24 December 2006

Web 2.0 puts production in hands of many but rewards in hands of few

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Web 2.0
“Web 2.0, by putting the means of production into the hands of the masses but withholding from those same masses any ownership over the product of their work, provides an incredibly efficient mechanism to harvest the economic value of the free labor provided by the very many and concentrate it into the hands of the very few,” argues business writer Nicholas Carr in his blog.

“Richard MacManus’s new analysis of web traffic patterns helps illustrate the point. Despite the explosion of web content, spurred in large part by the reduction in the cost of producing and consuming that content, web traffic appears to be growing more concentrated in a few sites, not less. Using data from Compete, MacManus shows that the top ten sites accounted for 40% of total internet page views in November 2006, up from 31% in November 2001, a 29% increase. The greater concentration comes during a period when the number of domains on the web nearly doubled, from 2.9 million to 5.1 million.”

“One of the fundamental economic characteristics of Web 2.0 is the distribution of production into the hands of the many and the concentration of the economic rewards into the hands of the few. It’s a sharecropping system, but the sharecroppers are generally happy because their interest lies in self-expression or socializing, not in making money, and, besides, the economic value of each of their individual contributions is trivial. It’s only by aggregating those contributions on a massive scale – on a web scale – that the business becomes lucrative.”

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(via Marketing & Strategy Innovation Blog)

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