Social Community Sites as the Trend in Web 2.0. How to Beat the Competition

Master's Thesis, 2009

82 Pages, Grade: 1,5






1. Introduction
1.1 Objectives
1.2 Methodology

2. What means Web 2.0?
2.1 Definition
2.2 Development
2.3 Internet Usage
2.4 Main Tools
2.4.1 User generated content
2.4.2 Blogs
2.4.3 Podcasting
2.4.4 Wikis
2.4.5 Tagging
2.4.6 RSS Feeds
2.4.7 Mashups
2.4.8 Social Bookmarking
2.4.9 Crowdsourcing
2.5 Effects
2.5.1 Social Effects
2.5.2 Economic Effects
2.5.3 Technological Effects
2.6 Problems
2.6.1 Copy Rights
2.6.2 Personal Rights
2.6.3 Data Protection

3. What are Social Community Sites?
3.1 Social Interactions in General
3.1.1 Social Contacts
3.1.2 Social Ties
3.1.3 Social Groups
3.1.4 Social Communities
3.1.5 Social Networks
3.2 Social Community offline
3.3 Social Community online
3.3.1 Average Members
3.3.2 Geographic Communities
3.3.3 Topic Communities
3.3.4 Demographic Communities
3.3.5 Business Communities

4. How are Social Communities organised?
4.1 Community Purpose
4.2 Community Structure
4.2.1 User Profile
4.2.2 Member Contacts
4.2.3 New Contacts
4.2.4 Profile Quality
4.2.5 Environment
4.3 Attracting new Members
4.4 User Participation
4.5 Social Interactions
4.6 Connectivity
4.7 Chances and Risks for Providers

5. How is the Competitive Environment structured?
5.1 Competitors
5.2 Analysis
5.2.1 Five Competitive Forces
5.2.2 PEST-Analysis
5.2.3 Outcome

6. What are the Factors of Success?
6.1 Sectoral Factors
6.1.1 Market Entry and Level of Innovation
6.1.2 Space for Further Development
6.1.3 Maslow´s Hierarchy of Needs
6.2 Company specific Factors
6.2.1 Number of Users
6.2.2 Objective and Vision
6.2.3 Participation and Activity
6.2.4 Content
6.2.5 Usability and Design
6.3 Technological Factors
6.3.1 User data base
6.3.2 Tracking and Reporting

7. What are applicable Business Models?
7.1 Definition of a Business Model
7.2 Web-based Business Models
7.2.1 Overview
7.2.2 Effect of Web 2.0
7.2.3 Revenue Resources for Social Communities

8. Recommendations
8.1 Set clear Puporses and Objectives
8.2 Enable Growth and technical Development
8.3 Attract and Retain Members
8.4 Utilise several Revenue Resources



Since a few years, many people talk about web 2.0 without knowing exactly what it is. It is not a new web standard, no new innovative product of Apple, no net movement or revolution. In fact, it is a paraphrase for the new active role of users.

The technological progress makes it possible that users participate in internet actively. Their role changed from a watching to a creating one. New tools and features enabled users to generate content.

With other new websites, social community websites came up using these new possibilities. By now, social communities like Facebook or studiVz have millions of members. The huge acceptance on users’ side made those websites a real trend in web 2.0.

The huge number of users makes social communities to an interesting business. Experts say that social communities are not only a trend, but also an important business in future.

Although there are already some established companies acting on the market for social communities, the market will see a lot of new social communities in the next years. There are only a few general social communities dividing up the market. And there are enough topics which are not occupied as yet.

Only those social communities will beat the competition and will remain, which are able to generate revenue and profit.


Figure 1: What is Web 2.0? (source: Tim O`Reilly)

Figure 2: The three main components of web 2.0

Figure 3: Meme map of Web 2.0

Figure 4: Usage of computers and internet in private housholds in Germany ..

