What's this Web 2.0 stuff anyway?

I was explaining what this blog is all about to a friend who knows a lot about the software business, but who hadn't come across the Web 2.0 term. So I thought an explanation and some reference points were in order. There are major market forces being generated by this particular family of discontinuous innovations, with new categories of products evolving, some with breakthrough technology. Before I get in to explaining the phenomenon, to get a steer on the best business strategy in this environment, you can do no better than read Geoffrey A. Moore's Inside the Tornado (and Crossing the Chasm), which have examples from an earlier time before the Dot.com shakeout, but with messages that still hold true.

The term itself was first coined at a conference brainstorming session between Tim O'Reilly and MediaLive International, which also spawned the Web 2.0 Conference (second annual, held earlier this month). Consequently, the best explanation I could find was on O'Reilly's website. Some suggest it's just a marketing buzzword (and I know it's regularly misused that way) but it is much more important, and all about viewing the web as an applications platform.

One of the shorthand ways to describe what it's all about comes from this extract from his article:

"In our initial brainstorming, we formulated our sense of Web 2.0 by example:

Web 1.0 --> Web 2.0
DoubleClick --> Google AdSense
Ofoto --> Flickr
Akamai --> BitTorrent
mp3.com --> Napster
Britannica Online --> Wikipedia
personal websites --> blogging
evite --> upcoming.org and EVDB
domain name speculation --> search engine optimization
page views --> cost per click
screen scraping --> web services
publishing --> participation
content management systems --> wikis
directories (taxonomy) --> tagging ("folksonomy")
stickiness --> syndication

The list went on and on. But what was it that made us identify one application or approach as "Web 1.0" and another as "Web 2.0"?"

Tim's article goes on to explain that the characteristics of Web 2.0 companies include offering scalable services rather than packaged software. Their approach will harness collective intelligence in some way - from blogging to the Open Source Software model. They will use some form of customer self service model, and adopt a very different, "lighter" business model compared to traditional software vendors. It's all very exciting. Read more here.

I did, however, have to look up some of the jargon and buzzwords in the article - folksonomy for example. See the Bullfighter, elsewhere on this site!