BUILDING A PLATFORM OF BUSINESS MODEL 2.0 TO CREATING REAL BUSINESS VALUE WITH WEB 2.0 FOR WEB INFORMATION SERVICES INDUSTRY

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1 168 International Journal of Electronic Business Management, Vol. 7, No. 3, pp (2009) BUILDING A PLATFORM OF BUSINESS MODEL 2.0 TO CREATING REAL BUSINESS VALUE WITH WEB 2.0 FOR WEB INFORMATION SERVICES INDUSTRY Te Fu Chen Department of Information Management Chang Jung Christian University Tainan (711), Taiwan ABSTRACT The deeper and more important opportunities have always been about directly exploiting the properties of the Web as platform including user generated content, subsequent potentials to harness collective intelligence, network effects, and creating organic, federated software ecosystems that get better the more people use them. There s a whole aspect of Web 2.0 that can drive genuine business value and significant competitive advantage in online software that encourages social collaboration, two-way use of the Web, services that are open and repurposable, Web-based applications, and more. But can you build and grow a real business with these ideas? The study is aimed to facilitate the cooperation of industries, government and academics to create a platform of web 2.0 business model, it is for promoting service industry such as travelling and Online game industries participate Business model 2.0 alliance to quickly respond to large opportunity and global trend for Web 2.0. Furthermore, it is able to promote more commercial opportunities for other service industries such as airline, traffic, transportation, hotel, restaurant and ICT industries etc. to form economic scale and even output to the world via this business model 2.0 platform. This paper presents a theoretically grounded and practical approach to designing viable business models 2.0 to creating real business value with web 2.0 for web information services industry, the model provides a holistic view on business models with four interrelated perspectives, i.e., Service, Technology, Organization and Finance. It elaborates on critical design issues that ultimately shape the business model and drive its viability. Keywords: Business Models 2.0, Web 2.0, Business Value, Business Platform, Web Information Services * 1. INTRODUCTION 1.1 Backgrounds and Motivations of the Study Everyone s talking about online commerce, but who's actually doing it--and how? Where do the revenues come from, where do the expenses go, and where do payment and delivery take place? Although there have been efforts to define, describe, and classify business models, current literature does not provide a structured method of comparing business models between companies within or between industries. A business model is the method of doing business by which a company can sustain itself -- that is, generate revenue. The business model spells out how a company makes money by specifying where it is positioned in the value chain [27]. Dramatic and ongoing growth in Internet commerce activities continues to fuel a frenzy of adoption of Web technologies. The benefits of moving a business to * Corresponding author: phd2003@gmail.com the Web appear well understood, though of the hundreds of thousands of companies and organizations moving online, only a small percentage can truly claim that they re building sustainable long-term businesses. To these concerns, the study points out that this is only one end of a spectrum. Web 2.0 is the new tendency of global network development, develop so-called opening spirit of Web 2.0, recruit more international talents and the creativity, unify web information service and other related industry, will form the positive cooperation circulation among cross-industry. There s a whole aspect of Web 2.0 that can drive genuine business value and significant competitive advantage in online software that encourages social collaboration, two-way use of the Web, services that are open and repurposable, Web-based applications, and more. But can you build and grow a real business with these ideas? To illustrate this argument, the study has collected real-world Web 2.0 business success stories that demonstrate this point.

2 T. F. Chen: Building a Platform of Business Model 2.0 to Creating Real Business Value 169 The website of travelling industry creates thousand hundred million opportunities on the world, According to the data from Forrester, in 2009, entire USA online travelling market earning estimate is 1,100 hundred million US dollars. The growth rate of online travelling for England adds on the Western Europe various countries is more astonishing than the American market. Forrester estimated it will achieve 600 hundred million US dollars of huge scales in According to the data from MIC, in 2005, the overall scale of Taiwan electronic commerce market reaches 598 hundred million NT$, travelling commodity occupies over 60%, moreover this year it still will continue highly to grow. Meanwhile, under the Web 2.0 unrest, the new generation of travelling website has also ready to emerge or upgrade to the Web 2.0 websites immediately. After Google integrate the travel agency and the airline to enhance the strength of Google Online travelling, Yahoo! and AOL immediately merge or integrate new generation of travelling website, and USA Online travelled top 3 websites - Expedia, Orbitz and Travelocity also immediately tied tight, started the thinking in abundance for next step. Taiwan s Ezfly and Eztravel are also carefully planning in the appraisal to add Blog s function etc. Moreover, the Web 2.0 unrest are prosperous, is regarded as a big opportunity by the enterprise, its correlation service and the enterprise management has also produced more new models, for example, more and more enterprises are also start to log in online virtual life game to play Second Life to provide the customer service. The Gartner forecast, to 2011, it will have over 80% of the population who are frequently to access the net and the Fortune top 500 enterprises will develop the second life in Second Life or other virtual environment, will favor to a future piece. The population of the Taiwan area for social network and online game players is fast growth, next step of online commerce is also able to with take off, the potential of online 3D commercial activity is infinite. According to the investigations of Web 2.0 Asian and Pacific regions by IDC (international data information), has discovered there is nearly 50% visited enterprise regard Web2.0 as the significant opportunity, thought the Web 2.0 correlated services and applications, can all have the significant improvement regarding the enterprise in exterior communication and the customer service and even the sale. Do Web 2.0 products or services have a compelling value proposition? Do Web 2.0 products or services have a compelling business model? Can you make money on this stuff? Solving a problem with a solution customers love and will pay for. Not everyone will get to be like Bloglines, Flickr, or Skype. Web 2.0 offers technical advancement through competition. There is a smart approach though and it involves answering simple questions like above. The term Web 2.0 refers to a perceived second generation of web development and design, that aims to facilitate communication, secure information sharing, interoperability, and collaboration on the World Wide Web. Web 2.0 concepts have led to the development and evolution of web-based communities, hosted services, and applications; such as social-networking sites, video-sharing sites, wikis, blogs, and folksonomies. The term was first used by Dale Dougherty and Craig Cline and shortly after became notable after the O Reilly Media Web 2.0 conference in 2004 [12,22]. In the year and a half since, the term Web 2.0 has clearly taken