Figure 5: Usage of computers and internet in companies in Germany

Figure 6: Use of web 2.0 applications (derived from BITKOM/Techconsult)

Figure 7: The world of internet

Figure 8: Global Internet Data (derived from

Figure 9: Maslow’s hierarchy of needs

Figure 10: Social Ties according to N. Döring

Figure 11: Usage frequency of social communities/networks with own identity

Figure 12: Activities in social communities/networks

Figure 13: Visits of social communities/networks

Figure 14: Homepage of

Figure 15: Homepage of the Community

Figure 16: Homepage of

Figure 17: Homepage of

Figure 18: user statistic

Figure 19: start page

Figure 20: invitation form

Figure 21: Common things

Figure 22: MySpace registration form in German language

Figure 23: MySpace Today-category in German language

Figure 24: Facebook start page graphic in German language

Figure 25: Facebook registration form in German language

Figure 26: YouTube registration form

Figure 27: YouTube start page

Figure 28: YouTube news category on the start page

Figure 29: studiVZ registration form

Figure 30: studiVZ start page

Figure 31: XING registration form

Figure 32: The five competitive forces on the social community market

Figure 33: PEST-Analysis

Figure 34: Maslow’s needs adapted to online social communities

Figure 35: Internet business models based in the 4-C model

Figure 36: Types of revenue

Figure 37: Revenue resources of a social community

Figure 38: Banner ad on the MySpace homepage

Figure 39: Facebook mailbox of a female member

Figure 40: XING BestOffers category 73

* These figures have been removed before publication for copyright reasons.

1. Introduction

1.1 Objectives

At the beginning, this master thesis describes what web 2.0 means. It gives an overview of typical web 2.0 features and their effects and problems.

Then it provides a closer look to social community websites. As a part of the web 2.0 world, they use all the typical features and they enhance users’ participation. That makes them to typical web 2.0 websites. It is shown how they are structured and what the core elements are. Also sociological aspects are discussed, because social community websites attracted millions of users in a short period. It is interesting to see what makes them so attractive.

Now, there are a lot of social community websites on the market. The most important ones worldwide and for the German market are picked out for a market analysis. The result helps to see clear what the important factors of success are.

Many social communities have no definite concept of how to generate revenue and profit. The internet business offers a wide range of business models. This master thesis demonstrates which models are applicable and gives some examples for a successful practice. It can help to be on target for revenue generating from the beginning on.

As a guideline, there are given recommendations that help to succeed.

1.2 Methodology

First, it was important to find out what web 2.0 is and how it developed. In economics literature, but also in newspapers and magazines there are a lot of sources. These sources provide a deep insight in this topic and allows a good approach to the topic.

This was the basis to understand how social communities are structured and what makes the attractiveness for users. There is a lot of economics literature giving an insight into the functionalities of social communities. A look at established communities allowed to see how social communities work in practice. Furthermore it was the basis for a market analysis. For an analysis it was important to choose the most popular social communities worldwide. To get a overview of the German market, two German social communities were chosen additionally. Choosing popular social communities will allow to see how market forces influence the social community business. Furthermore, there are more sources of information. With this analysis it is possible to identify the factor of success.

In a next step, it was analysed how to make money with a social community. Many people do not see a direct conjunction between a social community and generating revenue. To find out how this works, it is first given an overview of the typical internet business models. Then, it was analysed which models are applicable for social communities.

Finally, all the finding were subsumed to see which factors are essential for building up and operating a social community, and for succeeding.

2. What means Web 2.0?

Professionals often invent terms to describe new ideas. This neologism is used to point out that it is something really new needing a new term. Often, outsiders and sometimes also insiders are not able to interpret these new terms in the right way.

“Web 2.0” is such a term creating some uncertainty in people’s mind. The literature produced a huge amount of explanation attempts. Apparently, there is a big demand for explanations what might be an argument for the existance of an uncertainty.

2.1 Definition

In 2004, “web 2.0” was first spoken during a brainstorming session between O’Reilly and MediaLive International. In this initial brainstorming, there were examples formulated illustrating the sense of web 2.0. The examples listed in the following point out the differences between web 2.0 and the conventional comprehension of internet.1

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Figure 1: What is Web 2.0? (source: Tim O`Reilly)

Surely, this list is expandable. It shows that the term “web 2.0” does not

describe a new internet technology. In fact, it is a paradigm for creating new applications based on well known and further developed internet technologies. As per Tim O’Reilly, there are in particular seven points characterising this paradigm:

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Figure 2: The three main components of web 2.0

Whatever, both approaches are not far away from each other. Web 2.0 sets the human being in the centre. The internet user 2.0 is not only a surfer receiving and consuming data or information. This was the role of an internet user in the nineties. The internet user 2.0 is creating and adding data and information. He is writing a web diary, providing his knowledge in online encyclopaedias, and offering his bookmarks to other internet users. He is no longer an isolated individual in front of his computer. The term “web 2.0” is to symbolise the change from a passive to an active role - from web 1.0 to the higher evolutionary level of web 2.0.

