Social networking sites are all over now, youtube, flickr, del.icio.us, digg, blogs, podcasts, vlogs, the list goes on and on where user generated content is king.
So how does a large company play into this trend?
Some are trying to create communities for user generated content, but I don't think this will get much traction. I believe this approach will fail as people have some level of distrust for established companies trying to create communities - and its rightly so in my opinion. Clearly any company must protect its interests, and open community participation will often go against the company (be it negative comments, in depth discussion of competition, bad customer service, or inaccurate reviews). Further more establishing a community is interpreted as a deep commitment to participation - if the level of participation users expect isn't met users will feel betrayed.
So if creating social networks doesn't sound like a good idea, how can companies participate (and capitalize on) "Web 2.0" ? (I hate that term!)
In my opinion companies need to be come active, first class participants in social networks. Companies should actively participate (appropriately and honestly) in select sites. Participation in terms of creating content and joining conversations.
I must make sure to stress that this participation must be open and transparent - clearly identifying that it comes from the company.
Additionally I see big opportunities in the integration fabrics of these sites. Embracing OpenID and releasing gadgets for iGoogle, My Yahoo, Live, is a great opportunity to push out functionality and information to users without expecting them to join your community (lowering the bar for them to get your message).
Finding the most relevant communities is important - and something you need to do anyway. Joining these communities and donating time, information, and technology to them opens a host of positive user experiences and gets information out. Understanding these communities and offering some innovation for the user to integrate these communities into mash ups will yield usage and positive customer interactions.
A large company should not try to make a web browser, but perhaps a Firefox or IE toolbar, or even better it should see if there is something it could deliver via an already established IE/Firefox toolbar/add-on.
This is a big shift - away from trying to capture users traffic, and moving to integrating with how they want to spend their time. A move to decentralized offerings that take advantage of single back end systems, and leveraging the user generated content without trying to control it. Putting your content where users are already going to look for similar content and providing them value, lowers the barriers of entry to the user.
Typical web assets require the user to find the resource (which usually requires SEO, and advertising), then often the resource requires a custom set of credentials (user registration), and receiving updates requires bookmarking the site and returning, or signing up for a newsletter. All of things are things the user likely does not want to do, and therefor raise the barrier of entry for them. None of these barriers add value to your content - they are at best providing you information. Clever design, and integration can remove all of these barriers.
Is the user really searching for your site? Or are they searching for products meeting some criteria? This is why you find a cereal isle in the grocery store not a Kellogg's isle. You find a cheese section and a salad dressing section, not a KRAFT section. This works not just to allow consumers to cross compare, but also because they can feel informed about more choices by visiting a single location.
In addition to being more likely to succeed, the cost of this approach is less than the cost of creating communities. Its an incremental and ongoing investment into the communities, rather than a big up front investment. Less money needs to be spent on design and development. Investments can be weighed and made in much smaller increments.
Further more this approach will drive traffic to more traditional web based assets as exposure to the community will be greater, and page rankings (SEO) will be higher due to the association with the other sites (more inbound, authoritative links).
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