Sunday, April 29, 2007

O'Reilly: Web 2.0 Is About Control

From a recent Wired interview with Tim O'Reilly:

That goes back to a major theme of web 2.0 that people haven't yet tweaked to. It's really about data and who owns and controls, or gives the best access to, a class of data. Amazon is now the definitive source for data about whole sets of products -- fungible consumer products. EBay is the authoritative source for the secondary market of those products. Google is the authority for information about facts, but they're relatively undifferentiated.

He didn't elaborate on why ownership and control were so important. It seems to me that in a data-driven world, control becomes less important, since the entry barriers are lower. But I may be wrong about that.

MORE: O'Reilly suggests that eBay has become entrenched in the secondary market, and that this raises the entry barrier. Thus eBay "owns" that particular class of data. But is the ownership inherent? How does eBay maintain control? I don't think it's because they have the best auction site: there's nothing there that can't be copied or even improved. I think eBay maintains control via the payment service. They've established a level of trust that so far hasn't been rivaled.

Meanwhile, I notice O'Reilly fails to mention Craig's List. Which strikes me as odd, because I think CL is a direct competitor to eBay (if only in certain geographical markets). CL sidesteps the trust issue by offering a more traditional classified ad approach, but even so they're challenging eBay's "control" of the secondary market data class. This can be seen from the number of mash-ups built around CL vs. those built around eBay.