PROFIT POINT OF WEB 2.0
Juchong Liu, Zhenji Zhang
School of Economics and Management, Beijing Jiaotong University, Haidian District, Beijing 100044, China
Jingyuan Zeng
School of Economics and Management, Beijing Jiaotong University, Haidian District, Beijing 100044, China
Keywords: Web 2.0, Business Model, Profit Point, Webpage.
Abstract: Web 2.0, with its social, free, and open characteristics, has been bringing the Internet a profound evolution
within less than a decade by increasing the applications of Web 2.0 elements. In the academia, most
research is focused on the concept, characteristics and theoretical basic research of Web 2.0. Instead, this
paper reviews the literature about Web 2.0 research first, introducing the definition, the theoretical basis, the
features and business model of it; thence puts emphasis on studying the “Teainchina” case to demonstrate
the real application of Web 2.0 elements; ultimately, this paper concludes that business model is truly
important, but the site's profitability is even more vital by putting forward Profit Point and analysing it.
Internet companies should deliberate websites design under the theory of Web 2.0 to explore Profit Point
and then carry out promotion and marketing of the website to manage internet business well.
1 INTRODUCTION
The Internet or World Wide Web has a short history
of about 20 years, during which the Internet had the
glorious heyday when the “dot com bubble”
happened as well as the horrific moment when the
bubble broke up. Till around 2003, the websites with
SNS features like Blog came out and became more
and more popular, and the Internet was revitalized
and has been developing rapidly. It’s called Web 2.0
and the previous was Web 1.0. Owing to this, the
Internet world, Internet business, and Internet
technology got much attention from netizens,
investors, companies, network workers, and
entrepreneurs, being in a prosperous way to develop.
2 LITERATURE REVIEW
2.1 Web 2.0’s Overview
2.1.1 Web 2.0’s Definitions
Web 2.0 was produced in 2004 when a brain storm
was undergoing between O'Reilly and MediaLive
International.Web 2.0 is a philosophy and ideology
of upgrading the Internet system from the original
top-down control of resources by centralized control
system led by a minority into a bottom-up netizens
who are the majority with the collective wisdom and
strength of them. (China Internet Association, 2006)
At present, most scholars in China accept this
definition, such as Zhongwu Xie, Zhengqing Zhao,
and Chuanhong Peng.
Web 2.0 should be the same style of these
famous websites, Flicker, Craigslist, Linkedin,
Tribes, Friendster, Del.icio.us, 43Things.com which
are so popular to be the representatives of websites;
Web 2.0 should take the Blog, Tag, SNS, RSS, Wiki,
and other social software applications as the core
application in building and managing a website; web
2.0 should take advantage of the theory of Six
Degrees of Separation and the technology like XML,
Ajax and some others to become new generation of
Internet model. (Blogger Don, 2005) Web 2.0 is a
technology platform, using a range of advanced
applications such as data-oriented and
cross-platform lightweight web programs. (Erik
Wilde 2007, Graham Cormode, 2008)
132
Liu J., Zhang Z. and Zeng J..
PROFIT POINT OF WEB 2.0.
DOI: 10.5220/0003485601320136
In Proceedings of the 13th International Conference on Enterprise Information Systems (ICEIS-2011), pages 132-136
ISBN: 978-989-8425-56-0
Copyright
c
 2011 SCITEPRESS (Science and Technology Publications, Lda.)

Web 2.0 is the upgrading of the Internet in its
development process, from time to time with some
new elements such as new programming language,
and then it may become known as Web x.0.
Secondly, the two definitions reflect that the Web
2.0 is social which we see from the former's "the
collective wisdom and strength of the majority of
netizen" (China Internet Association, 2005) and the
latter's "take social software applications as the core
application" (Blogger Don, 2005). But it can also be
found that in China scholars prefer the more
subjective definition of "person" who is the main
body of the Web 2.0, while other scholars outside
China pay more attention to the more objective
definition of "technical" basis for the
implementation of Web 2.0.
