Web 2.0: Cashing in

by Stacy Cowley

March 24, 2006 —

Startups -- and the money men who fund them -- are looking to cash in on Web 2.0.

The concept is amorphous but the hype around it is huge, and entrepreneurs running new ventures are quick to explain how their technology amplifies or exploits the benefits of Web 2.0 principles.

"We see ourselves acting as a bridge, between the idea of harnessing word of mouth -- one of the 'clouds' in Web 2.0 that we focus on -- and helping companies build a real business around that," says Sam Decker, the vice president of marketing and products at Bazaarvoice Inc. in Austin, Texas. Launched in January with US$4 million in venture-capital backing, Bazaarvoice is developing a hosted application to help businesses build buzz around products by capturing the Internet version of "word of mouth." The company's software will let customers share notes on specific attributes of retail merchandise and will help clients mine data from that user feedback.

Bazaarvoice sees itself as part of the social Web phenomenon, an essential element in the Web 2.0 vision. From the user perspective, the social-technology evolution "is really an extension of the concept of Web 'communities' that came up in the 90s," Decker says.

Web 2.0 companies (and companies that aspire to be seen as such) are also experimenting with new models for software pricing, development and deployment. Open-source and hosted, "on demand" software projects continue to fascinate investors. European venture-capital firm Index Ventures is backing open-source developers Pentaho Corp., which makes business-intelligence applications, and Sugar CRM, which offers sales management software. Both companies allow users to download most of their code for free. "Using the Net as a delivery mechanism for software solutions is on the rise," says Bernard Dall

IDG News Service