The internet user 2.0 does not need any special knowledge of programming to publish text, photos, and videos. In the nineties, it was necessary to use a programming language like html to publish a text. The average user does not have this knowledge. So, a big majority was not able to engage active in the internet. They were the audience looking at the content created by some experts. New combinations of well known technologies and further developments make it possible to offer the internet user a more active role.3

And the user wants to be active. The number of articles in blogs is increasing every minute, users fill in personal profiles on network websites, and evaluate products in internet shops. All this creates content generated by users. Many websites are very succesful by using web 2.0 tools like blogs, personal profiles, and product evaluations. Users seem to be thankful to be an active creating part, and they seem to have only one real requirement: The website needs an elaborate user guidance that provides an easy navigation. Then, more and more users will participate, more and more content will be generated, and finally the offered service will get better and better. All users bring their knowledge together and hoard up a huge treasure. And the slogan “together we are strong” is not the only one. The other one could be: The result is not only the sum of all input, it is exponentiated. Surely, wikipedia is a prime example for collective intelligence. The business columnist James Surowiecki call it “the wisdom of crowds”.4 Wikipedia is strong, because a lot of people put in a little peace of information. The result is a huge lexicon that always is improved by new articles of its users.

This is a process that never stops, because users will always add some new knowledge. So, there will be a continuous further development. A standstill is impossible.

With web 2.0 the users start to dominate the internet. It is no longer a network of computers, it is now a people’s network. The direct communication between user is much easier today than years before.

Networking sites like XING or MySpace simplify the direct contact. E-Mail, Weblog, Flickr-Page and bookmarks are always and everywhere available. It does not matter which computer is ready to use, the computer in the office, the laptop at home or the old battered computer in an internetcafe at the end of the world.

Software installed on computers and paid by every single user is no longer an idea that is in line with web 2.0. More and more software is shifted to the internet. For example, the web-based freemail service GoogleMail offers more and better functions than the computer-based software Outlook. Web- based word processing programms enable the access to documents wheresoever. Furthermore, it allows the collaboration of several users working with the same document at different places. So, the internet is not only a conglomeration of websites, it is now a real platform. A lot of users have already identified this new idea of internet, many many users will follow.

And web 2.0 is not only an idea created for computers. Websites and applications are more and more available via mobile appliances like mobile phones, mp3-players or pocket pc’s. For example, with an iPhone it is possible to read and send E-mails. For people living web 2.0 this idea is not fixed with a computer, it is an idea influencing the whole communication.

Changes are not only on users side. Even companies have to react on the new requirements and conditions web 2.0 is bringing about. Active user create a lot of information and data. All the content generated by users, all the knowledge provided, all the personal profiles, all the combined applications are producing a mass of data. So, it is very important that web 2.0 companies have competencies in database management. Without the data, all web 2.0 tools are useless, without software, the data is unmanageable.5

Tim O’Reilly has visualised all these things that form web 2.0 in a meme map. This map shows all important points at a glance. So, it is suited to make all things discussed above more clear.

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Figure 3: Meme map of Web 2.06

It visualises the idea of web 2.0. So, it is easy to understand what is real new or different about web 2.0. It “names a set of principles and practices that tie together a veritable solar system of sites that demonstrate some or all of those principles, at a varying distance from that core.”7

2.2 Development

Our society is in a transition from an industrial society to a knowledge society. Characteristic for this change is the growing importance of intangible goods and services, the growing number of people in information oriented functions, the exploding information flood in the internet, and the new communication modes and habits in our private as well as in our business life.

Over the past ten years, the internet heavily changed the organisation and structure of production, trade, services, and administration. Even the information grabbing and the communication for avarage people changed a lot. Formerly, people used to buy newspaper or watch the latest news on TV. Today, all news are available in the internet very fast and mostly for free. Formerly, people used to write postcards or letters. Today, the easiest and cost-saving way to send a written message is writing an E-mail.

