WEB 2.0 promise or threat?

Along with the chance to get closer to the customer, the user-generated internet carries real risks: from hackers, complainers and even disaffected staff. Mark Vernon reports.

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Last Updated: 09 Oct 2013

You have heard of Wikipedia, the online encyclopedia written by its users. It aims to bring the sum total of human knowledge to everyone on the planet in their native language. Don't sneer: Bill Gates wanted to put a PC into every home and people don't laugh at that idea any more.

Many know about MySpace, Facebook, Bebo, Second Life, YouTube and others - the social-networking, content-sharing websites. Facebook is the current favourite, growing faster than Jack's beanstalk. And despite recent hiccups - six firms, including Virgin, Halifax and the AA, withdrew their ads after they appeared on a page connected with the BNP - it is generating more gold than the ogre Jack found at the top could ever have dreamed of.

But what of the blogger in Hawaii who posted a picture of a cat with the caption 'I can has cheezburger'? (sic). Within six months - six months! - he was receiving half a million hits a day and was able to charge so much for ads that he quit his job.

Or the websites that, by posting news and video from readers, have turned the commercial bedrock of traditional publishing and broadcasting - namely, advertising - into sand? Or the online chatrooms and notice boards on which customers express their opinion of goods and services? In a few short lines, they can turn the millions spent on marketing into dust and ashes. Now executives truly understand the power of word-of-mouth advertising.

This is all part of the Web 2.0 phenomenon. Web 1.0 was the internet dream that turned into a nightmare when the dot.com bubble burst. Web 2.0 is the dream recurring, only this time it has the advantage of cheap, high-speed internet access and users who have seized control of content. Few of them know their 'html' from their 'php', just two of the languages used to programme websites today. And yet millions are able to publish words, pictures and videos every minute of the day.

The cybergeeks are setting the pace again. And this time they mean business. Nevertheless, serious questions hang over Web 2.0. What of the security threats? What about its quality? What of its usefulness to business? And most important of all, can it be used to make money?

There can be no doubt that Web 2.0 has entered the workplace: 71% of office workers aged 18 to 29 access such websites at least 'a few times a week', according to research from YouGov and Clearswift. Nearly two out of five such employees access social networking sites several times a day.

There's every indication that many companies want to use Web 2.0 for their own purposes. Research from Coleman Parkes and Citrix suggests that despite a lack of corporate understanding of the concept, there's a growing commitment to Web 2.0. Nearly 40% of those who are aware of the technology but have yet to run it expect to implement it within the next two years. In addition, 52% of companies predict that half of all applications will be Web 2.0-based within five years.

'As much as anything, it's a generation thing,' says Klaus Oestermann, group vice-president at Citrix. 'Companies must adapt to suit a new breed of internal and external customer that has grown up with Web 2.0.'

One of the most common applications is Web 2.0 technology that allows customers to interact more directly with businesses. Blogs and bulletin boards cost little to set up, and even if the link between the traffic on such sites and any new revenue generated is as yet unclear, the content provides valuable insights.

Such revelations can prove uncomfortable, though. When Dell launched its blog in July 2006, nearly half the comments left on it were negative. On the other hand, that made it easier for the firm to address issues head-on. 'There are no shortcuts,' explains Lionel Menchaca, digital media manager at Dell. 'Building a successful blog requires long hours, a heck of a lot of reading and writing, and a thick skin.' One lesson is that unpleasant comments will not simply disappear. 'If you aren't prepared to discuss negative issues and actually fix what's causing the negative conversations, be ready to fail publicly,' he adds. Today, about 23% of the comments left on Dell's blog are negative.

London Metropolitan University is another organisation that was bitten hard by Web 2.0. Look at its entry on Wikipedia - as many prospective students will do. You'll see that space allotted to its inspiring mission statement and venerable history is dwarfed by a blow-by-blow account of recent industrial disputes, complete with headlines such as 'Censorship?' and details of the vice-chancellor's rising salary. The battle over who controls that content, the management or the unions, was won by the latter because Wikipedia judged they could source their version of events more thoroughly.

This raises the issue of quality. How do you know that the information on a website is accurate, trustworthy and up to date? Dr David Holmes of Manchester Metropolitan University has studied the traffic on MySpace. He estimates that up to 40% of the information displayed in profiles - the personal information that people post about themselves - is fabricated. And, of course, Rupert Murdoch, whose News Corporation bought MySpace in 2005 for several hundred million dollars, does not know which 40%.