2.1.2 Web 2.0’s Features
Regarding Web 2.0’s features, scholars around the
world share one consensus: the majority of common
Web users who are the main body of Web 2.0,
taking full use of Blog, Tag, Podcast, API, RSS, and
other applications to create a large number of
micro-content with each other through the SNS to
link every netizen together and then the open social
networking system comes out. (China Internet
Association, 2006, Blogger Don, 2007).
2.1.3 Web 2.0’s Theoretical Basis
The Long Tail----Online products’ displaying space
is virtual causes almost no marginal cost if one more
item to be displayed there; more and more advanced
network causes that the coverage of consumers is
beyond the geographical limits. Hot and popular
commodities are head of the long tail curve, the
other commodities are long tail of the curve, but the
total profit of “long tail” products can be comparable
to the profits of hot and popular commodity in the
head. (Chris Anderson, 2004)
Similarly, in the Web 2.0 era, portals websites
and search engines are the head while more long
tails can not be ignored, which are Blog, BBS, video,
Electronic magazines, SNS and so on. In addition,
netizens in the long tail produce as many contents as
those who are in the head because they are good at
websites building or managing, even ordinary users
may have more influences on the Internet than those
professionals. "Under Web 2.0 environment, each
web user may produce and duplicate a large number
of micro-contents every day. As the Long Tail says,
these micro-contents are going to get together to be a
considerable wealth." (Wang Jinyun, 2010)
Six Degrees of Separation----There are some
"weak ties" in our society. (Stanley Milgram, 1967)
Explicitly speaking, it’s expressed more directly that
you can be connected with anyone through a
maximum of six people because in the Web 2.0 era
of the Internet, with a strong community of SNS
website, you can link all Internet users through this
"weak ties" together, leading to provide and share
resources with each other.
2.2 Fuzzy Business Model
The “dot com” bubble in the Web 1.0 era left a lot of
trauma to the world while the emergence of Web 2.0
could heal the wounds. Up to now, however, the
business model of Web 2.0 is still very vague to
those IT elites and IT businessmen. As we know,
Internet Company’s profit model can be roughly
divided into five types, which are wireless service
revenues, Internet advertising revenues, online game
revenues, e-commerce, and Internet value-added
services revenue (Yang Tao, Zhigang Xi, 2007).
Judging from the website operator’s side, many
companies “cleverly” think he is wise, “posing” to
use the package of Web 2.0 conception, then that is
the Web 2.0 business model (Qingdian Ding, 2006).
“A lot of Web 2.0 websites are increasingly put
on-line day by day, unfortunately, however, the big
problem is they didn’t find the real support key point
to survive, but just sell advertising space to attain
profit like the previous business model” (Decheng
Chen, 2007) “Although fully paid blog business in
the United States survived, this model is still
difficult to promote universally in the United States,
not to mention the possibility of it in China where
people are even less optimistic towards it" (Yang
Tao, 2007). If we see Web 2.0 from an economic
perspective, which means the profitability of
Web2.0, it’s a complete loser (Jessi Hempel, 2009).
From the website user’s perspective, netizens are
not so adaptable to use this new model of Web 2.0.
Therefore, it cannot be done easily to change
consumers’ habits in the short term. (Jinyun Wang,
2010) As to the web users, the needs and acceptance
of using elements of Web 2.0, such as Tag and
Comments, are in a high degree of correlation with
the shopping experience (Hui Chen, 2008).
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2.3 Summary of Literature Analysis
Web 2.0 is still very popular at present; its
applications are increasingly being widened and
deepened; its innovation and use of business model
are more concerned by the industry and academia.
After all, Web 2.0 is a new thing, being in the new
phase of the development of the Internet, will in any
case adapt to the present reality and the network
society much easier than that of Web 1.0. But I think
the reason why the Web 2.0 business models are not
clear is really that it’s expected to be too profitable,
even unrealistically, thus leading to a greater bias
towards Web 2.0 business model.