hold, with more than 9.5 million citations in Google. But there s still a huge amount of disagreement about just what Web 2.0 means, with some people decrying it as a meaningless marketing buzzword, and others accepting it as the new conventional wisdom. Although the term suggests a new version of the World Wide Web, it does not refer to an update to any technical specifications, but rather to changes in the ways software developers and end-users utilize the Web. According to Tim O Reilly: Web 2.0 is the business revolution in the computer industry caused by the move to the Internet as a platform, and an attempt to understand the rules for success on that new platform [25] O Reilly has noted that the 2.0 refers to the historical context of web businesses coming back after the 2001 collapse of the dot-com bubble, in addition to the distinguishing characteristics of the projects that survived the bust or thrived thereafter [26]. Tim Berners-Lee, inventor of the World Wide Web, has questioned whether one can use the term in any meaningful way, since many of the technological components of Web 2.0 have existed since the early days of the Web [4,8]. Wainewright [35] argued that Web 2.0 is about using the Web collaboratively (sharing and mixing up information and resources) so moving on from the first generation of the Web, which was more about using websites just to publish content and sell things. Therefore, there exists a need for the study in this area, to clarify just what we mean by Web 2.0 and how we implement web 2.0 business models to create real business value for web information service industries. 1.2 Objectives of the Study The paper is aimed to provide relevant theoretical frameworks and the latest empirical research findings in the area. It will be written for professionals who want to improve their understanding of how implement business model 2.0, through the cooperation of industries, governments and academics to create a platform of web 2.0 business model, to promote the web service industry such as travelling and online game industries

3 170 International Journal of Electronic Business Management, Vol. 7, No. 3 (2009) participate the Business 2.0 alliance to quickly respond to global trends and large opportunities in Web 2.0. Utilize this platform to create large commercial opportunity of travelling and online game from Chinese market and global market. Furthermore, it is able to promote more commercial opportunities for other service industries such as airline, traffic, transportation, hotel, restaurant to participate the platform and then make it extend to other industries such as ICT industries etc. to form economic scale and even output to the world via this business model 2.0 platform. 2. LITERATURE REVIEW Why New Business Models? Often the innovation rests not in the technology or product, but in the business model itself. As old principles no longer work in the new economies, businesses reach the old model's limits with respect to complexity and speed. Therefore, great shifts - genuine and radical transformation - have been shaping the economy and business environment in recent decades. Technology, especially information and communication, has radically altered the requirements for building and managing a successful business. Disruptive technologies require new business models. In the fields of information technology studies, business models, innovation management, and other related fields, there exists a need for the study in this area. Therefore, the section will review Building New Business Models on the Web, Web 2.0 Business Models, Business Model 2.0 and Creating real business value with Web Building New Business Models on the Web Allaire [2] indicated, a firm might combine several different models as part of its overall Internet business strategy. Thus, an advertising model may be blended with a subscription model to yield an overall business strategy that is profitable. Business models on the web evolve rapidly, new and interesting variations can be expected in the future. (1) Online business models Transaction.net [34] summarized the five models of online business and the comparison of online business models as follows: 1.Merchandising Online (Amazon books, salami.com, Preview Travel, Dell Computers, ebay), very specialized niche markets proven for larger-revenue companies who move online. 2. InformationOnline (LA Times archives Wall Street Journal beyond.com), insufficient evidence. Revenue: Customers pay per document, per use, or per subscription; or Sponsors pay to set up (and possibly maintain) the project. 3.Online Access (Earthlink MCI Pacific Bell), service as commodity, so large scale. Revenue: Customers pay for metered usage or subscriptions Play on economies of scale. 4. Online Advertising (Yahoo! and other search engines/portals Netscape hotmail and other free services), requires significant site traffic. Revenue: Businesses or brokers pay per impression or per order. 5. More Efficient-customer Support and Internal Documentation, More, Better, Faster (Federal Express online package tracking U.S. Postal Service Intranets): most businesses can enhance operations w/ the web. Revenue: Cost-cutting: take advantage of speed and interactivity more personalized customer service at all hours better documentation, communication, and training within the organization build relationship with customers w/o any of you wasting time in a store. In many cases the benefits of the Web are simply obvious, such as when new time or cost based efficiencies are introduced into a business process, or when new models of communication and exchange are created through the Web [2]. E-Business Strategies, Inc. [11] indicated, what is the difference between a business model and revenue model? The business model lays out the strategy -- what should be done or how to create value? The revenue model spells out the execution - how to convert the value creation into cash-flow. A Business Model is the umbrella term used to describe the method - position in the value chain, customer selection, products, pricing - of doing business. A Revenue Model lays-out the process by which a company actually makes money by specifying how it is going to charge for the services provided. (2) A comprehensive and cogent taxonomy of business models observable on the web Many scholars adopted many different ways to define and categorize business models. Rappa [28] proposed one attempt to present a comprehensive and cogent taxonomy of business models observable on the web. The proposed taxonomy is not meant to be exhaustive or definitive. Internet business models continue to evolve. People expect new and interesting variations in the future. The basic categories of business models discussed below: 1. Brokerage Model: Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. A broker makes its money by charging a fee for each transaction it enables. 2. Advertising Model: Generalized Portal--The high volume traffic makes advertising profitable and permits further diversification of site services. Personalized Portal--The profitability of this portal is based on the value of information derived from user personalization. 3. Infomediary Model: Data about consumers and their buying habits are extremely valuable. Especially when that information is carefully analyzed and used to target marketing campaigns. The informediary model can also provide consumers with useful information about the web

