What Ever Happened to Not Putting All Your Eggs in One Basket?

Web 2.0 has developed its own ecosystem, with application builders able to build their apps using mash-ups, AIR clients, and new apps on the backs of popular 2.0 apps already in wide distribution. Virtually every day we see announcements of new applications based on Twitter and FriendFeed and Google Reader, as well as Facebook apps, MySpace apps, and Hi5 apps. The real question, however, is what will happen to these companies and this ecosystem if one of the foundation companies fails. And if you limit your product to rely on certain technology, aren't you limiting your user base unnecessarily?

I've swiftly come to the realization that FriendFeed suffers a bit from this effect in its own right. Try as people have to persuade me that it's useful, I don't use Google Reader for my feeds, and have no plans to in the future. I use Google Reader, discovered quickly that I hated it, deleted all my feeds, and never returned. However, much of the interaction on FriendFeed is dependent on sharing items in Google Reader and commenting on those items. Since I don't share items on Google Reader, I'm already left out of much of the conversation. Game over, FriendFeed.

Twitter has created one of the most bustling imaginary economies yet in Web 2.0, with applications launched every day to interact with it, serve as a client for it, take stats out of it, and play around on it. And yet Twitter itself has no business model in place, and generates no revenue. How does a company decided to build THEIR product, and therefore, base their financial future on a product that doesn't have one of its own?

Another example is Xobni, the add-on for Microsoft Outlook. Their obvious exit strategy would be to be acquired by Microsoft, yet they turned down that very deal. The argument has been made that they may have a version for Yahoo Mail up their sleeve, with other mail systems to follow, but they may also have blown the one real exit that they had. Google could probably build the same functionality for their own mail system as quickly as Xobni, and who knows what Yahoo's eventual future would be.

I've beaten the "It's not an app; it's a feature" drum quite a bit in the past, and it's for a reason: I'm concerned with the future of many of these companies when they bet their entire company on the success of one company or application. If a company like Twitter were to go under, how many applications and companies would it take down with it? And is the interdependence of mash-ups that Web 2.0 is so associated with a dangerous trend?

Image used under Creative Commons license, credit makeslessnoise.