I believe that the current profitability point, such
as NarrowAd, of the majority of Web 2.0, is fully
consistent with Web 2.0 features, but it is not a good
idea to only rely on these passive investment
behaviors to gain profit. Apparently, because the real
source of profit is not in such profitability points, but
the users or the consumers there who will pay as
much as they can if the experience on Web 2.0 is
good enough. Therefore, we must take the initiative
to find ways to find or to create the real profitability
points and thus will bring about hope and
opportunity to earn profit for Web 2.0.
3 CASE STUDY AND
SUGGESTION
3.1 Case Study
The “Teainchina” website was set up in 2008, being
one of the typical C2C tea sales sites
(http://www.teainchina.biz/)
, and it’s also the first
website I engaged in for my internship.
Obviously the “Teainchina” is a commercial
website seen from its domain name selected as “biz”
which represents business or commercial website.
But to open the main page usually takes about 5
seconds or more, which is fatal for it because clients
won’t waste time on waiting the page opened in long
time, particularly for those portals like
www.sina.com in China and www.yahoo.com in
United States. Consequently, they need to be
optimized to light the web pages as possible as they
can. But this “Teainchina” is a professional C2C site
to sell Chinese tea, to some extent, so the potential
purchasers are willing to wait if it’s really opened
too slowly. However, confronting the intense
competition from many other similar tea sales
websites during the past two years, the return was
not as good as expected. Thus there was no urgent
desire to update the server and optimize web pages
which unavoidably had all the potential tea buyers
experience disappointedly when they were browsing
the items on the pages.
Honestly speaking, the homepage of
“Teainchina” is very fresh and clean, which shows
you super green, usually the color of green tea, and
makes your eyes full of the tea aroma. As a result, it
appeals them so strongly that they unknowingly stay
on the page for a longer time during which they are
immersed in the fabulously green feeling;
meanwhile the page retention time is increasing with
their staying browsing. It’s well known to us that the
length of time of a page’s retention time is one of the
most vital characteristics for a website to become
popular and influential in the internet world, with the
reason that the longer the page retention time is, the
more chances the page included by the web crawler.
Figure 1: Search bar.
In its home page, we can see it’s along with the
fully use of Web 1.0 features like Email and pure
HIML elements (see Figure 4), but what’s more
significant is both “Quick Find” search bar (see
Figure 1) and RSS function (see Figure 2) added are
typical features of Web 2.0, to facilitate the
necessary inquiries of the browsers accessing to the
target tea and new information updated every while.
Figure 2: RSS.
When someone searches “Longjing” and then
chooses “Longjing Green Tea (West Lake Dragon
Well) 2009” to view, he or she will come across the
fresh tea as well as several humanity designs (see
Figure 4) which adequately embody the Web 2.0
features on the page. (see Figure 4) Firstly, the
excogitation “Notify Me Updates” helps future
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buyers acquire timely information about this kind of
tea as well as other news you want to know provided
you have signed up. Secondly, the design “Write A
Review” is in line with the “Comment” that is one of
the outstanding Web 2.0 elements, assisting
potential customers not only in publishing their
comments on the tea but also seeing others’
comments. Thirdly, the command button “Add To
Cart” is devised to help purchasers easily add or
delete products, and this kind of design is broadly
embedded in almost every commercial websites.
Lastly, at the bottom of Figure 4, you can vividly see
the significant “Tag” label, showing the other tea
that ordered by customers who bought “Longjing”
tea on the page and providing you with a variety of
other options. If you are interested in one or all of
them, just click the relevant one to open its main
page to learn more details and quickly and
conveniently have an order. Moreover, even all these
labels and command buttons are placed together
allowing users more expediently to enjoy shopping
and experiencing the user-oriented designs. In all,
this website has made the utmost use of the Web 2.0
elements, and has even placed them together,
Figure 3: Forum of Teainchina.
Figure 4: Item displaying page of Teainchina.
allowing users to more freely experience shopping
on the page. It reflected user-oriented design.
