Magazine article Risk Management

The New Wild West: The Lawless World of Social Media, Online Communities and User-Generated Content Presents an Untapped, but Treacherous, Frontier of Opportunity

Magazine article Risk Management

The New Wild West: The Lawless World of Social Media, Online Communities and User-Generated Content Presents an Untapped, but Treacherous, Frontier of Opportunity

Article excerpt

IN the 1800s the frontier west of the Mississippi was a pristine land of opportunity for ambitious traders, entrepreneurs, farmers and ranchers. The past 15 years have offered a similar hope for any company savvy enough to leverage online opportunities into bottom-line bonanzas.

The days of using the web solely to benefit from online commerce and one-way promotion are over, however, and a new age where user-generated content, consumer sentiments and unedited dialogue define a brand's reputation is changing way all companies must operate.

The internet turned 40 years old last month. Hearing about this anniversary was surprising to many because for the bulk of this time, the underlying technology and networks that allowed distant computers to communicate with one another lived in obscurity with only a small percentage of academics, government agents and tech geeks even aware of their existence. It was not until 1990 that the World Wide Web as we now know it was born, ushering in layman-friendly platforms like the Mosaic web browser and, later, AOL to fuel greater internet usage throughout the decade.

Today, we have progressed to yet another generation of the internet, only this new era has been launched not so much by new technology but by a sea change in how people interact with one another on the computer. The first era of the web, commonly referred to as Web 1.0, was marked by static content that was distributed through a passive, one-way exchange. The current era, or Web 2.0, is instead categorized by a host of applications that allow for the proliferation of "user-generated" content that is designed to be both more collaborative and shared throughout multiple platforms. That difference may seem like a small one, but as the internet continues to age, the new standards that are being developed now will cause the Web 1.0 era to be remembered as we currently view the 1969 to 1989 period in online history: as a footnote in time that has little to no practical bearing on how the modern internet is used or organized.

Even today, an exact definition of Web 2.0 remains elusive. More than a term with a precise meaning, it is an umbrella phrase used to group concepts about how the internet is now used: user-generated content, collaboration, interactivity and information sharing. People, both professional and amateur, are putting these concepts to work in the form of blogs, social networks and online forums in almost as many different ways as there are topics to discuss.

"The web has captivated people's minds like nothing before and there are so many opportunities," said Brian Cummings, director of information risk management at Tata Consultancy Services, a Mumbai, India-based IT services provider. "The world is getting flatter and flatter."

This flat world has created a new frontier of opportunity for companies. Companies can create promotional videos for their products and distribute them through platforms like YouTube or Vimeo for a cost that is essentially free compared to television advertising. They can purchase highly targeted ads on social networking sites like Facebook that allow them to raise their profile among nearly any demographic imaginable. And they can use micro-blogging sites like Twitter to interact directly with customers and generate invaluable feedback about how people view their brand.

One company that has benefitted greatly from Twitter is Dell. By promoting upcoming sales and discounts, some of which were made available through links distributed exclusively on Twitter, the company has generated more than $3 million in direct online sales, according to company reports. For Dell, which generated $12.3 billion in revenue in the first quarter of 2009 alone, $3 million is not a windfall. But the company has seen related sales trending upwards recently, particularly as the traffic to Twitter's website continues to rise. (In June, nearly 45 million unique visitors used the site, and number that may not even include many people who only "tweet," i. …

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