Abstract
Since the 1990s, Tim Berners-Lee proposed the HTML and HTTP Transmission Protocol; the Internet has grown into the blue sea of free competition. Because of vigorous development in Web2.0 technology, user can share information actively and can simply gather the power of community by the long-tail by participating in the Internet. After gaining popularity of the web consumers, enterprise can make the follow-up advertising or provide fee-based services to get more benefits. This paper adopts the theory of real options to replace the traditional investment theory (NPV) by regarding Web2.0 technology investment as option for enterprise, so that all the follow-up strategies become controllable options for enterprise. Also, in order to model the first move advantage and the power of brand leadership in market, we combined game theory to add in the thinking of competition. Finally, we design an investment game of Web2.0 technology by simulating the competition in search engine technology between Google and Yahoo to perform how the uncertainty affects expected revenues of investment and to perform how enterprises make an innovation strategy with real option approach.
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