Function over Form
Posted on May 29, 2008
Filed Under e-Business
During the dot-com bubble, around 1995 – 2001 (crash started on 10 March 2000), Internet companies saw phenomenal growth with share prices hitting extraordinary highs. But it didn’t last because all bubbles burst as some point. There were just too many IT companies that tried to get big fast with a strategy of carrying sustained net losses with the hope of gaining enough brand recognition to turn that around to a profit later when they are the big players in the industry.
That was the first wave of the Internet, now referred to as Web 1.0 when websites were more about form, how good a website looked and how flashy and impressive it was. No wonder the dot-com bubble burst the way it did. Companies invested too heavily in web technology that gave them nice looking brochures that used the web to present those brochures to users.
That was also a time when bandwidth was a limiting factor. Web 1.0 was a time of dial-up connectivity at 50 - 56k transfer rates. We now have better bandwidth with broadband being between 512Kb/s – 1Mb/s as the average. The better bandwidth opens the door for better functionality.
So Web 2.0 should provide improved website functionality that delivers better service to users, making it easier to turn users into customers. An increased customer base translates to increased turnover that increases net profit. Increased net profit indicates better return on investment.
So businesses should harness the power of web technology as a functional business tool rather than just to display electronic brochures.
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