By now, we’re all familiar with the success of Web 2.0 “poster kids” like YouTube, Flickr, Digg, MySpace, etc. However, these are internet “pure play” businesses. The question is: how can traditional businesses embrace and benefit from the concepts and technology of the Web 2.0 landscape?

While our peers in the Internet industry are already growing tired of the discussion, I find that many of clients are just beginning to understand how they can benefit from these ideas.

So, what does our industry mean when we talk about Web 2.0? The underlying, fundamental concept is simple:
It's about the user.

User-centered content, functionality and technology is at the heart of Web 2.0. In fact, the rise of the website user as an active participant in a site's content and community is the cornerstone of the shift from the original web model to second generation ideas and methods. The following characteristics largely define this new era of websites:

1. User-enhanced content

Everyone loves Amazon -- you can find just about anything there and purchase it in "one-click". But without the innumerable bits of user-added information like product ratings, reviews, rankings, etc, Amazon would be just another eCommerce site. By harnessing the value of their users, Amazon has transformed itself into an incredible source of information, and, in the process, has set the bar high for would-be competitors.

This user-extended value concept can also be seen in the best blogs and socially-focused news sites like Slashdot, Daily Kos, TechCrunch, (and to a lesser degree, Digg), where half (if not more) of the value of sites is in the comments themselves. The appeal is audience-centered, as users carry on lively (ahem) debates, refine and/or rebut the points made in original posts.

Key features of user-added value include:

* Comments - accepting comments from site users

* Ratings - allowing users to rate an item or story according to their perception of its value

* Ranking (based on user feedback or tracking - what the most popular stories are, most popular search terms, etc.

* Tagging - adding information to a given item on a site by adding tags/labels that help clarify or categorize the site's content

2. User-contributed content

Partially due to the the rise and mainstreaming of blogging, users have gone from passive consumers of website content to active participants who expect to be involved in the content on their favorite sites. In fact, sites that have failed to recognize this trend have fallen far behind newer competitors that offer these capabilities. A great example of this is Google's purchase of YouTube. Why, since Google already had a YouTube competitor in GoogleVideo, would Google spend money to essentially create what they already had? Simple. YouTube made it so much easier for users to upload and contribute their own content that YouTube quickly became the defacto site for video upload and sharing.

Other sites that enable (even rely on) user-contributed content include Wikipedia, photo-sharing site Flickr (and its dozens of copycats), many politically-focused news/blog sites like Free Republic and Daily Kos, and of course, MySpace which is nothing without the contributions of its huge userbase.

A great hybrid model of user-contributed content with is NewsVine, where users suggest "official" news stories for promotion to the main page, create their own original content for inclusion side-by-side with the "official" news stories, and debate the value/accuracy/relevancy of all these stories.
Key features of user-contributed content include:

* Wikis

* Blogging

* Photo and Video upload

* User-suggested or promoted content

3. User-focused technology and functionality

The days of the "walled garden" are over. Users want and expect access to your site's information and data in ways previously unimaginable. From the simple (RSS feeds) to the complex (APIs), users expect to be provided with methods to get to your site's content and functionality. After all, it's often their own content and data they're after.

Users also expect that the site's user experience is going to be as advanced and smooth as possible. Page content and functionality that might be clickable, draggable or otherwise interactive should be. Users that have grown accustomed to the seamless experience of working with Google Maps or Flickr's slideshows expect similar interface conventions everywhere they go.
Key features of User-focused technology and functionality include:

* RSS Feeds for content syndication and aggregation

* Site API for remote interoperability with site functionality and data

* SaaS - Software as a Service

* AJAX or similar user interface conventions

4. Community/Social Networking
In addition to being able to interact with data and information in new ways, users want to be able to make meaningful connections with other site users. We see this taking place in superficial venues like MySpace (how many "friends" are really useful?) to more business-oriented sites like LinkedIn. Users look for ways they can tell others about themselves, collaborate with co-workers, communicate with their friends and acquaintances, reach out to potential new contacts, and create community with others who share similar interests or focuses.

Key aspects of Community/Social Networking include:

* Rich user profiles

* Private messages

* Online collaboration tools

* Comments/message boards

* Integrated site chat

With a clear understand of Web 2.0 principles, businesses can begin applying these approaches to their respective online strategies. In future articles, I'll outline successful examples of Web 2.0 applications in traditional business models, including health care, magazine publishing, real estate, and more.