The easy handling of the world wide web lead to a mass phenomenon. In industrial countries like Germany, more than 60 percent of the population is online and using the internet reasonably regular.8 Worldwide, almost 20 percent of the world population is online.9 This huge interest made it possible to create more and more services and offers in the internet. Now, the internet is an important component of our information and communication infrastructure. The access became natural and essential for people in industrial countries. So, in industrial countries the digital divide is not a matter of access to the internet. Under the prevailing circumstances internet is available for everyone. It is more a knowledge and education divide. People need the capabilities to use the internet and its new applications.

During the last years, internet changed the modality of information handling and knowledge. This change goes through all social groups. It is not yet completed, but it is a permanent process of innovation. The term web 2.0 is very popular right now. That is why it draws so much of the publics attention to that permanent process.

Before, the internet had a very steep role allocation: the active part was for the website providers, the passive part was for the consumer. Now, web 2.0 changed that allocation. Web 2.0 make the active participation for consumers possible. All consumers can become producers, creators, and providers. Web 2.0 develops new possibilities for networking, grouping, content generating, opening up and administrating information and knowledge, and self-portrayal. In the meantime, the use of typical web 2.0 tools is competely normal in everyday life for many people.

At the beginning, the term web 2.0 was associated with websites for the exchange of photos and videos like YouTube. Today, many companies are using these tools for marketing, sales, and public relation activities. For example Pedigree, the dog food brand of Mars Inc., has launched a own dog community, where dog owners can set up a profile for their dogs and themselves. They can exchange experiences, grab information, or just publish the latest photos of their sweeties.

A closer look at the music industry points out that web 2.0 was able to change the whole industry in a very short period. File sharing networks, the iPod, and the connection between software, hardware and internet changed usage patterns of music fans completely. Only a few years ago, the music industry seemed to be the only branch without a real internet sales strategy. Today, the music industry adjusted to the digital world better than other branches.

And the publishing industry could be the next branch which is forced to a change. Buying a newspaper at the kiosk is for less and less people a typical behaviour. All publishers are fighting against decreasing editions. News are availble in the internet. More and more people read the news on websites like or Those news websites has a increasing number of users. A rate of increase of about 40 percent in comparison to the last year seems to be the standard.10 A closer look at the age group of people between twenty and thirtynine years reveals that 51 percent of them use the internet as the main information source.11

The current development is driven by the enormous pace of innovation. This pace is due to the broad band internet access and to the cheap and high performance mobile devices. Furthermore, the internet handling is very easy. All this lead to a change in usage patterns. It is possible to see this by observing young kids growing up with internet. They show completely other patterns than the generation before. And the change of patterns will not stop. Another faster internet access, devices with a still higher performance, and other further developments will push on the development more and more. Possibilities and resources are not exhausted. The start of the internet as a mass phenomenon is just ten years ago. Internet is still in the fledging stages in comparison to the first ten years of the car manufacturing industry for example.

The new active role of users implicate some responsibility, too. A user who generates blogs, profiles, or articles, is responsible for its content. The idea of web 2.0 can only perform well, if every user cultivates it. An online lexicon like wikipedia only makes sense, if all users provide serious information of a certain quality. A discussion in a group on the business community XING may not end in obscenities and wiggings. Very often, this responsibility is not assumed. Bernd Graff describes and criticises in his article “Die neuen Idiotae, Web 0.0“ for the Sueddeutsche Zeitung12 the brutalisation of the internet and the low demands for knowledge and information. He is asking for more responsibility. Since the user has an active role, the mediocrity governs the internet. That is his point of few and it have to be admitted that he is not basically wrong. But his view is an extreme one. Just as the opinion that everything is perfect. The truth is somewhere in the mean. The longer people act in this new active role the more they will change their behaviour. Acting right in a web 2.0 surrounding is a learning process.

For some people web 2.0 is already outmoded. Web 3.0 seems to be the further development and the new trend. And what means web 3.0? Web 2.0 creates a lot of data. Many people upload new videos on YouTube or new photos on Flickr. The mass of data makes it harder and harder to find the right information. The so-called “semantic web” tries to make this jungle more clear by using tags and metatags. With metatags a video or photo can be described more precise. A photo of the city Berlin can be linked with the tag “Berlin”. Metatags like “german”, “city” or “capital” give additional information and help to structure data. These metatags are in the centre of the research in the field of the semantic web. Robert Tolksdorf gives in his article “Web 3.0 - die Dimension der Zukunft” for the Tagesspiegel13 a very understandable explanation. He is calling the combination of web 2.0 with semantic information web 3.0.