4 T. F. Chen: Building a Platform of Business Model 2.0 to Creating Real Business Value 171 sites in a market segment that compete for their dollar. 4. Merchant Model: Classic wholesalers and retailers of goods and services (increasingly referred to as e-tailers ). Sales may be made based on list prices or through auction. 5. Manufacturer Model: This model is predicated on the power of the web to allow manufacturers to reach buyers directly and thereby compress the distribution channel. The manufacturer model can be based on efficiency improved customer service, and a better understanding of customer preferences. 6. Affiliate Model: the model provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives to affiliated partner sites. The affiliates provide purchase-point click-through to the merchant. 7. Community model: The viability of the community model is based on user loyalty. Having users who visit continually offers advertising, infomediary or specialized portal opportunities. The community model may also run on a subscription fee. Business Trading Community or vertical web community. 8. Subscription Model: Users pay for access to the site. High value-added content is essential. Generic news content, viable on the newsstand, has proven less successful as a subscription model on the web. 9. Utility Model: The utility model is a metered usage or pay as you go approach. Its success may depend on the ability to charge by the byte, including micropayments. [28] 2.2 Web 2.0 Business Models (1) From Web 1.0 to Web 2.0 In initial brainstorming between O'Reilly and Media Live International, they formulated their sense of Web 2.0 by example from Web 1.0 to Web 2.0 as follows: 1. Web 1.0: DoubleClick, Ofoto, Akamai, mp3.com, Britannica Online, personal websites, evite, domain name speculation, page views, screen scraping, publishing, content management systems, directories (taxonomy), stickiness. 2. Web 2.0: Google AdSense, Flickr, BitTorrent, Napster, Wikipedia, blogging, upcoming.org, and EVDB, search engine optimization, cost per click, web services, participation, wikis, tagging ( folksonomy ), syndication. The list went on and on. But what was it that made us identify one application or approach as Web 1.0 and another as Web 2.0? The representative website of Web 2.0 is as follows: 1. Google Maps (maps.google.com): Google adopts Ajax technology to make browsing and operating web map just like desktop system, and open API to make users are able to self-setup advanced use for map information. 2. Wikipedia (zh.wikipedia.org): Wikipedia makes the most successful Wiki system paradigm, let everyone can co-write and edit any items and subjects via wiki. 3. Flickr ( Flickr mashes up Ajax and Flex technology, makes users after upload photos, can carry on catalog in friendly interface. 4.37signals ( 37 signals adopts the way of SaaS, promotes including the project system, the office collaboration operation etc. a series of services. Battelle [7] assumed, the building of a better web, or more aptly, better Internet and web businesses, versus it representing an impending bubble. The progression and development of Web 2.0 companies compared to the dot.com days are as follows: 1. More broadband connections 2. Low start-up costs 3. Better search 4.Lack of IPO pressure. These factors have powered a number of successful Web 2.0 companies, where as Battelle [7] notes, Web 2.0 is in some ways simply a new way of approaching business. Today s influences lead to an important distinction. While many of these startups still hope to be snatched up by the likes of Google or Yahoo! those with the right approach don t need to be - they have viable revenue streams. Interestingly enough, that makes them even more desirable as potential acquisitions. Now, most people following this space are aware that ebay, Amazon, and Google are held up as exemplars and the successes of the Web 1.0 era because they were Web 2.0 before it was fashionable. The argument is they did this by leveraging user contributions, offering open Web services for others to integrate with, building hard to recreate data sources, etc. Hinchcliffe [13] indicated, which does a great job of setting out how we got to where we are with the Web. To really understand Web 2.0 you have to think beyond today s social software fads and start imagining new combinations of interactions between people, software and data, at every level of scale from individual to global. Yarmosh [39] pointed out, today s Web startups are not entirely unlike their dot.com predecessors when it comes to the way they are thinking about making money. The differences for Web 2.0 type companies stem not from their preferred business models but in the forces influencing the implementation of those models. Next, this paper will review some important web 2.0 business models. (2) New models for Web 2.0 Phil Wainewright indicated that the main issue of Web 2.0 is a lack of business models. Richard MacManus [18] argued the business model for mashups is still in question, there is no business model for mashups. If Web 2.0 really is just mashups, this is going to be one short revolution. Rip [29] indicated, the Web 1.0 business model doesn t work in Web 2.0. But the value driver remained the same -- human interaction with the web site, shifting from viewing to clicking. As technology investors, one thing they have learned (the hard way) is that the current model often morphs into the new model. Rarely does a new model replace the old model in a wholesale manner. Rip [29] proposed new models for

5 172 International Journal of Electronic Business Management, Vol. 7, No. 3 (2009) Web 2.0 as follows: 1. Micropayments: Micropayments have been around the corner for ten years - Digicash, Cybercash, etc. But user-pay systems only work for high-value and/or exclusive goods. So, user-pay models will be out there, but they will probably be a small minority of the transactional mashups in B2C markets. 2. Shared Value: The YHOO, GOOG, and now ASKJ ad networks will be bundling A. contracts to police gaming and B. payment settlement systems to enable the shared value model. If so, they will initially 'host' the mashups and extract the lion s share of the value for aggregating the users and enabling the settlement. They will eventually syndicate this model to mashups all over the web, using the same settlement network model. 3. New Revenue Networks: If you provide APIs, the mash-ups are a free inspirational incubator of what can be done with your product. For business model, why wouldn t it be something simple like vendors of data licensing commercial access to aggregators of data? The only new part might be a cost per query model (CPQ) rather than CPC or CPM. An aggregator of data or mashup will simply set the consumer purchase price to be something greater than the aggregated data costs from each data supplier. This is the way it s done in the real world where there is a chain of businesses, each charging their cost + profit. If a service provides an API for developers, they should give full access without limitations. (3) Web 2.0 powering verticals Yarmosh [40] assumed the most successful services have two key elements. The first is that they offer some sort of compelling value proposition to users. The second is that this value proposition is driven by a laser focused service offering. The types of companies purchased: Upcoming.org, Moreover, Skype, and Flickr, these services offer solutions. They solve a problem and solve it well. Content is following a similar evolution. As opposed to the more traditional portal model, users are beginning to rely on niche voices to give them expert insights into what they consider important - news, politics, technology, and so forth. The power of the verticals is at work. People like services that do one thing extremely well over doing many things just OK. They enjoy visiting sites that produce content around one subject. New service Squidoo is in many ways the platform of the vertical. Everyone is an expert at something. Squidoo is a tool that allows people to quickly and easily create a lens around specific areas of interest, around areas they are passionate or knowledge