There is still another classic and special Web 2.0
element named “Forum”, which is "Chinese Tea
Forum" attached to the “Teainchina”.(See Figure 3)
Generally speaking, a forum can perform better than
“Comments” in Web 2.0 in terms of demonstrating
the participation of all netizens, the freedom to
create contents, the social features and some kinds of
SNS characteristic, on which there are a large
concentration of tea customers, website users, tea
businessmen and tea professionals who can freely
announce their views and post their words related to
tea, tea culture and so on from their perspectives,
that is also called micro-content production. The
“Forum” also has a feature that is getting a great
deal of people together to increase web activity or
vitality as well as web viscosity of the site thus
consequently to help “Teainchina” implement SEO
(Search Engine Optimization), and in order to better
promote the site to more and more consumers of tea
finally. Well, this is also the application of the Long
Tail theory in the real life embodiment of the
network.
3.2 Analysis and Advice
In my opinion, those uses of Web 2.0 elements
above shown in from Figure 2 to Figure 5 are the
source of earning or profit of “Teainchina”, named
Profit Point in this paper. Profit Point is defined as,
excluding the main structure of a page such as title
main body, articles and relevant images, those
discrete elements which can bring in profit like the
Comments, Search-Bar, RSS, Tags and Forum.
Profit Point is customer-oriented and provides users
with applications helping user and user as well as
user and website interact with each other easily and
conveniently. It will directly influence the popularity
and profitability of the website to use Profit Point
more or less, good or bad. Profit Point, as far as I
study, can be divided into two categories: direct
Profit Point and indirect Profit Point. Direct Profit
Point can directly bring the website profit to benefit,
for instance, NarrowAd; Indirect Profit Point can’t
bring in money directly as direct Profit Point, but
can assistant direct Profit Point to improve
profitability like RSS.
On “Teainchina” website, there are some Google
Adsense Ads, being popular currently, which is an
awesome direct Profit Point which will bring about
advertising revenue from the Advertiser when
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intentional browsers click the Ads. What is more
vital is that putting Google Adsense Ads also makes
the web attain a high PV (Page Value) then
favorable PR (Page Ranking) with the help of
Google. On the contrary, the Search-Bar and Tags
mention above are indirect Profit Point.
In the era of Web 2.0, web building and
management are not completely isolated from Web
1.0, but still have many common Profit Point, one of
which is E-mail. So, from the time of E-mail
invented in Web 1.0 era to the current Web 2.0 era,
E-mail marketing has been preferred by many
websites; what is worse, some websites immorally
took the viral E-mail marketing which is extensive
to the web owner and terrible to ordinary netizen.
For this reason, I firmly believe that special, point to
point and user-oriented Email marketing is effective.
In the era of Web 2.0, I strongly suggest that
Internet companies should not blindly focus only on
innovation of Web 2.0 business model while
ignoring many current Profit Point which can be
easily implemented to make a profit, because at that
moment, Web 2.0 is not the latest and most
advanced development status of Internet. Web 3.0
began to be hot tips online and also has attracted the
attention of a great deal of jobholders in industry and
scholars in academia. (Jessi Hempel, 2009, Xiaolin,
2009) Internet companies should take Web 2.0 as a
guiding ideology and an advanced Internet
marketing concepts rather than a business model.
4 CONCLUSIONS
So far, Web 2.0 researches have been being very
abstract in its concepts, theory, and rough
introduction of its application while lacking some
concrete and real interpretation of using Web 2.0
feature in building website by a specific case of Web
2.0 sites. So it sounds a fabulous idea to take
“TeainChina” as an example to have an empirical
analysis of the practical application of Web 2.0. In
the paper, the concept of Profit Point was put
forward and interesting, almost all Web 2.0 elements
can be regarded as Profit Point, some of which are
classified into direct Profit Point and others are
indirect Profit Points. Thus, the majority of Internet
companies may make full and efficient use of these
Profit Point to bring in revenue for the company
according to their actual situation of the website. As
we know, these ideas about elements or features of
Web 2.0 are the results of the Internet industry and
academic research, and calling it Profit Point is in
line with theirs Web 2.0 elements, being considered
from a novel perspective----to categorize the web
elements by their profitability.
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