So, specialists are already working on further developments. There will be no stagnancy. For sure, it is exciting to see the further development and its effects to the society.

2.3 Internet Usage

Germany is on its way to a digital society. The new medias are playing an important role by now. The data collected and analysed by the federal statistical office demonstrate that.

In 73 percent of all households in Germany there are computers available (e.g. PC, laptop or palmtop). More than 64 percent have an access to the internet.14 About 70 percent of the german population used the internet minimum once within the last three month.15 More than 60 percent uses the internet daily or almost daily.16

It is very interesting to see that the usage differs in the various age groups.

97 percent of the population aged between ten and twentyfour years old use the internet.17 This gives a hint to the future development. The relevance of the internet will still increase.

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Figure 4: Usage of computers and internet in private housholds in Germany

Not only in private households, but also in companies computer and internet are playing an important role. In 82 percent of all companies in Germany there are computers available.18 More than 77 percent have an access to the internet.19 48 percent of the employees are using a computer with internet access more often than once a week.20

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Figure 5: Usage of computers and internet in companies in Germany

These data show that internet is used by a majority in Germany. This is the reason why it has such a big effect on communication patterns and the society as a whole.

Now, it is important to have a look at the way of using the internet. Is a traditional more passive role dominant or do the users accept the more active part? This would take effect on the acceptance of web 2.0, because it requires an active user.

A survey of BITKOM shows some interesting results.21 For this survey, people aged ten and older living in a household with internet access were asked about their usage of web 2.0 applications. More than 15 million Germans use websites like Facebook to upload and place own photographies. About 12 million Germans participate in discussion forums. About 1.5 million people are writing an own blog, and 12 million are using IP telephony. Instant messaging is a communication style which is used by almost 20 million people.

Besides these numbers, the survey shows that more males are using web 2.0 tools than women. A closer look at the age groups presents the group aged between ten and seventeen as heavy users of instant messaging. Almost 90 percent of this age group communicate via messengers.

Figure 6: Use of web 2.0 applications

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In other industrial countries these numbers are similar to those in Germany. Here are some key figures of selected countries:

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Figure 7: The world of internet22

A global sight on internet key figures shows that an average user has 35 internet sessions per month and he is visiting 68 domains monthly. In average, he is more than 33 hours in front of his PC every month. These are data provided by The Nielsen Company.23

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Figure 8: Global Internet Data (derived from

So, in average a person is more than one hour a day working with his PC, and every day he has more than one internet session. These are impressive data, particularly considering that in developing countries like Egypt or Algeria less than 10 percent of the population is online.24

2.4 Main Tools

There are many tools comprising the spirit of web 2.0. Mostly, they are characterised by the active role of users. That is what makes web 2.0 a new idea of internet. Below, there are listed the most important web 2.0 tools. The list is not complete, and perhaps in a few weeks or month there will be a new tool. But the tools described below show what web 2.0 means in practice.

2.4.1 User generated content

User generated content stands for content which generated by users. It is not provided by the website operator as we know it before. For example, users are generating profiles with personal data. Then other users can look at and possibly contact this user.

The idea of content generated by users is the basic tool of web 2.0. Often, the term is used as a generic term for all web 2.0 tools.

2.4.2 Blogs

A blog or weblog is a diary or logbook. The term is composed of the words “world wide web” and “logbook”. Blogs are very popular. Users writing a blog are called blogger.

Often, blogs are used as a public diary or a travel report. In a blog the user can notify his opinion, write about his experiences and events. Links to other blogs or other sources of information usually are placed in a blog. Even every blog has its own URL. So, it is possible for other bloggers to integrate links to other blogs and creating a network. It is typical for blogs that other users are encouraged to write comments then. The more comments and the more links there are, the more information and the more knowledge is available in such a blog.

If a user wants to write a blog, he can start it on his own website by using a weblog software or use a weblog service provided by websites like or

2.4.3 Podcasting

Podcasting is a neologism of the name for the popular mp3-player “iPod” and the word “broadcasting“. It means the providing and publishing of audio files in the internet, and the download of those reports. The user providing those files is called the podcaster. The user downloading those files is called the podder.

Users can find the podcasts in podcast lists like or, start the download of the audio files there and save them on the computer. Then they can watch them on their PC or iPod or other adequate appliances. So, podcasts are the new radio stations of the web 2.0 era.