about. Use Web 2.0 to power your vertical. Stay focused. Solve a problem. Bring value. (4) Trust and Web 2.0 business models Mulholland [20] indicated, happening in the different ways that individuals are behaving online in Web 2.0, and the characteristics of those successful Web 2.0 businesses. A Web 2.0 business is characterised by its use of awareness, from an online business which is recognisable by having the usual business model transferred online. Web 2.0 businesses have a different challenge, they can be aware in themselves in terms of market demand, and their community can be aware as individuals, but how does the trust model get created? Does it take time, and must a brand be established first? It s a key question for the new and innovative business models, and something that some at least seem to have succeeded in managing. The potential customer base of new Web 2.0 businesses has both enlarged and behaves different. Here the answer seems to be community endorsement as with on awareness as a perfect example. This is a recognisable extension of the principles of where the rating on other members of the community is the method of providing trust. However the degree to which these are now both niche and interactive communities is changing, it now seems to be more about depth than width. So why the heading Trust? The Web now seems to be so familiar and part of many (younger) people s lives that new ways to establish trust seem to have been established. Businesses wining over these people as customers have to meet them in the new way to build trust. Less focus on the product and transaction with more focus on the community and experience is probably the summary [20]. (5) Developing strategies for Web 2.0 in the enterprise Hinchcliffe [14] indicated, it s missing discrete scenarios for enterprise uses of these applications. The shift of control from organization to individual seems to be part of the problem. The advent of widespread Social Computing in the form of user generated content and democratization of control over media changes the basic perspective, and probably makes it harder to see many of the scenarios. So what Hinchcliffe [14] would like to do is put together a list of Enterprise Web 2.0 solution scenarios to help frame up the possibilities for each of the major categories. Each scenario will cover a product category and show how the Web 2.0 solution could be applied to specific business situations inside the enterprise and out across the Web both. Along those lines, he d also like to put together a rough matrix of the risk and effort level for implementing these with respect to each other. List like the ones Jeff Nolan and others put together but that provide the enterprise context that is needed so the specific advantages (and risks) are clear. Armed with more actionable information like this and early implementers will have some good basic ideas on where to starting using these potentially disruptive yet largely beneficial technologies. (Disruptive to their competitors who don t use them, or to

6 T. F. Chen: Building a Platform of Business Model 2.0 to Creating Real Business Value 173 themselves if they don t, that is.) Let s to explore this approach to see if we can learn more about how to move the widespread innovation occurring on the Web into the enterprise. Here are the Web 2.0 in the enterprise strategies explored so far: Blogs, Wikis, BPM - Part 1, BPM - Part 2, Web 2.0 Architecture: WOA and REST. (6) Two Web 2.0 business models: Technology and network effects Yarmosh [38] has taken a stab at defining Web 2.0 business models, putting companies into either of two buckets: technology-focused or network effects-focused. Both are closely related and in some ways, rely on the other for true success (see Figure 1). Web 2.0 is a movement and not a demarcation point. But if you think about many of the new companies out there, chances are they would fit into one of these two models. Web 2.0 isn t just about mashups, there are many other opportunities for web-based services that utilize aggregation, syndication, user content, and other characteristics of this era of the Web. The comparison of two Web 2.0 business models is as follows: 1. Technology Focused: The technology business model is one primarily based around innovation, offering a compelling value proposition not available elsewhere. These services are extremely useful and can be fully utilized without any investment on the part of a user. It is important to observe that in certain cases of the technology business model, such as Skype, network effects help drive both the adoption and value of the service. These models also enable the possibilities for partnerships, where those such as FeedBurner can leverage their technology to help manage content delivery for papers like the Houston Chronicle. 2. Network Effects Focused: The network effects business model is one primarily based on user base and user interaction. Like its counterpart, technology is key for this model but it is not the focus. Instead, technology is important as an infrastructure tool, facilitating the business models of these companies. Of course, in any network effects business model, the idea behind Metcalfe's law comes into play - the total value of the service is roughly proportional to the square of the number of customers utilizing the service. If Google, Amazon, or Craigslist, would charge even a nominal fee for access to their data, they would make a killing. Such a change may not be possible at this point but could be an option for others who pursue a network effects business model down the road. Figure 1: Web 2.0 business models [38] 2.3 Business Model 2.0 Stephens [31] indicated, if you back up and look at your business model, then you will see that your current information systems don t handle every aspect of your model. Maybe you do have a project management system or a system to procure network addresses but you don t have systems in place that manage your customer relationships, your cost tracking, or simple communications within the group. Here is where Collaborative and Social Solutions can fill in the gap. With 25,000 sites within the enterprise, there is no limit to what is currently being automated. There is a learning curve on how these tools can be setup, configured and even programmed to some level. Over the next few years, we will continually be asked to deliver more value, faster delivery, and utilize less resources. The only way to accomplish this is to automate as many of the small tasks as possible and you have the Business 2.0 tools within your own company. Allaire [2] indicated, Internet Business Models 2.0 on the Horizon. Many of new online businesses models, in fact, are driving new ideas in overall business models, and opening up entire new economies. Broadly coined Affiliate and Syndication Networks, these models enable any Web site (theoretically) to leverage the assets of other Web sites to create new value. A great example of this was pioneered by Amazon.com, who introduced an affiliate program years ago. But the idea expands radically once one realizes that this model could be at the core of a broader revolution in how we view the Web. Based on Metcalfe s Law, which states that the value of a network (the Internet) increases exponentially for every n-node added to the network, this is the basis for a shift in how we develop online businesses. In this new worldview, every Web site out there is a potential asset for your own Web site. Instead of viewing the Web as islands of content linked together merely by surface-level hyperlinks, it views the Web as an interconnected network of value, with sub-surface-level links between the content, commerce and customer assets of every Web site. In short, it is an entirely new economy built out of the Web.