The uncertainty of such content must also be set alongside the fact that it is often enormously influential, just because it seems to come straight from the customer's mouth. 'Businesses are still coming to grips with the impact of user-generated content and struggling with how it might be used to create a competitive edge,' says Richard Anson, CEO of product-review site Reevoo. 'This apprehension is understandable, especially when the opinion of an "every day" consumer can have as much influence over our decisions to buy as a multi-million pound advertising campaign.'

Then there is the question of security. The consensus is that the threat is serious. Says Graham Cluley, senior technology consultant at Sophos: 'The biggest security threat about Web 2.0 is the lack of control over what is being posted on sites, which has already led to a number of security breaches. Thousands of new web pages on legitimate websites are being hacked every day, with malicious software planted on them designed to steal information from innocent users and businesses.'

Employees routinely act irresponsibly on these websites, adds Cluley, posting personal information about themselves and embarrassing photographs and confidential data about their company onto pages that are accessible to the entire world.

A particularly disturbing trend was spotted by Mark Sunner, chief security analyst at MessageLabs. In June, he noticed that executives, notably chief investment officers, were receiving e-mails ostensibly from relatives. These 'friendly' messages contained word documents embedded with trojans that left the corporate network vulnerable to attack. 'With social networking tools now highly populated with valuable content, personal information and sought-after details, it is easier than ever for the bad guys to harvest the personal details needed to personalise their attacks,' he explains.

So it seems that Web 2.0 has companies in something of a bind. On the one hand, they can no more ignore it than they can tell their customers to go away. But on the other, it ramps up the perils of the online age, as well as the promise. 'Wikinomics' may change everything, but not always for the good.

WHY IT'S A GOOD THING...

Web 2.0 optimist: TVF Media

TVF Media is launching a new service with Joost, the online video service backed by Skype. TVF is the largest independent owner of high-quality TV documentaries in the UK. The new service, called TVF dox, will offer this content on demand, in real time over the Joost network. 'Services like these mark the beginning of the end of broadcasting as we know it,' says Hilary Lawson, TVF's chief executive and creative director.

The experience will be the same as watching television, except that viewers can choose what and when. TVF is using embedded advertising rather than pay-per-view to generate revenue from the service. 'It's the technology and the corresponding quality that enables us to do this now,' explains Lawson. 'It has really only come about in the last year.'

The time is right in cultural terms too, he believes, with terrestrial TV dumbing down to sustain audience figures. This creates a market for quality programming that people are no longer finding on traditional channels. On the internet, 'long tail' economics makes providing such content possible: large numbers of specialist programmes can be kept available at low cost, generating enough viewers over time.

For Lawson, Web 2.0 suggests other new business models: TVF also helps companies to attract customers using the social networking-type approach. 'The key is to attract individuals who are not only users of your site but will be revenue-generating customers,' he explains.

But direct contact with customers will remain invaluable. 'The trick is to have Web 2.0 products that can share information and offer users the option of a face-to-face meeting.'

WHY IT'S A BAD THING...

Web 2.0 sceptic: BGL Group

The BGL Group is a major UK insurance intermediary, overseeing brands like Bennetts bike insurance, Budget car insurance, M&S Money and Post Office insurance. However, Tom Cooper, director of e-commerce for the group, is something of a Web 2.0 sceptic.

'My view of Web 2.0 is that it's not a specific event or advancement, but has purely been the evolution of consumers taking charge online and changing their own access to content from one of push to pull.' He is not convinced that the commercial exploitation of this evolution will be possible for many organisations.

So rather than engage with Web 2.0 directly, BGL wants to improve its online functionality. For example, all insurance documents could be delivered online, rather than by mail. Or customers could log into their own account and make alterations online. Integrating channels (eg, mobile phones) and a better understanding of customer experience online will follow.

Cooper believes the key to Web 2.0 is to accept that it's not commercial in origin - and that's why social networking sites are so successful. People engage with them free of the feeling that someone is trying to sell them something. Companies intrude at their peril.

'It is the pureness of this phenomenon that has resulted in the world struggling to make them commercially advantageous,' he says. 'This challenge is proving to be beyond the world e-commerce community.

'The security and negative aspect of postings is a real issue and may make striving for commercial gain through blogs etc impossible in the light of the ease with which your reputation can be harmed.'

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