Barry Diller Opens Web 2.0

by Daniel H. Steinberg

The second Web 2.0 conference began with a day of workshops on various aspects of the participatory web. After lunch 13 companies showed their new products in the "Launch Pad" session. From an application that allows you to roll your own search to a platform for travellers, the new releases featured the users. As Tim O'Reilly said when he and John Batelle kicked off the keynote, "the framing idea of this conference is the network as a platform."

The Meme Takes Hold

O'Reilly, founder and CEO of O'Reilly Media, said "When the idea for the Web 2.0 conference was proposed a year and a half ago it was a new idea. When I looked this morning there were 10.7 million citations in Google." He noted that a lot of people are attaching this term to their websites and that there have been questions of whether this is a lot of hype or whether there is substance behind it. John Batelle, chairman and publisher of Federated Media Publishing added that "Last year when we were standing up here there was a collective sensibility of 'wow we made it through the winter of two or three years.' My view is now something really important is going on, let's not screw it up." O'Reilly added that we are running the risk of another hype cycle like the dot-com period in the late 1990's.

The two set the tone for the rest of the conference by looking more broadly at some of the important ideas behind Web 2.0. O'Reilly said that one change was the view of a "website as a component rather than a destination." He used as an example and stressed the importance of harnessing the power of your users.

Batelle pointed to the importance of lightweight business models in the world of Web 2.0. You can build solid companies on top of this web platform with fewer than ten people. He added that many of the innovations in the past year have centered around the new ways of displaying information using AJAX and other technologies. Unlike last year, Batelle explained, this conference is not focusing on the web as a platform but rather on the things that run on this platform and the issues involved. O'Reilly explained that this includes the tension between user control and vendor control, the future of entertainment, and the future of the web as seen through the eyes of young users.

When You Need to Ask

John Battelle invited Barry Diller, Chairman and CEO, IAC/InterActive Corp., and chairman of Expedia, Inc., to join him on stage for a conversation beginning with the question "Why did you buy Ask?" Diller answered that they had been worried that all of their sites could be disintermediated by global search. After spending a lot of time analyzing this, they concluded that as long as they kept innovating that there was no reason to be worried defensively. Diller often returned to this notion that well-executed good ideas will be rewarded.

Diller noted that the search box would continue to evolve and they looked into AOL but the price tag was high. They had also been looking at Ask and thought their "search technology has potentially differentiating properties both in the way it searches and in its feature set." He said that they structured a deal so that even if they didn't gain market share, there was still enormous promise. He explained that they had created a chart with, from left to right, Google, Yahoo, MSN, AOL, and Ask. They continually asked how they could "move to the left".


Diller decided the first thing to do is to gather the service together so that the consumer, once they saw the integrated whole would say "Oh, I like that". They concentrated on providing features based around smart answers and an interface that allows you to expand or narrow your search and quickly view interesting pieces of the results. They can then roll this out "to the 50 million coursing through IAC." For Expedia the goal might be to provide the best travel search. In every case, Diller explained, the plan is to "do the things to differentiate your product and then get them across to people."

Barry Diller Opens Web 2.0

As a possible preview of what is to come, Diller made an extended analogy between Google and Henry Ford. He noted that "Google was the first to clean up the page--that's kind of genius. Then you type something in that box and in a second something appears. They have a great product." But then he told the story of Henry Ford who was immensely ssuccessfulby providing a very simple solution. You can buy one car in one color: a black Model T. He owned the car market and no one else could compete with him until he kept doing one car year after year. Then General Motors began to offer different cars to different segments of the market and different models each year. Diller sees Google's continued simplicity as an opportunity to offer an alternative.

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