7 174 International Journal of Electronic Business Management, Vol. 7, No. 3 (2009) Taking your Web business to the next level requires Web syndication and affiliate networks. Getting there requires introspection on what aspects of your business support this model. For example, consumers and e-commerce providers have a clear model for exposing content and commerce transactions to site partners. Other examples might include exposing classic customer leads and contact info to exclusive partners via an extranet that uses an XML interface for sharing data. The good news is that once you ve figured out what assets you want to exchange and expose, getting there is simple. The WDDX (Web Syndication and Web Distributed Data Exchange) provides a fantastic facility for exchanging data with other Web applications. Once you've absorbed the basic mechanics of WDDX, you're on your way to building a custom SDK (Software Development Kit) for your site. In this model you provide your site affiliates with a custom SDK for remotely accessing services and data from your site. [2] Thornton [32] indicated, the term Customer is King is not new but talk is cheap. Committed action comes in the form of business models that are subjugated to customers, employees and suppliers. Who better than a monarchal government to understand true subjugation? The British government directs the BBC. They effectively committed their business model to 2.0 thinking 18 months ago. By embracing on demand distribution of content, they subjugate the business model to the consumer. The model focuses on consumer needs/preferences rather than forcing the consumer to embrace business needs/preferences. The professional employees at the BBC clearly understand that online is simply a channel: Not a traditional broadcaster with a rather good website but a deliverer of high quality content over the web and other digital channels. For Enterprise 2.0, the point is the same. Leveraging 2.0 requires a total collaborative enterprise architecture, for which online is just one channel of interaction. To not connect conversations across channels is shortsighted. If 2.0 is implemented as a technical initiative the digital will not be integrated with the analog. To repeat again, Enterprise 2.0 is about connections connecting people, their conversations, their artifacts, and all other corporate resources. ROI should now be Relevance of Initiative - specifying how relevant the initiative is to unleashing the power of the employee, by freeing their voices/efforts and connecting them to one another. The initiative must show how it subjugates the business and its resources to the human potential: the most expensive capital investment with the greatest untapped return. 2.4 Creating Real Business Value with Web 2.0 (1) Web 2.0 is not about chasing the technology but about delivering straightforward value to customers Adkisson [1] indicated the argument over which type of innovation is more sustainable: technical innovation or business model innovation. The problem with the whole promise of Web 2.0 is the discussion seems focused on technical innovation. The business model innovation on the Web - notably, the economics of serving the long tail (niche markets that pre-internet were difficult to serve profitably). From today s Wall Street Journal, on Ajax-fueled investing: Ajax makes our site more useful to our users says Rob Solomon, Yahoo s vice president of shopping. The Journal continues: A similar investing craze erupted a few years ago over social networking start-ups such as Friendster, Stand-alone social-networking companies haven t wound up being that successful, though the technology has been integrated as a feature into many e-commerce and content sites. As always it's not about chasing the technology - it s about delivering straightforward value to customers. Slowly, Web 2.0 will dramatically improve the user experience on the Web and help businesses deliver greater value. (2) Real-world Web 2.0 business success stories The study has collected real-world Web 2.0 business success stories from Hinchcliffe [14], he proposed companies using Web 2.0-style techniques for business advantage as follows: 1. NHN s Naver Search Engine: not only is NHN using Web 2.0 techniques like gathering collective intelligence and social collaboration to achieve market domination, but they sold over $228 million in online ads on their service last year, making their stock go through the roof in recent months. 2. Amazon s Web Services Division: Currently taking in more than $211 million a year, Amazon s Web services turns most of its online storefront into a full blown open platform that supports a large and thriving community of companies that re-use Amazon s best-of-breed On Demand commerce services. 3. IBM, Salesforce, and Microsoft Provide Self-Servicing to SMBs: The potential of the Web to offer true customer self-service, particularly to small audiences en masse, still has largely untapped commercial potential. This has led to the coining of the term, The Long Tail, a key concept in the Web 2.0 toolkit. The New York Times recently covered how both Salesforce and IBM are generating significant new revenue and business results from these smaller markets. As for Microsoft, is from small and medium business. 4. Craigslist and Google Base: both Craigslist and Google Base aspire to be, successful commercial services created from their user s data. While Craigslist and Google both have done things occasionally to create walled gardens of their data, the point is that the more they do this, the more likely they will hurt themselves. 5. Katrinalist.net and Antbase.org: Both of these are completely non-commercial sites that demonstrate the raw power of harnessing collective intelligence and scalable marshalling of underutilized data resources, respectively.

8 T. F. Chen: Building a Platform of Business Model 2.0 to Creating Real Business Value 175 (3) Creating real business value with Web 2.0 Hinchcliffe [13] pointed out, it's important to note that the free-wheeling Web 2.0 world on the Web - with gigantic viral communities, sites made of mountains of user generated content - are far less constrained by regulation, governance, privacy, and trust issues than business sites are. Thus figuring out how to leverage the positive aspects of the emerging best practices on the Web today, without eliminating the very benefit they provide, is one of the biggest challenges in providing a Web 2.0 context in the enterprise. Emerging web 2.0 best practice includes using software as a service for direct customer-driven product development and letting users be co-creators and contributors. The whole point of Enterprise Web 2.0 is to put best practices for creating Web experiences into the hands of business people, Web designers, and users so that we make the most of the systems, users, and information that we have. For example, the vast, aging inventories of otherwise useful information is one of the bigger wastes in IT today. Web 2.0 encourages us to put it all online, make it user organizable, findable, and to build a community around it. Therefore, it is leveraging the activities of users as they interact with online systems. Both first class participation mechanisms like tagging, ranking, commenting are important but so are second order mechanisms that track what users are looking at, saving