All in Business Models

Overlapping and Evolving Online Communities are becoming the Rule, Not the Exception

I received an email last night from a reader of this blog asking me to comment on cost estimates he had received for the development of a new social networking service. He wants to offer targeted services to a specific but large population segment. His thinking corresponds with a lot of interest people have these days for applying social networking techniques in a profitable or meaningful way to different population groups — young people, old people, professionals, managers, sports enthusiasts, podcasters, jobseekers, lonely hearts — you name it. If there isn’t already a MySpace/YouTube/Linkedin clone targeting any group that can write a check or reach a keyboard, there soon will be.
Professor Andrew McAfee has an excellent series of posts related to the application of “return on investment” (ROI) calculations to enterprise IT. His posts deserve a close reading. He gets some flack for seeming to argue against measurement, but as he explains in his second post, that’s not his point; he’s basically saying that too many business cases that rely on a haphazard or incomplete calculation of IT benefits are flawed, incorrect, incomplete, or self serving.
We hear a lot about the customer- and user-side benefits of Web 2.0 -- the collaboration, the rapid development and deployment, and the rapid formation of "communities" around common interests. As a change from this it's a pleasure to read some clear thinking about the business models that support Web 2.0, especially models associated with open source, software as a service, and software as an "appliance."