Companies should ignore Web 2.0 at their own peril

Companies need to embrace Web 2.0 or face being pushed aside in the battle for business, according to new research.

A study conducted by management consultants Booz Allen Hamilton found that 41% of UK Internet users currently access Web 2.0 sites such as YouTube, MySpace and Facebook, to connect with others in a worldwide online community and this figure is set to increase.

Booz Allen Hamilton suggests that companies need to take advantage of the social networking and video driven developments of Web 2.0 to win customers. The consultancy also advises companies to use social communities to drive buying decisions, in particular by using online forums to generate feedback.

The survey found that 43% of UK MySpace users are happy to use purchasing recommendations from unknown peers, which the study says could signal a new trend in the way consumers make buying decisions.

Other results highlighted by the survey were that newer sites have predominantly young user communities, with 50% of MySpace users under the age of 25, but older people are also turning to Web 2.0, with 24% of MySpace users in the 35-49 age bracket. This is borne out, the research says, by the finding that 25% of Amazon users are over the age of 50.

The study said: "Unless businesses recognise and respond to such trends, the shift in consumer behaviour is likely to have an adverse effect on both customer acquisition and retention. Web 2.0 has already reached a critical mass -- companies must now adapt to the new paradigm. The need to evolve existing business models by integrating the Web 2.0 environment is urgent."

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