Abstract
Overview
Spurred in large part by the growing ubiquity of broadband, innovation
on the internet has never been healthier. The online giants (Google, Yahoo!,
Microsoft, eBay.....) naturally top the ranks for the most popular flagship
services, and are developing aggregation strategies for new
high-potential services (blogging, VoIP, video, mobile, etc.). Technological
innovation new products and services) is at the very heart of the internet
giants' strategies - all locked in a battle for audience, which has
led to the launch of a host of new services, to increasingly broad (sometimes
too broad!) diversification and to a very active mergers and acquisitions
policy.
Centred around community-centric applications, Web 2.0 has a major hand
in shaping the development of new services, which are generally dominated by
the internet giants. In less than two years, advancing in leaps and bounds Web
2.0 has become an unavoidable reality, enabling the rise of new major
players (MySpace, YouTube, Wikipedia, Facebook.....), while its guiding
principles are gradually shaping all other services and shaking up
internet industry balances (new audience measurement policies, new forms of
web browsing, etc.), as well as the comfortable positions of a few of the
dominant players. The internet giants are also having to contend more and more
with serious rivals from the media and telecom industries.
Monetising internet services is achieved chiefly through advertising.
This model naturally favours the dominant players, and justifies their
unending race to secure audience. The online advertising market is thriving,
benefiting from users' shift from other media (via display) and its capacity
to generate transactions around performance marketing (notably via
search engines). As it stands, however, advertising cannot finance everything,
which makes some players' business models very questionable. A host of
innovations (formats, platforms, segmentation tools) will nevertheless improve
the monetisation capabilities of certain services, while the internet giants
are now focused more on advertising innovations than on innovative
services. The battle between them is being waged over total audience and
advertising monies (rather than over each service) - a battleground which is
now extending beyond the web as they begin to build multi-platform
strategies.
Key questions
- Who are the web' s truly innovative players?
- What are the internet giants' innovation policies?
- How are they optimising audience building?
- What are the top Web 2.0 services?
- How are the internet giants positioning themselves in theWeb 2.0
environment?
- To what extent is Web 2.0 shaking up the internet industry?
- How is the online advertising market evolving?
- Is the ad-based business model viable for all services?
- What role for the internet in multi-platform strategies?
Who should read this report?
- Internet players
- Identify the overriding innovative trends in Web 1.0 and Web 2.0 services
- Assess the development of rival services
- Understand media companies' online initiatives
- Telecom operators (fixed and mobile)
- Understand internet companies' overall innovation strategy (services and
advertising)
- Analyse the opportunities for online monetisation through advertising
- Media companies
- Anticipate the internet giants' migration to multi-plat form strategies
- Identify the major trends in content and service consumption
- Assess online development opportunities
- Equipment suppliers (consumer devices)
- Understand the challenges of online distribution
- Track changes in the service market
- Investors and analysts
- Assess the overall state of competition between the internet giants
- Understand the true potential and the limitations of the Long Tail model
- Analyse the development of Web 2.0 and its monetisation potential
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