Why taxonomy is important
If you're struggling to convince business sponsors that building a taxonomy is important, you can probably get a few bullet points from Gerry McGovern's article on Clickz.com. He makes some excellent points about the challenges of creating a good taxonomy and why it's costly to business if done wrong. Here are just a few:

• Web site classification impacts both the "map" and the "geography." Classification is not simply about mapping content that is already on a Web site. It also dictates the very structure of the Web site.
• The organization often has a preexisting classification that is understood by its employees but not by its customers. A difficult decision needs to be made with regard to whether to design two classifications or create a single unified classification that is understood by both.
• Web site classification is an ongoing process prone to error. Each time a new document is published on the Web site, it needs to be classified. If the document is classified incorrectly, then it undermines the entire classification design.

The first point about the "map" and "geography" is a great one. Site structure and navigation majorly impact site content. On the web, many second-level pages (right off the home page) are essentially navigation only pages -- 'branches" of the tree if you will. The navigation pages effectively become "meta-content". For example, the Yahoo World News page is really a branch page -- yet as meta content it provides the reader with an overview or summary of the day's news. No one wrote a summary, but aggregating microcontent on one page and providing navigation and structure to the leaves of the tree, the articles, provides a constantly updating overview.

On web projects, it's easy to focus either too much on the leaves or the branches. In planning a new site, where no content exists, it's common for team members to plan for a lot of branches without know how big the leaves really are. Sometimes they plan for a number of pages about "our unique business proposition", when in the end they end up with three paragraphs. Other times, when repurposing content or redesigning an existing site, too much focus is given to arranging the leaves, and branches are not well thought out. Those sites can end up with branches that are too short -- linking to too many pages from one page without proper introduction -- or they can end up with branches that are too "skinny" -- navigation pages that don't contain enough information about the pages they link to. It's difficult to get the focus right -- achieving a balance where each page from top to bottom works well. Often this requires restructuring existing content to make it work.

Many companies are moving in the direction of Corporate Portals...an internal web trailhead to all things related to the company. These often include a type of enterprise taxonomy, and can be very difficult to plan, implement and maintain. They require a lot of research, analysis and process -- even changing corporate culture to some extent. These taxonomies make the typical web site taxonomy look trivial in comparison. If you're looking at corporate portals or other technology to categorize web content, keep in mind that regardless of what the technology vendor says, the challenge of creating taxonomy has little to do with technology, and lots to do with unique user and business needs.