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David Weinberger has a nice hotel lobby interview with Tim O’Reilly on the FastForward Blog (which is devoted to Enterprise 2.0 discussions).
Tim O’Reilly, creator of the Web 2.0 meme, says that organizations have been slow to understand how “network effects” can benefit their business if applied internally as well as externally. As customers add to what the company knows, should that added-value information be made accessible outside of the company? [The FASTForward Blog » Blog Archive » Interview with Tim O’Reilly]
It is a compact discussion of what Web 2.0 means, and what it might mean to the enterprise (it is about 15 minutes long).
I was particular interested in a couple of the points Tim O’Reilly made early on. First, that there is a tendency to think that Web 2.0 is about blogs, wikis and social software, but that this is to miss the point to some extent. And second, the distinguishing feature of what is happening in the network environment is the generation of network effects (NFX?), and in particular around data assets.
He goes on to talk about the emergence of large gravitational hubs on the network, which build value by collaboratively sourcing the creation of powerful data assets with their users. This is variously played out with Google, eBay, Amazon, MySpace, and so on. The collaboratively sourced value they create grows with the reinforcing property of network effects. The more people who participate, the more valuable they become, the more people who participate.
Opening up these platforms through web services creates more network effects, although he is careful to point out that the platform is controlled by Google, or by Amazon, and so on. And there is an interesting balance of interests between openness and control, evidenced in the recent actions by Google over its search API (which I discuss here).