"Web 2.0" is a powerful buzzword, it keeps such good company as SOA, SaaS and Cloud Computer. Facebook and Twitter are all over the news. But there's a problem. User-generated content is proving to be not very monetizable. At all. The main reason: users overuse it and the content they generate is crap. This means that it's going to be a bandwidth hog no matter what and it means you'll have a hard time finding advertisers because no one wants to affix their brand name to random crap. So how does this become viable?
Well, we have some choices. They could move to a pay model, pay-per-tweet or a membership fee. The biggest obstacle to this paradigm is that the services only work if they have an extensive network, and charging people to use (or post) or making it part of a pay service shrinks the size of that potential network and makes the product ultimately less desireable. In econ-speak, the cost of joining a network increases faster than the price. This is further compounded by the inherent resentment of the web community towards pay services. In short, we're already paying for our connection, why should we have to pay to play on it? Exrapolate that and you get something that's completely messed up (and also completely true): some people get the fastest possible network speed so they can download software and music and movies more quickly. That's right, people are paying money (and not an insignificant amount) for a higher grade service that better enables them to steal. So to approach this culture and say "we want to charge you to use Twitter"... you're going to be met with a teensy bit of resistance, at first.
So, if that won't work, why not a value-add model? Attach the service to something that people are willing to pay for. Cell phones are an obvious choice, especially since Facebook and (particularly) Twitter are already big parts of cell phone culture these days. But how do you establish it? Licensing fees paid by cell providers (the we-charge-you-for-your-users'-use model)--I don't think the phone companies would go for it, there's no incentive. People are going to buy phones regardless. They could set up their own networks (i.e., do to Facebook what Facebook did to MySpace), but telecom companies tend to be insanely proprietary, and that mindset makes it harder to make a single cohesive network (see above). In other words, you don't have one Twitter, you have four of them, none of which talk to each other. The other caveat to this is that I don't think you can trust a company to properly build or maintain a value-add product. If it's not a priority, it will be underfunded and neglected. Good software is a labor of love.
Next option: socialize it. This is at once obvious and stupid. It's obvious in the sense that one of the roles of government is to provide services that are desirable but that the private sector doesn't provide. But it's stupid in the sense that a slow-moving body like a federal government cannot be expected to keep up with the fast-paced world of technology (unless, of course, it's the technology of killing people). And if you think (as I do) that private enterprise has a tough time building quality software without an immediate vested interest, how good a job can a government do? Then there's the principle of the idea: do we really want the government offering such a frivolous service just because no one else can?
Which leaves only one viable option: get bought out by Google.
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Afterthought: if a government stepped in as a service provider (which has been discussed), do you think people might be more willing to pay for Web 2.0 services, to say nothing of music and movies?
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