In Germany, more than 5,000 podcaster report regularly about various topics. The technique is easy to handle.

2.4.4 Wikis

The word wiki has its origin in the hawaiian language. There it means fast. “Wiki is a piece of server software that allows users to freely create and edit web page content by using any web browser. Wiki supports hyperlinks and has a simple text syntax for creating new pages and crosslinks between internal pages on the fly.”25 That is a definition from a technical point of view.

From a users angle, a wiki is a website whose content is generated by several users. It is always possible to edit and change this content very fast and easily. The users do not need any special knowledge of programming. The worldwide largest wiki is Wikipedia.

Typical for wikis is the up-to-date content and the links to further information, technical literature, and other special websites offering specialised knowledge. It is a handicap of wikis that the content sometimes impart wrong knowledge and imprecise information.

2.4.5 Tagging

Web 2.0 creates a lot of information. Everyday there are new podcasts, new blogs, new wikis, and other user generated content offering information. Often, information are not structured. It is like a jungle and it is easy to lose oneself in this information mass.

Keywords are used to make it easier to find certain information. Those keywords refer to certain words which are enclosed in certain information. That means that information is not found which does not contain this certain keyword, even if there is a very close correlation.

Tags are a typical further development of the web 2.0 era. With tags it is possible to describe an information without the need that the word itself is contained in that information.

Tagging means that a user generated a blog or a podcast additionally generated some tags to describe his content.26 The aim is that these tags should make is easier to find the content. The more tags there are for a certain article, the higher is the possibility that this article is found when another user is looking for this information. This procedure is called tagging.

2.4.6 RSS Feeds

RSS is an acronym and stands for „Really Simple Syndication“. With RSS it is possible to post articles or news on the internet, to distribute them, or to change them with articles and news of other websites. It is used to syndicate news and other content.

A RSS file, also called RSS Feed, is a file based on text. This file consists of a list of items. Furthermore, a RSS Feed consists of a title, a summary, and a link to the website where the whole article or new can be found. And there can be more items like the name of the author or the date, for example.27

From a website publisher’s point of view, RSS Feeds provide the possibilty to integrate directly articles and news of other websites on the own website. So, it is a content delivery vehicle. It is possible to provide the latest information and keep the users updated. Even if the users do not come back to the website regularly, with RSS Feeds he is always well informed and will come back if a headline attracted his attention.

From a user’s point of view, it is a perfect tool to gather information. With a RSS Reader it is possible to get them on the desktop. It is possible to download and install them on the desktop. So, the user will always get the latest information without surfing on dozens of different websites. It helps to find the way through the information jungle and to be updated. And of course, it is a great time saver.

Possibly, emails could deliver the latest news, too. But the in-box is full with spam. It is time-consuming to separate “good” emails from “bad” emails. “People no longer want to give out their email addresses as they know they are going to receive more junk mail.”28 RSS Feeds are easier to handle.

That is why the tool is very successful. Even very popular websites like or are providing RSS Feeds for their audience. This may be an indicator for the popularity of the tool.

2.4.7 Mashups

Also mashups are part of the more interactive web and an important tool of web 2.0. A mashup is a web page or application that integrates complementary elements from other sources. By combining various elements it is possible to create new services.

On the IBM website there is the following definition published: “Mashups are an exiting genre of interactive Web applications that draw upon content retrieved from external data sources to create entirely new and innovative services. They are a hallmark of the second generation of Web applications informally known as Web 2.0.”29

For example, it is possible to combine the service of Google Maps with additional information about real estate displayed for sale. This could be an reasonable service for real estate websites. Then, prospective buyers could see where the flat is located. The combination of a map with flats or houses displayed for sale creates a plus of information and a new service.

2.4.8 Social Bookmarking

Usually, the term bookmark means the browser bookmarks which help to find again the user’s most favourite websites. It is an application connected with the browser used on a certain PC.

Social bookmarks are bookmarks which can be set worldwide by many users, commentated, and which are available from all over the world. The social bookmarks are saved on the servers of social bookmarks service provider like Mister Wong ( They can be open to every user or just for the special user who set the bookmark.

When setting a social bookmark it is possible to comment it with keywords and tags. So, other users may find it easier. By setting social bookmarks a user is sharing his information and knowledge with others. That makes information and knowledge faster and easier available.