particularly popular data sets and making them easily shareable and reusable. Figure 2: Creating real business value with Web 2.0 [13] Hinchcliffe [13] indicted, Web 2.0 is putting excessive focus on: Ajax and open APIs, to the exclusion of "look beyond the user interface to distributed systems, scalable solutions and a network architecture that will support the needs and aspirations of the next five billion users." Interestingly, while rich user experiences are indeed an important facet of the Web as it has become a true platform in its own right, Web 2.0 has fundamentally been about those exact things. It is true however, most organizations can probably get nearer-term, less disruptive ROI faster by merely putting dynamic user interfaces on their Web pages. However, the deeper and more important opportunities have always been about directly exploiting the properties of the Web as platform including user generated content, subsequent potentials to harness collective intelligence, network effects, and creating organic, federated software ecosystems that get better the more people use them (i.e. the blogosphere, SourceForge, Flickr, itunes, etc.) Unfortunately, though there have been increasingly rigorous definitions about what Web 2.0 is, many people still focus exclusively on only the more popular new surface elements of Web sites: the evolution of the visual Web user experience [13]. Moreover, as Bill Thompson points out, the nascent trend of (often quasi) open Web APIs. But while the latter story will likely only grow stronger, Ajax and RIAs are almost of peripheral interest when it comes to trends on the Web that appear to be genuine game-changers in business, the enterprise, or even the consumer space. The fact is, as we look at the unique properties intrinsic to the Web itself - as well as its scale and pervasiveness - we can see how the rules of online software aren t being so much rewritten as fundamentally discovered anew. And some industry watchers are starting to see major opportunities - even a mandate - to reinvent products and services to embrace the potentials of this new platform. And this line of thought this takes us to the first part of our story: How major corporations are starting to seriously explore the use of Web 2.0 techniques in various aspects of their business [13]. 3. WEB APPROACHES AS THE NEW TIMES OF SERVICE PLATFORM 3.1 Applying Web 2.0 in the Enterprise Morgan [19] indicated, American Express Technology gave a fascinating presentation on how the financial services giant has become an enterprise user of Web 2.0 technology in a number of rather significant ways. He noted, there appears to be happening in a variety of organizations a distinct trend towards integrating the initiatives around service-oriented architecture (SOA) and Web 2.0 since they overlap extensively and are often handled

9 176 International Journal of Electronic Business Management, Vol. 7, No. 3 (2009) by the same internal groups. Indeed, they are almost two sides of the same coin. Thus, his presentation specifically focused on how these two conceptual approaches seem to be converging for them as well how their product development models are also changing to a more Web 2.0 methodology with things like leveraging customers as testers and co-creators. However, he went on to keep explore how Web 2.0 techniques, when combined with SOA, can help deliver returns that SOA by itself generally hasn't been able to. Finally, he explored some of the specific challenges of Web 2.0 in the enterprise, noting that these are not negative statements, but just challenges that have to be seriously sorted through as companies evolve their products and services to these new models. Morgan [19] proposed Web 2.0 and SOA Combined: Three Resulting Aspects as follows: 1. Improving the Customer Experience ( this is top for us ): Interactive, dynamic compelling user experience; Convenience and reach. Harnessing user generated content in recent promotions they ve been doing. Experimenting with rich Internet applications: RSS used on customers sites and partner sites. Looking at RSS technologies, subscribe to the events that are interest to them, and get notified when they want. 2. Community and Collaboration: Experimenting and piloting wiki technologies; Pretty good uptake with tools by internal teams to collaborate and generate content; AmexLabs, an online area where select customers come into a site and preview and provide feedback of new interactive capabilities (these customers are individuals, not businesses, cardholders); Gives us the opportunity to better understand how products are being developed); Pioneering and piloting widget technologies. 3. Simplicity and approachability: How do we make integration a whole lot easier (REST)? Leveraging the ease of use of the consumer Web. 3.2 Capabilities Innovative Web 2.0 Platforms Slatnick and Parkins [30] proposed Capabilities innovative Web 2.0 platforms as follows, key requirements of innovative and collaborative Web 2.0 platforms include: 1. The ability to increase the funnel of new service ideas through collaboration internally (among employees) and externally (with strategic partners, software developers and subscribers). 2. The organization of ideas with a documented process for requirements capture and portfolio management. 3. A reduction in the cost of innovation by providing a low-friction, cost-effective environment for collaboration. 4. An opportunity to validate market assumptions prior to the significant investments required for commercial launch. 5. Price experimentation to determine subscriber willingness to pay. 6. An environment for an iterative approach to service innovation-start with an idea, test its feasibility with customers, launch a market trial, capture customer feedback, implement enhancements, and launch again until confidence in commercial success is high. 7. A broad range of service concepts including new applications, content and devices such as new mobile phones and specialized industry-specific devices. The most cores concepts of Web 2.0, are the transmission content from the past by the website for user's unidirectional pattern, transformed the bi-directional interaction way, enabled the user to be allowed in website this platform, participation content production. The key of Web 2.0 does not lie in how new it is, but lies in whether it has displayed the true strength of network platform. The four stages of Web 2.0 introduction for the enterprise: (1) Idea-Web 2.0 actuations enterprises operate new thought (2) Upgrade-Enterprise 2.0 raises the work of knowledge management (3) Induction -to induct the Web 2.0 technologies and the product to enterprise (4) Development - develops the new technology which the rich users experiences of Web The New Era for Web Approaches as the Service Platform Definitely, Web 2.0 unrest until now is still carried under the arm and formidable strength unceasingly to raid volume all quarters, and grew all kinds of 2.0 concepts. For example, Travel 2.0, Online game 2.0, Health 2.0, Publisher 2.0, Identity 2.0, Security 2.0, Library 2.0, Net 2.0 and so on, the code numbers of 2.0 editions became one kind to break a generation of mark and innovation mark. All kinds of websites and service flaunted 2.0 concepts are more and more. The website are regarded as Web 2.0 concepts in Taiwan such as Yam the Blog