The Financial Times came up with an interesting article this Monday titled “Web 2.0 fails to produce cash” In among the worries of yet another bubble burst we may be forgetting that not every bovine is designed to produce milk.

The kids swarming social networks are looking for acceptance and understanding. They are more trained in ignoring web ads and push marketing noise than the most creative marketers generating noise. As many bloggers have already realized, clicks don’t necessarily mean attention, let alone cash. Successful user retention is a result of measurement, adjustment, and refinement. The web has evolved, but that doesn’t necessarily apply to many of its monetization techniques.

Web 2.0 is also here to stay and evolve, because it is created to fit the needs of its users: focused, aware, conscious users who walk the streets of the web with curiosity and actual problems they need solutions for. The companies who are catching onto the habits of this crowd (37 Signals, Google, Amazon…) are the ones who develop applications to serve the user’s burning needs. The solutions are also scalable - affordable in bite sizes, chunks, packages, boxes, and full truckloads on demand. Problems change, and so do the offerings which shape and evolve with the crowd. Those who forget or become too arrogant to evolve get left behind.

The market for problem-focused web applications is huge and will only get bigger, because we would doubtfully run out of problems… The market of users who click on dancing donkeys in Mortgage ads is shrinking, as these are, needless to say, ads insulting the intelligence of those who can actually afford to pay for a mortgage. Users are smarter than most banner advertising presents them to be.

On the other hand, social networks are soaring in popularity because they are free, friendly, and user centered. They attract attention, and stir conversation… they bring people together, and form the social and entertainment centers of the Web 2.0 village. Social networks will generate hype, word of mouth marketing, and a long tail, but they are not customer filled cash machines by nature. Social networks are good places for marketers to set the ground for a future sale, to research reactions to a brand, to build a user-friendly brand. How? By customizing and tailoring the message to its users, just like the social site itself. Just like Web 2.0.

The Web may have evolved to a second version, but so have its users. It’s time for those who are targeting these customers to adjust accordingly.

Update

Here is a recent article at Harvard Business Publishing rejects the possibility of a Web 2.0 bubble.

Posted by: Diana Zink on Tuesday, 27th May, 2008