and also turn customers into evangelists for their products by employing Web 2.0 applications and mindsets. Allow customers to post their reviews of your products, customize your products for purchase, and create a personalized area to track of their site activities. These changes increase customer loyalty, create virtually free PR across the Internet, increase brand visibility, and sell more product.

How can I use it?

There's an uncomfortable paradox inherent in transforming your website into a more intimate place for customers. You have to loosen your control on brand and content. This seems counterintuitive for companies. Dion Hinchcliffe (Web 2.0 Blog) explains it best:

"…turning over non-essential control can result in enormous gains in economic efficiency as tens of thousands or even millions of customers creative output is harnessed in a mutually beneficial way. Organizations that fail to embrace the Web's natural communication-oriented strengths will fail when put in competition that those that do."

Many companies are embracing the Web 2.0 philosophy to great effect:

• Amazon Web Services - Amazon gives away code to developers in order for them to create new API's and encourages them to sell their API's on Amazon.
• Nike ID - Aren't satisfied with what's on the shelf? Nike lets customers create and purchase their own custom shoes.
• Disney Channel High School Musical Video Mixer - The tween TV movie hit, High School Musical, has spawned a CD, a DVD, and live concert tour, and books. Instead of safeguarding the integrity of the movie, Disney Channel allows fans to create their own videos using clips from the movie.
• Farm Aid - ISITE Design helped the national non profit create a user generated content site called Top of the Haystack, attracting millions of visits and hundreds of heartwarming stories and photos.

What's next? It's up to YOU.

Now that Time Magazine designated all internet users as Person of the Year, businesses will be scrambling to make their online presence more Web 2.0 friendly and harness the power of communities. What's the status of your site? ISITE Design can help you come up with a strategy for success. Contact us at 888-269-9103 for a free consultation.

ISITE wishes to thank Dion Hinchcliffe for his permission to reprint images and quotes. Please visit his blog, Web 2.0. It's required reading for the Web 2.0 era.