Great time to be a netizen

Are you a netizen? Sure you are! You’re here now, aren’t you? The internet today sure isn’t what it used to be ten years ago. Heck, it isn’t what it used to be five years ago. This post is mostly about what’s happened to the web over the last three to four years—and this past year in particular.

After the burst of the dot-com bubble, it became obvious that without a business model, the web was useless. And so, up until the last four to five years, businesses have pushed the limits as far as they could possibly stretch them into the land of “Barely Business.” Flickr, Twitter, del.icio.us, Facebook…when they launched, none of them had any plan for making any kind of money. Since then, they’ve been bought for one reason or another, released ads, or provided a for-pay version of their service. Twitter still has no clear plan for making money.

The last three or four years have been rough, though, especially for startups and one-man-shows. Take Ma.gnolia, for instance. A fairly successful website started and run on Mac Mini computers. Talk about low budget. Unfortunately for Ma.gnolia, low-budget operation also meant low-quality backups (which eventually led to the destruction of the site). Despite the web having the lowest startup costs ever seen, we’ve also entered into an era where the stakes are the highest as well. Ideas are drying up, and with it is the VC money. In 2003, a good idea was worth millions. In 2009, good ideas are a dime a dozen.

Some of this is due to over-population of certain marketplaces (remember the time when there were literally hundreds of to-do list sites?). Another good chunk of this is partly due to the recession: consumers are a lot more hesitant to press the “buy now” button. No, I shouldn’t say that. A lot of consumers are willing to pay good money for a good product, but they aren’t willing to pay for something that they can get for free elsewhere.

But I’m getting off track: this post is about netizens, not web 2.0 companies. How does this web 2.0 crunch affect the consumer? Wouldn’t this be a bad thing? Actually, no. As times get tougher and businesses are forced to be more creative or die off, innovation flows like the Nile. Take the company I’m interning for, Widgetbox. Like many other “freemium” sites, Widgetbox allows you to create basic widgets for free (something they’ve done for quite a while), but has invented new and exciting features for users that wish to get more out of the service. They’re releasing new “Pro”-line widgets that continue to add value to the premium subscriptions. And from what I understand, they’re going to offer a business-class account level for medium to large companies that want to use widgets as powerful customer engagement tools.

Another company, Vimeo, is going to be limiting source file availability for basic customers. Is this a good thing? I’d say so. Obviously this will help extend the life of Vimeo (as it generates new revenue), though it doesn’t take away any major functionality. I consider Vimeo a YouTube competitor of sorts (kind of the deviantart of video), and it does a great job. I don’t (and I would imagine that a lot of other people don’t) use the service for source file access. Taking this and turning it around to make it a for-pay service after a reasonable amount of time has passed is innovation at its best: as a consumer, I’d be happy to pay the source file tax.

So this indeed good for the consumer: businesses are competing for your interest: your attention and your clicks. The businesses that aren’t able to scale and die off will be replaced by the services that can scale. It’s survival of the most innovative and the netizen is at the heart of it all.