which manages blog portal website, Wretch; Hemidemi and MyShare; PChome Online synthesized the many kinds of services to promote Portal 2.0, Yahoo! has also used the Social Media concept to flaunt it had the Web 2.0 concepts services under the firm s flag. Taiwan has already slightly felt behind in the Web 2.0 starts, moreover, development situation is also not bright, mostly concentrated in community service. Except blustery Web 2.0 websites, BEA, IBM, Microsoft company and so on, they have also all already smelled the Web 2.0 transformations, joined the Web 2.0 concepts of technologies in the product in abundance, or applied the related technology in the company. For example, Microsoft was quite ingeniously applied the blog in breaking fixed impression and internal coordination operation, the fact proved it produced the quite big benefit. Take Web as the platform is the core idea, the core of Web 2.0 is to provide a platform to fill the bi-directional interaction the platform lets the user participation. Using the collective intelligence is inevitably development tendency after a network platform, through the result from the user to

10 T. F. Chen: Building a Platform of Business Model 2.0 to Creating Real Business Value 177 accumulate participates in the platform, and lets the original platform service have the potency. Therefore, through program mixes, builds or lets the user participation to raise data value, is the important spirits of Web 2.0. A important phenomenon in Web 2.0 is to take the service as the orientation, therefore, regards software as service, flexibly promoted the new function as necessary the edition correction has changed the way through the edition correction to charge the fee in the past, this will also create the significant transformation of business model. In many networks services even pose as "beta" edition by forever, emphasized the dynamic alignment function to conform to the user demand service spirit. Since take the service as a center of gravity, the rich user feeling has become the place which Web 2.0 regarded as important. How enables the user to more directly and more effectively use network, becomes the important key. Therefore, no matter is Rich Internet Applications (RIA) interface which presents by Flash perhaps or Ajax technology upsurge impetus by Google, the intention is all when lets the user uses network, may approach the experience of Desktop application program, reduces the time waits for the page. Although Web 2.0 is known as take the network as a platform, but O Reilly actually thought this concept should not limit to moves on the homepage, but is extends the homepage activity to all kinds of installment, therefore, O Reilly has also stressed, the Web 2.0 keys do not lie in it how newly, but lies in whether it has developed the true potential of network platform. 3.4 Business Models for Web 2.0 Community Högg, et al, [16] presented Components of Business Models of Web 2.0 communities, for each of the identified generic components of business model the prevailing typical applied solutions in practice have been identified. The emergence of Web 2.0 communities does not correlate with a specific technical innovation. From a technical point of view, Web 2.0 communities simply combine existing protocols and computer languages in a unique way [17]. Nevertheless, technologically Web 2.0 community is enabled by maturing basic technologies as peer-to-peer technologies, web services and semantic web as well as new script languages as AJAX. Peer-To-Peer technologies enable building of communities related to file sharing [10]. Web Services [3] and semantic web enable a seamless integration of different services and application as well as bundling of basic services to complex applications. AJAX allows for the design of bandwidth efficient applications. The core idea is to reduce the data which is exchanged between the client and server. The application of the above technologies in general result in user-friendly application that hide technical details and mark-up languages and empowers even non-technical users to create and edit content [17]. The Web 2.0 communities could not be observed that any Web 2.0 service could gain any advantage using a superior technology. Contrariwise, open standards and an open source philosophy are the fundament of Web 2.0 [22] and foster the paradigm of user-generated content. The basic Web 2.0 technologies, which were mentioned in above can be applied for development and offering of different Web 2.0 platforms and services that can be used (consumed) by users and usually evolve to virtual homes of various kind of Web 2.0 communities. The services offered can be classified according to different categories: Depending on the type of content on which the offered services focus as well as the functionalities they offer, the resulting communities can be classified as follows [5,17]: Blogs and Blogspheres, Wikis, Podcasts, Social networks, Social Bookmarking or Folksonomies. However, from a business model perspective, not the resulting community but the service is of importance that has the potential to result into a community. In order to enable community-building, the services provided for Web 2.0 communities consist in general of three components: The main focus lies on content and services for collaborative creating, management, updating and sharing of content. The services are offered furthermore in three different forms: 1. in form of a platforms or tools that can be used by users to initiate communities. 2. in form of online collaboration tools that are offered as online applications (in contrast to local application) or in form of workflows that map a process to an online environment. 3. community services. Communities unify users through a common objective. Community platforms offer complex services for social creation of content of various kind. The various kind of services offer different participation possibilities for users. From a user perspective, the decision is based on the perceived effort of participation and the expected benefit from participation. Depending on the implementation of the mechanism this kind of services is highly reliant on network effects. The service provider has to provide the technology platform as well as to facilitate the knowledge exchange by a set of formalized guidelines and to cultivating the community culture. From a business model perspective a general feature of the offered services is versioning. 4. CONCLUSIONS While the total online revenues from both current and archived content are not huge when compared to other categories of online commerce, going online for content is now and will be in the future the single most common use of the Internet.

