They have huge data centers, tracking our every move, learning from our behavior and making decisions based on it. They deliver services to us, not products. They are indispensable to our daily lives. The latest crop of web 2.0 companies? How about our banks, insurance companies, and phone companies?
All of these companies have a great deal in common with Web 2.0 icons like Google, so perhaps it’s more productive to think about how they are different. And one way that I’ve found to frame this difference is to ask the question: What would Google do? What would Google do if they were our bank or credit card company, with access to our every purchase, our bank balance, our history of paying late or early, our salary and our savings rate, our preferences for where we like to eat or shop? What would Google do if they were our phone company, with access to our every phone call sent or received, how long we talk to Joe and how quickly we call Mary back? What would Google do if they ran our supermarket’s loyalty card program, tracking our every purchase?
I’m not interested in discussions of whether Google would be “evil” or not, given access to all this additional information. I’m interested in comparing the way these companies act with regard to the data they collect to the way Google (or Amazon, or any other Web 2.0 giant) acts with the data it collects.
It strikes me that one of the big differences between the 1.0 class of data aggregators and the 2.0 class is the difference between “back office” and “live” applications. The credit card company mines its database to select you for direct mail offers; it may even get close to real time in monitoring your card activity for fraud or credit limit detection. But Google or Amazon mines its database in real time and builds the results right into its customer-facing applications.
If Google or Amazon were your bank or credit card, they’d let you know which merchants had the best prices for the same products, so you’d be a smarter shopper next time. They’d let merchants know what products were popular with people who also bought related products. They’d help merchants stock the right products by zip code. They’d let you know when you were spending more on dining out than you have set in your family budget. They’d let you know when you were approaching your credit limit, with a real-time fuel gauge, not just a “Sorry, your card has been declined.”
If Google or Amazon were your phone company, they’d give you access to your entire call history, not just your last ten phone calls. They’d build a dynamic address book for you based on everyone you’d ever talked to — and they’d build p2p phone number lookup from your friends right into that address book. They’d get rid of 411, and just help you search for what you need, and then make the connection for you.
This is one reason I think that Microsoft’s term, “Live Software” is so right on. (I thought of naming this piece “Why Live Software is a better name than Web 2.0.”) It’s unfortunate that Microsoft has chosen that name for its own products only, because it goes right to the heart of what makes Web 2.0 applications so interesting: they are alive, or as close to it as you can get with a computer. They learn from and interact directly with their users (and more specifically, provide services to individual users that benefit from the aggregate interaction of the system with all of its users.)
I first got this idea when I spoke at the Omniture Summit earlier this year. It struck me how different the positioning of Omniture is from the positioning of earlier web monitoring packages like Webtrends or Hitbox. These earlier packages were ultimately reporting packages — back office applications that would slice and dice data that you could study and respond to. But Omniture positions itself as an “online business optimization” package, helping you to optimize your web site dynamically. Omniture does reporting, sure, but its most advanced practitioners use it to build dynamic sites that are self-configuring based on user activity.
Of course, the rub here is that Google’s own analytics package, Google Analytics, is more of an old style reporting package. It just goes to show that not even Google necessarily thinks through the right answer to the “what would Google do?” question. Nonetheless, I think it’s a good question, one that every forward-looking software company, every enterprise, and every web application or site should be thinking very hard about.
How can you turn your data from a back-office asset that benefits only your company into a driver of dynamic user-facing services? How can you make your software more responsive to its users, harnessing their collective intelligence and learning from them? How can you make your software or site more alive?