Welcome To Web 2.0

June 26, 2006
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GRAND RAPIDS — When it launched earlier this year, Spout.com became West Michigan’s first entry into the growing Web 2.0 collective.

Depending on the point of view, Web 2.0 is either a second generation of services available on the World Wide Web or an annoyingly vague buzzword. There is no textbook definition. Even Tim O’Reilly, the technology author who popularized the term as part of a series of lectures in 2004, has difficulty defining it in 5,000 words or less.

At its simplest, it is nothing more than the name implies: the next generation of the Web. Beyond that, Web 2.0 applications are based entirely online and built around data management. It often implies the use of certain software and development philosophies, such as the interactive Ajax technique, but not always, and should invite participation and collaboration among its users.

Commonly, Web 2.0 is best thought of as any online application that creates a network of people — achieving technologists’ decade-long vision of a living Web — which is then used to provide service and value. Standard bearers include Google, Blogger, MySpace and Wikipedia. Oftentimes, the content is created by users as part of a social networking, online community.

“There are a lot of reasons people go on social networks: shared interests, opportunities to network, knowledge transfer, to find love,” said Spout COO Bill Holsinger-Robinson. “It’s all about making connections — having access to people you wouldn’t have otherwise.”

Spout is an online community for film lovers. Like all Web 2.0 companies, its core service is easily defined: Spout introduces its users to film through the opinions of other users. It uses “tag clouds,” a keyword architecture defined by user input. If a user is looking for a film similar to “Ferris Bueller’s Day Off,” he or she can click on any of the dozen tags attached to that film, such as “high school,” which will then bring up a long list of films that users associate with high school. A second method of searching films is by browsing the favorites list of other users.

As widely reported in West Michigan, Spout is the brainchild of CEO Rick DeVos, the eldest son of gubernatorial candidate and Alticor heir Dick DeVos, and of cofounders Daryn Kuipers, Dave DeBoer and Paul Moore. As the story goes, the quartet of passionate film fans launched the site as an alternative to the Hollywood distribution model.

“Spout was really born out of this dilemma that filmmakers are in,” said Holsinger-Robinson. “You go to film festivals and see these wonderful films. But if they don’t get picked up for distribution, they will languish and die.”

As the company’s COO explained, the festival circuit is filled with films that never see theatrical release. Only a handful will even make it onto a shelf at Blockbuster Videos. As technology advances, it becomes increasingly affordable to make a film, even a good one; yet distribution is no more accessible.

Although it does sell DVDs on its site, Spout’s current format does not address the distribution problem. Instead, it attacks the larger issue: Hollywood will only distribute films it is confidently able to market.

“Hollywood works on an attention-grabbing model,” Holsinger-Robinson said. “It’s about studio execs deciding what we’d like. But it doesn’t have to be that way.”

The same scenario exists on the shelves of Blockbuster and Wal-Mart, as the offerings of both lean heavily toward the most marketable films.

“When you walk the wall at Blockbuster, you’ll see 40 copies of “Mission Impossible III” because that’s what you’re supposed to like,” Holsinger-Robinson said. “Our service is primarily to help filmmakers market their films.”

The idea is that good, unknown films inspire evangelists who will tell everyone they can about them. These are people like DeVos and his friends, who care about film and want other people to, too.

“We want to provide the one thing that is becoming a scarcer and scarcer commodity in today’s world,” Holsinger-Robinson said. “Anyone can create content. We want to provide attention.”

As Yang Kim, principal of BBK Studio in Grand Rapids explained, there is a new psychology at work online that the general market is only beginning to understand.

“There are people who play on these sites all day and just like to build lists of things,” she said. “There are people who will commit a huge chunk of time to their online identity.”

Spout.com was created in partnership with BBK Studio and Grand Rapids firm NuSoft Solutions at an estimated cost of $1 million to $2 million. In this respect, Spout is an example of what is believed to be a side effect of the Web 2.0 generation — renewed investor interest in online ventures.

Spout’s only revenue source is DVD sales. Of its third-party 280,000-film library, roughly 40,000 are available for purchase at prices comparable to Amazon.com, also through a third-party vendor. But as DeVos and Holsinger-Robinson emphasized, the company wasn’t launched to sell DVDs.

“There is no denying we’re a young company making our way,” DeVos said. “Sales are important, but they won’t be the be-all and end-all down the road.”

“The important thing is building the community,” Holsinger-Robinson said.

Film school graduate and Structure Interactive Director of Creative Services Charlie McGrath watched the Spout launch with interest.

“It’s a throwback,” he said. “I like the enthusiasm of the group, from the standpoint of the old dot-com model of ‘We’ll come up with a cool idea and worry about making money later.’”

McGrath is weary of the Web 2.0 label that Spout so willingly carries. At this point, he argues, its overuse is ruining it as a label, only capturing the exuberance of the dot-com boom.

“This is inevitable when you have something fuzzy and undefined,” said Carl Erickson, CEO of local agile software development firm Atomic Object LLC. “It’s certainly more than a buzzword.”

Erickson believes the underlying principles of Web 2.0 will drive innovation in the near future, but because it is likely to be developers doing so, the business model may not be immediately evident.

This was the case with most of the Web 2.0 staples, as most launched as side ventures.

Daniel Woolston, a NuSoft Solutions engineer and author of Pro Ajax and the Net 2.0 Framework, noted some of the most successful Web 2.0 companies, such as MySpace and photo site Flickr, had questionable business models, but were acquired by News Corp. and Yahoo!, respectively.

“It’s the power of attention,” he said. “Once you get a certain number of eyeballs, the value is in the community itself.”

McGrath questions that model, stating deals such as the $580 million MySpace acquisition to be “an aberration, not a trend.”

NuSoft President Keith Brophy believes the real value of online communities is yet undiscovered, but sees an opportunity in business intelligence.

“Individuals are sharing themselves and all this information is being categorized. It opens up some new paradigms,” he said. “So far, we’ve only seen the individual experience, but what I think we’re starting to see with Spout, and others like it, is the wrapping of business benefits with it.”   

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