2.4.9 Crowdsourcing

Crowdsourcing is another typical tool of the web 2.0 era. It is a neologism and stands for the trend of outsourcing a company’s tasks to internet users. These users work on tasks in their spare time and they do it for free. Often, there are no companies involved in a crowdsourcing process. The internet community just gives the impuls for a further development. The results often are free and available for everybody.30

Companies are using the internet as a platform to work on tasks with volunteers. The benefits for a company are clear. This process is cost saving. Furthermore, the community is much more intelligent than a single employee. Problems are solved faster. Companies profit by “the wisdom of the crowds”. Even small companies without a department for research and development are now able to develop new products and services very fast.

Companies appeal for participation in testing a new website, service or software. Mostly, there are a lot of users attending. They are testing and solving problems on their own or by teamworking. As a side effect, the users are developing a certain affinity and emotional relatedness, because they held to create a new product or service.

2.5 Effects

Web 2.0 brought some new tools and a new role for internet users. The today’s internet has changed enormous in comparison to the internet before the web 2.0 hype. All this is described above. But what kind of effects perceive the users. Does it lead to an society change? Does the new idea of internet affect the econony? And what is its influence on technology?

2.5.1 Social Effects

It is obvious that the internet changes. This change affects also the user. The traditional image of a user as a passive consumer is more and more displaced. Nowadays, the user participates in internet. On nearly all websites it is possible to comment an article, to evaluate a product or service. More and more, the users are responsible for content generation. Often, an appilication only works with the support of other users. Collaboration is a web 2.0 principle. Teamwork is essential. Omniscient lone fighters are not required.

Users generating content act as a journalist. Some experts mean that specialists were substituted for amateurs. Every day, there are more than 70,000 new blogs, every day there are published more than 700,000 news blog articles. That is the blogospere that is the triumph of amateurs.31 Others mean that the blogosphere may stimulate and enrich the journalism, but never substitute it.32

From the author’s point of view, the dominance of teamwork and “wisdom of the crowd” implies the problem that the voice of a single specialist is maybe not heard anymore. This can lead to wrong results.

The website wikipedia shows that this is already a problem. A huge mass of information and knowledge is provided on this website. People use it as an encyclopaedia. The mass of information and knowledge pretends that wikipedia offers the right answer for every question. But the content is generated by other users, not by experts. The content can not really considered as trustworthy.

So, information and knowledge is provided by many sources. It is easy to get it. The importance of information search will decrease. The importance of quality and trustworthiness will increase.

2.5.2 Economic Effects

Web 2.0 has also an economic effect. Web 2.0 helped to create some new services. New companies will establish, new employments will result. Companies and consumers have to prepare for these effects.

For example, people can evaluate products and publish their opinion in blogs. By doing so, they influence other consumers. For a consumer, it is easier to find company independent information about certain products and services. He can find the right product easier and faster. For a company, a negative evaluation could affect the sales volume. It is important to be always well informed about the evaluation of own products or services. Only well informed companies are able to react fast to critique. They can use the evaluation as a quality control and for further development. Users are doing the job formerly done by employees. Clever companies will be able to save costs.

Also crowdsourcing will have similar effects. With crowdsourcing companies are saving manpower and costs.33 All this will increase the profit.

The mass of information and knowledge contains not only mainstream information, but also answers to very special questions. These special information and special knowledge causes a need of special products and services. For some companies it is interesting to satisfy those needs. It is a hard job for stationary commerce. The demand for special products is low. To hold them on stock is expensive. To offer them in a store blocks sales floor for other strong demanded products. For internet shop this is a chance. They do not need a store with sales floor. They just need a stock. And by operating worldwide, the sales volume for weak demanded exotic products is even high. Web 2.0 makes niche products very popular. This is called the long tail. Chris Anderson described that in 2004. “What matters is not where customers are, or even how many of them are seeking a particular title, but only that some number of them exist [sic!], anywhere. [...] In a long tail economy, it´s more expensive to evaluate than to release.”34 For the long tail, an easy finding of niche products is essential. Web 2.0 tools like tagging or blogs make this possible. Formerly, shops offered a limited range of products. Customers had to pick out the one which corresponded most to their needs. Nowadays, the customer can pick out the product matching his need hundred percent.

