Will the free ride end?

If you haven’t seen it yet, do a quick read of this article from CNN Money on Web 3.0.

While I don’t subscribe to the notion of “Web 3.0” yet, and disagree with Jessi Hempel’s (the author) assertion of what Web 3.0 is, this article does make a good point about the current state of the business of Web 2.0.

Even though services like YouTube, Twitter and Facebook are free to use, the parent companies supporting these sites ultimately need to profit from their investments. Right now, these sites seem more like a black hole.

The primary means of generating revenue from these sites is advertising, but honestly when was the last time you clicked on an ad in Facebook or YouTube? Or even noticed them...that is, if they weren’t already embedded in the content you were viewing. And when they were, didn’t it seem obtrusive and turn you off?

That’s exactly the point. Businesses, including colleges and universities, have discovered that leveraging the free features of Web 2.0 sites are more effective than simply buying banner ads.

Take the most recent example of the Class of 2013 Facebook scandal exposed by Brad Ward of SquaredPeg. If targeted banner advertising on Facebook would have been more effective in selling their product, College Prowler likely wouldn’t have used the free features of Facebook to develop “Class of 2013” groups across various college and universities.

I personally don’t fault College Prowler for seizing the opportunities made freely available to them. It’s business. And the reality is they aren’t the only company using social media in this way. Even we in higher education use these free features to enhance our marketing programs.

The ultimate question in my mind is how long will this opportunity last? When will the free ride end? If Google, News Corp and other parent companies behind the sites driving Web 2.0 continue relying on a 1.0 revenue-generating model, I predict the end will come very soon. And when it does will we see the true emergence of Web 3.0.