11 178 International Journal of Electronic Business Management, Vol. 7, No. 3 (2009) We can see a three-fold growth rate for general content from , with the fastest growth in online music, online games and general news and archives content. Growth in business model 2.0 will probably grow faster than indicated if and when firms develop a platform and a business model to support the platform. To creating real business value with web 2.0 for Web-based services industry, the study proposes to integrate the resources of industries, governments and academics to create a platform of web 2.0 business models. The platform will continuously play a critical role to drive Taiwanese businesses to actively involve in R&D for innovative web technology applications and services with demonstrative, commonality, or integrative features with technological endowments. Such diversified development of novel operation model should stimulate new business opportunity for the industry. Successfully help companies from a variety of industries to develop new operating models and establish benchmarking for other companies to follow. The study contributed to facilitate the creation of a platform of web 2.0 business model, it is for making service industry such as travelling and Online game industries join Business 2.0 alliance to quickly respond to global trend and large opportunity for Web 2.0. Moreover, it is able to promote more commercial opportunities for other service industries such as airline, traffic, transportation, hotel, restaurant and ICT industries etc. to form economic scale and even output to the world via this business 2.0 platform. In summary, the study explores business model, business model on the web, web 2.0 business models, the applications of web 2.0 and how these various business models can create real business value with Web 2.0 through building a platform of Business 2.0 alliance to accelerate the growth of highly value-added Web information services industry. REFERENCES 1. Adkisson, H., 2005, The technology chase, 2. Allaire, J., 2009, Building New Business Models on the Web, USA: SYS-CON Media Inc. 3. Alt, R., Heutschi, R. and Osterle, H., 2003, Web services: Hype oder losung? Outtasking statt outsourcing von Geschaftsprozessen, New Management, No. 1/2, pp Anderson, N., 2006, Tim Berners-Lee on Web 2.0: Nobody even knows what it means, 5. Bachle, M., 2006, Social software, Informatik Spektrum, Vol. 29, No. 2, pp Barnwal, R., 2007, Web 2.0 is all about understanding the economic value of social interaction, news/1977.asp. 7. Battelle, J., 2005, The Search: How Google and its Rivals Rewrote the Rules of Business and Transformed our Culture, New York: Portfolio. 8. Berners-Lee, T., 2006, Developer works interviews: Tim Berners-Lee, dwi/cm-int082206txt.html. 9. Bernoff, J., 2008, The real business model for Web 2.0: Corporate clients, why-id-bet-on-w.html. 10. Best, D., 2006, Web 2.0 next big thing or next big internet bubble? Lecture web information systems, /WIS/Web2.pdf. 11. E-Business Strategies, Inc. 2008, Mobile revenue models: The economics, Graham, P., 2005, Web 2.0, Hinchcliffe, D., 2006, Creating real business value with Web 2.0, Hinchcliffe, D., 2006, Developing strategies for Web 2.0 in the enterprise, Hinchcliffe, D., 2006, The state of Web 2.0, Hogg, R., Meckel, M., Stanoevska-Slabeva, K. and Martignoni, R., 2006, Overview of business models for Web 2.0 communities, Proceedings of Gemeinschaften in Neuen Medien, pp Josef, K. and Hermann, M., 2006, The transformation of the web: How emerging communities shape the information we consume, Journal of Universal Computer Science, Vol. 12, No. 2, pp MacManus, R., 2005, Web 2.0 business models, p= Morgan, B., 2008, Notes on Using Web 2.0 to Leverage SOA, Ireland: American Express, VoiceSage Ltd. 20. Mulholland, A., 2006, Trust and Web 2.0 business models, ctoblog/2006/12/trust_and_web_20_business.php. 21. O Reilly, T., 2002, Amazon Web Services API, O Reilly Network. 22. O Reilly, T., 2005, What is Web 2.0: Design Patterns and Business Models for the Next Generation of Software, O Reilly Media Inc. pp O Reilly, T., 2006, Web 2.0 compact definition: Trying again, /12/web_20_compact.html. 24. O Reilly, T., 2006, Levels of the Game: The Hierarchy of Web 2.0 Applications, O Reilly

12 T. F. Chen: Building a Platform of Business Model 2.0 to Creating Real Business Value 179 radar. 25. O Reilly, T., 2006, O Reilly and CMP Exercise Trademark on Web 2.0, Slashdot. 26. O Reilly, T., 2008, On the Future of Social Media, Talk of the Nation Science Friday, NPR. 27. Porter, M. E., 1985, Competitive Advantage, New York: Free Press. 28. Rappa, M., 2008, Business models on the web, Rip, P., 2005, General Partner, Crosslink Capital, Web 2.0 Needs Business Model 2.0, /07/business_model_.html. 30. Slatnick, M. and Parkins, G., 2007, From Collaboration to Innovation: Leveraging Web 2.0 to Accelerate New Service Ideas, IBM Service Delivery Platform Solutions. 31. Stephens, T. R., 2007, Business model 2.0, business_model_20.html. 32. Thornton, P., 2007, Business model 2.0: The customer is king, filed under 2.0 design thinking, enterprise 2.0, /2007/08/20/business-model-20-the-customer-isking. 33. Torkington, N., 2006, O Reilly s Coverage of Web 2.0 as a Service Mark, O Reilly Radar, Transaction.net, 2008, Business models, Wainewright, P. 2006, Defining Web 2.0, Wainewright, P., 2005, The great Web 2.0 application(s) mash-up, SAAS/index.php?p= Yarmosh, K., 2005, Bootstrapping Web 2.0, Yarmosh, K., 2005, The great web and Web 2.0, Yarmosh, K., 2005, Web 2.0 business models, 01/web-business-models. 40. Yarmosh, K., 2005, Web 2.0 powering verticals, powering -verticals/. ABOUT THE AUTHOR Te Fu Chen is an Assistant Professor in Department and Graduate School of Information Management, Chang Jung Christian University, Taiwan. Prior to this job, he was an Assistant Professor in the department of International Business, Ching Yun University, Taiwan. He received his Ph.D. in School of Management, College of Business, University of western Sydney (UWS) in 2007, Australia. His papers were published in various journals such as: Edward Elgar (EE) Publishing Ltd, IGI Global Publishing group, Journal of Global Commerce and Management, Tamsui oxford journal of management sciences, Journal of knowledge management and practice, International journal of e-business management (EI), International Journal of Central Asian Studies etc. He is the Editor of IGI global publishing group (formerly Idea Group Publishing) and IBIMA Journal of innovations management in SMEs. IGI Global is ranked 10 out of 10 by Library Journal and recently named 2008 Best Reference Collection, IGI is also the establisher of Information Resources Management Association (IRMA). (Received November 2008, revised June 2009, accepted June 2009)

13 180 International Journal of Electronic Business Management, Vol. 7, No. 3 (2009) 建 立 一 個 商 業 模 式 2.0 平 台 與 網 路 2.0 一 起 去 創 造 真 正 的 商 業 價 值 為 網 路 資 訊 服 務 產 業 陳 德 富 長 榮 大 學 資 管 系 ( 所 ) 台 南 縣 歸 仁 鄉 長 榮 路 一 段 396 號 摘 要 直 接 地 利 用 網 路 資 產 作 為 平 台 總 是 與 更 加 深 刻 和 更 加 重 要 的 商 機 有 關, 包 括 使 用 者 產 生 內 容 持 續 潛 力 去 利 用 集 體 智 慧 網 路 效 用, 與 創 造 得 到 更 好 更 多 人 使 用 他 們 的 有 機 聯 盟 的 軟 體 生 態 系 統 有 一 個 全 方 位 的 網 路 2.0 可 在 線 上 軟 體 驅 動 真 正 企 業 價 值 和 重 大 的 競 爭 優 勢, 這 鼓 勵 社 會 協 同 合 作 網 路 的 雙 向 使 用 服 務 是 開 放 和 可 再 利 用 的 網 路 為 基 礎 的 應 用 等 等 但 您 可 以 用 這 些 構 想 去 建 立 和 成 長 成 一 家 真 正 的 企 業 嗎? 本 研 究 目 的 乃 促 進 產 業 政 府 和 學 術 的 合 作 去 創 造 網 路 2.0 商 業 模 式 的 平 台, 此 平 台 是 為 了 讓 服 務 產 業 譬 如 旅 遊 業 與 線 上 遊 戲 產 業 能 迅 速 加 入 商 業 模 式 2.0 聯 盟 去 快 速 反 應 全 球 趨 勢 和 web 2.0 的 廣 大 商 機 此 外, 此 平 台 能 為 其 它 服 務 產 業 促 進 更 多 商 機, 譬 如 航 空 業 交 通 運 輸 旅 館 餐 飲 和 資 訊 通 訊 科 技 產 業 等 等, 以 形 成 經 濟 規 模 甚 至 經 由 這 個 商 業 模 式 2.0 平 台 輸 出 到 全 世 界 本 文 呈 現 一 個 理 論 背 景 與 實 務 的 途 徑 去 設 計 可 實 行 的 商 業 模 式 2.0, 用 網 路 2.0 為 網 路 資 訊 服 務 產 業 創 造 真 正 商 業 價 值, 此 模 式 以 四 個 相 互 關 聯 的 觀 點 提 供 一 個 商 業 模 式 上 的 整 體 觀 : 例 如, 服 務 科 技 組 織 與 財 務 它 詳 盡 計 劃 在 關 鍵 設 計 議 題, 這 最 終 形 成 此 商 業 模 式 與 驅 動 它 的 可 行 性 關 鍵 詞 : 商 業 模 式 2.0 網 路 2.0 商 業 價 值 商 業 平 台 網 路 資 訊 服 務 ( * 聯 絡 人 :phd2003@gmail.com)