2.5.3 Technological Effects

Web 2.0 is a trend which is driven by technological further developments. These further developments create possibilities for new techological applications and cause the trend of web 2.0. And these new applications have already modified the internet. For sure, it is not an ending process. The further developments stimulate some creativity for other further developments.

For example, with mashups it is possible to assemble different applications from different website on a new website. Hence, it is possible to create new services.35 Or RSS Feeds which can be integrated on other websites as a kind of headlines.36 Two examples showing the technological effects of web 2.0.

2.6 Problems

New tools and new applications bring some new problems about which were formerly unknown. Users are generating content and leaving their mark in the internet. It is possible to upload photos on Flickr or upload videos on YouTube and Sevenload. On social communities like MySpace or studiVZ users can be engaged in social networking and showcase themselves. In blogs and forums it is possible to exchange experiences with others.

Doing everything what is possible without knowing the legal basics, is dangerous. The easy handling of the web 2.0 tools and applications can be deceiving. There are high risks for companies. Competitors often search for violations of legal clauses. Penalties of several thousands or millions of Euro are possible.

Mainly, there are three topics of importance: copy rights, personal rights, and data protection.

2.6.1 Copy Rights

The content of a website, the source code, or the website as a whole can be protected by copy rights.37 Not only websites, but also photos, maps, pieces of music, and texts can be protected by copy rights. The download or upload is an copy process. An unauthorised use is often prosecuted. Every user and every company has to be aware of this. A company is responsible for the content provided on its own website and can be punished as well as the user generated this content.

Disney, Microsoft, and other leading companies in the U.S. appriciate that web 2.0 increases the risk of copy right violations. In October 2007, they founded an alliance. They set common directives, behavioural rules which should avoid disputes about copy right violations among the members of the alliance.38 Unfortunately, Google as the biggest player in web 2.0 era worldwide has nothing to do with it. They declined an involvement. Nevetheless, this procedure shows that there is a serious problem.


1 Tim O’Reilly, What is Web 2.0

2 Knappe/Kracklauer, Verkaufschance Web 2.0, p. 25 et sqq.

3 Corina Lange, WEB 2.0 zum Mitmachen, p. 6

4 cp. James Surowiecki, The Wisdom of Crowds

5 Tim O’Reilly, What is Web 2.0?

6 developed at a brainstorming session during FOO Camp, a conference at O´Reilly Media

7 Tim O’Reilly, What is Web 2.0?

8 Haas/Trump/Gerhards/Klingler, p. 215

9 cp.

10 cp.

11 cp.

12 cp.

13 cp.;art893,2369841

14 Statistisches Bundesamt Deutschland, Private Haushalte in der Informationsgesellschaft, p. 12

15 Statistisches Bundesamt Deutschland, Private Haushalte in der Informationsgesellschaft, p. 16

16 Statistisches Bundesamt Deutschland, Private Haushalte in der Informationsgesellschaft, p. 26

17 Statistisches Bundesamt Deutschland, Statistisches Jahrbuch 2008, p. 116

18 Statistisches Bundesamt Deutschland, Unternehmen und Arbeitsstätten, p. 11

19 Statistisches Bundesamt Deutschland, Unternehmen und Arbeitsstätten, p. 23

20 Statistisches Bundesamt Deutschland, Unternehmen und Arbeitsstätten, p. 24





25 Leuf/Cunningham,

26 cp. M. Butz,

27 cp.



30 cp. Martin/Lessmann/Voss, p. 5


32 Matthias Armborst,

33 cp. above 2.4.9

34 C. Anderson,

35 cp. above 2.4.7

36 cp. above 2.4.6

37 Iris Kirchner-Freis, p. 3


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Social Community Sites as the Trend in Web 2.0. How to Beat the Competition
University of Applied Sciences Essen
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MySpace, YouTube, Xing, studivz, Facebook, social community, social network, web community, online community, strategic management, business model, ecommerce, e-commerce, success factors, strategisches management, erfolgsfaktoren, five competitive forces, PEST, social commerce, usergewinnung, user attraction, revenue resources, erlösquellen, data protection, datenschutz, internet, web, online, meinvz, business community, soziales netzwerk, online netzwerk, tagging, mashup, blog, user generated content
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Alexander Roggenkamp (Author), 2009, Social Community Sites as the Trend in Web 2.0. How to Beat the Competition, Munich, GRIN Verlag,


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