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Home » Web 2.0 » Economics and web 2.0

Economics and web 2.0

Web 2.0 is an improved version of World Wide Web. It is the second generation community which is web based and also hosts several services like wikis, social networking sites and folksonomies. The relation between economics and web 2.0 can be analyzed.

The scrutiny of the economic implications of Web 2.0 applications and loosely-associated technologies such as blogs, wikis, open-source, social-networking, open-content, peer-production, file-sharing and other technologies have also achieved scientific attention. The main area of research is to investigate the involvements of Web 2.0 has for an economy. The research also includes the codes which are fundamental to the economy of Web 2.0.
Anthony D. Williams and Don Tapscott try to ascertain in their book, Wikinomics: How Mass Collaboration Changes Everything (2006), the relation between economics and web 2.0. They also argue that the economy of web 2.0 is not independent of mass collaboration. According to Williams and Tapscott, it is very important to understand the relation between economics and web 2.0. They also consider that it as vital for contemporary media companies to discovery ways of how to earn profit with the help of Web 2.0. According to them the new age companies should find out ways to use web 2.0 for their advantage in profit making. The forthcoming Internet-based economy for which they have used the term “Wikinomics” would depend on the doctrine of sharing, peering, openness, and acting globally. They acknowledged seven Web 2.0 business-models. The business models include platforms for participation, peer pioneers, global plantfloor, prosumers, wiki workplace, ideagoras, and new Alexandrians.

Organizations and companies may make use of these doctrines and models in order to grow with the assistance of Web 2.0-like programs. Organizations can design and accumulate products with their customers, and in some special cases the customers can also do the maximum of the value creation. In every instance the conventionally passive buyers of advertising and editorial take participatory and active part in value creation. Williams and Tapscott implies business methods and strategies as models where business partners, masses of consumers, suppliers, employees, and even competitors can co-create a value system when direct managerial control is lacking. Tapscott and Williams view the result as an economic democracy.

Some other opinions in the scientific debate agree with Williams and Tapscott that value-creation mainly depends on tackling open content or source, sharing, networking, and peering. However, many disagree with them regarding the concept of ecomonic democracy. Many people predict a subtle structure and strengthening of exploitation, in which Internet-based worldwide outsourcing reduces the cost of labor. In such a case, the economic implications of a Web 2.0 might incorporate on the one hand the appearance of fresh business-models based on large-scale outsourcing, whereas on the other hand non-commercial online forums could undercut profit-making and expect a co-operative economy. As for example, Tiziana Terranova suggests of “free labor”, where performance would not be paid, in those cases where prosumers create excess value in the circulation-arena of the cultural enterprise.

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