Collective Intelligence Drives Web Companies’ Growth

SAN FRANCISCO – Two years ago, Richard Rosenblatt saw user-generated content as a tremendous opportunity to grow a Web upstart company called MySpace.

Rosenblatt, who was then CEO of MySpace parent Intermix Media, said that as recently as 18 months ago no one really believed user generated content would take off the way it did.

But it did take off, leading, incidentally, to News Corp.’s $580 million purchase of Intermix.

During a panel discussion here at the Web 2.0 Summit, Rosenblatt and others discussed how user-generated content and “collective intelligence” is powering this new generation of social Web sites.

“We’re just at the beginning of a world where everything, everything is going to be connected,” said Tim O’Reilly, the Summit organizer who led the panel. “Web 2.0  is the froth at the beginning of an enormous wave. The question is as we collect all this data, how to how to harness it to make our applications more powerful.”

Rosenblatt’s new company, Demand Media, is a “bottoms up” social network media company that lets users determine what areas they’re interested in participating in and see grow.

For example, Demand recently acquired, which has information on some 50,000 hiking trails. Providing that kind of information is the way traditional publishers offer bottoms down content on the Web, but it will be users of the site who determine how evolves. For example, whether to branch off into sections on kayaking.

Toni Schneider, CEO of Automattic, known for its WordPress blogging service, said he strongly dislikes the term “user generated content,” because it’s too narrow. For example, Automattic has an anti-spam service called Akismet that relies on the participation of thousands of bloggers to eradicate spam.

“We’ve applied open source principles to the company with a little bit of central control,” said Schneider.

That description might be even more aptly applied to a company run by co-panelist Jim Buckmaster, the CEO of Craigslist, the wildly popular classified ads site that is almost totally dependent on its users contributions.

Craigslist only has 20 employees but is one of the most popular sites on the Web. The only thing Craigslist charges for is help wanted advertising. And while much of the discussion centered on growth and venture capital funding, Buckmaster would have none of it.

“We’ve been approached about running unobtrusive text ads which would probably generate tens of millions of dollars,” said Buckmaster. But because Craigslist users don’t want the ads, Bucksmaster said “…we haven’t been willing to consider running them.”

Buckmaster added that the only things Craigslist has to worry about in letting its users post all sorts of products and services for sale is breaking the law. “In general, people don’t believe in the Cuba embargo, but you can’t sell Cuban cigars,” he said, as an example.

Rosenblatt advised the startups and developers in the audience not to believe anyone who says they have a bad idea:

“Focus on what you believe in, give power to the users and it will work out fine.”

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