Information has 3 dimensions according to Boisot
- Codification. Codified information has concepts that are easily mapped to categories. For example, Clark Kent breaks down to First name and last name, rules of assignment are easily understood, there is no ambiguity.
- Abstraction. Highly abstract information has a smaller set of more difficult to initially understand set of concepts that are more general purpose. E.g. animal is abstract. Sand is concrete.
- Diffusion. Highly diffused information is shared widely. Information that is not diffused is held within a few people's minds or hands.
So a lot of the stuff in Web 2.0 (I still dislike that word, who comes up with them??) is data is mildly or poorly codified, almost never abstract, and very easily diffused. The author of the above, Boisot, says that extracting direct economic value from this kind of information is difficult because it is chaotic. The market for this information is also typically dynamic and fast changing. Intellectual ownership of this information will probably be suspect.
Information that is the exact opposite, i.e. codified, highly abstract and low diffusion is more ordered and stable. Things such as academic journals, reciepes. The information is more easily converted to some form of advantage.
So much information from Web 2.0 is often valueless and chaotic. Companies trying to live in this zone will probably disappear quickly and buyers should beware. There is a need for companies to understand how they make money off the information and how information flows between these two very different states. In other words, it's hard to make money from information that's not codified, not abstract and highly diffused. The companies that are considered the top examples of the web 2.0 economy are actually using the chaotic information as a ruse to make money the old fashioned way of bank accounts, trade secrets, proprietary technology and massive scale to win.
