55 thoughts on “The Myth, Reality & Future of Web 2.0”

  1. I live in the enterprise world…and I call it the “unbearable lightness of web 2.0”. The enterprise is so used to compliance, control heavy eveything that they are suspicious of anything that could be built so cheaply, quickly, in a mashup, community setting…it sounds so California ,,,and incumbent vendors SAP, IBM, Accenture themselves want to pooh pooh it because they realize they are grossly over priced in comparison…I recently had a post in response to someone who asked “Is web 2.0 ready for the enterprise?” and I asked “Is the enterprise ready for web 2.0?”

  2. vinnie,

    i think a lot of web 2.0 front end/user interface innovations are going to be quite helpful in the enterprise. not really the back end stuff, but i think the biggest problems of SOA has been the user experience. Same goes for all sorts of browser-access apps like the PeopleSoft’s human resource management console etc.

    More thoughts? comments?

  3. Om,

    What you have captured with respect to Web 2.0 likely having a significant latent effect in the enterprise seems to be in line with what Google’s GM of Enterprise (Dave Girouard) reflected in his keynote presentation at InterOp 06 recently < http://www.podtech.net/?p=581 > when he said (excerpt from the page (there is a podcast available btw):

    “Consumer technology is driving innovation,” he told a crowd of enterprise technology professionals. “Generally enterprise technology isn’t really designed with the end users in mind–it’s designed with a business process in mind.”

  4. chauka,

    thanks for the email, and the link to that podtech. i am going to download and listen. i kind of have always wondered why the enterprise apps were so hard to use. that comment sums it up.

  5. I agree 100% about web 2.0 companies being focused on marketing themselves only to web 2.0 beta testers.

    My new company, while not a web 2.0 company (it’s a telecom service), uses many related technologies like Rails, AJAX, etc. Not that it matters, we’re marketing the service to users outside of the Bay Area, most of whom will not know (or need to know), what’s under the hood. All they’ll know is that we offer a very cheap (mostly free) service that makes it easy for people to coordinate their soccer team, chat with extended family, etc. They also haven’t heard of 99% of the newest Bay Area companies.

    That’d be my advice to startups here. Think about whether you could get a reporter for a paper in Idaho to write about you. If the answer is no, there’s a good chance you’re building for beta testers, and not real users.

  6. Nice to give Jeff Nolan credit. He has been talking about Enterprise 2.0 but not in a hype way. He’s got real talking points with ‘meat’. It’s boring but boring makes money but not traffic on a blog.

  7. Om , I completely agree with you on this one. I must say although I like many of the applications that some of these web2.0 companies are building, they are going to fade away soon. In fact I already sense the beginning of this fade. Yes, most of them are marketing for the beta-audience and the business model is to get funded and then aquired by the big-ones – hardly sustainable in the long run.

    I even have to admitt that I check my Techrunch feed less and less – its just not intersting anymore.

    I also agree with the Tikka & Daal theroy. Most people, will use what they are used to use, very seldom leaving leaving that path. They don’t want to choose what olives and cheese to have on the pizza. They want a few ready options to choose between. That is why portals like Yahoo, MSN and AOL is enough for most people.

  8. My ONLY Question is “”WHO”” buys YouTube.com or do they go PUBLIC and if so, how can I participate??????? Nobody can grow like YouTube.com imho


  9. Om — on the lighter side, you can’t seem to spell the guy’s name the same way twice — It’s “Kopelman.”

    More importantly, Vinnie is the one who’s talking sense here. In AJAX, the “J” is the pretty stuff to do when there’s time to fight for market share in mature segments — like webmail. The real innovation is in the “X” where the development and operating cost of many applications can be lowered by the requisite order of magnitude required to get users and companies to actually change behavior.

  10. There has been a lot of talks about Web 2.0 for the past few months. However, no one has specifically distinguished the difference between the current standard and Web 2.0. Furthermore, no explicit demonstration has been shown regarding the supposedly new standard of Web 2.0 as well.

  11. Who care if you’re targetting 53,651 users? If you can get them to pay $1/month, that’s over $5M/year, which sustain a decent infrastructure and a few programmers quite nicely. That’s the key element to Web 2.0 in my opinion – the power of the few (both in the sense of the coders it takes to make an app, and the number of customers it needs to make it successful)

  12. Well OM, enterprise software are not limited to single screen websites like gmail or calendar which took like 2 years to be released. Think of enterprise applications as one having hundreds of gmails like screens. The business process involved requires hundreds of screens. My experience has been, business owners don’t give a rat’s ass about having a AJAXy UI as long as it is simple, easy and supports their business. My experience with Oracle and clients using Oracle, show that users are more concerned about how the application supports their business process and how well it integrates, rather than if it uses AJAX or web2.0.

    Most Web2.0 companies are building what would be called simple and non critical “features” in Enterprise world.

  13. venkatesh

    i agree, so far the enterprise apps have been not very user friendly, and just because they haven’t been, doesn’t mean they shouldn’t.

    Ajax etc only help making the experience better, UI faster, and well its not stupendously expensive. I think as they continue their transition toward the networked-computing, and managed everything paradigm, the web 2.0 technologies are only going to come in handy.

    look at zimbra: its what outlook/exchange should have done, a long time ago. but they haven’t. so zimbra is working – as a user, i find it so much more pleasant than using outlook web access etc.

  14. I feel the early movers have already “moved” in Web 2.0 (namely, flickr, YouTube, digg, a few others) and the space is already getting cluttered. The same thing happened Web 1.0: too many websites competing for too few resources. There’s a limit to how many websites I personally can claim to use daily, probably no more than 5-10. It just simply gets out of hand. Another big problem is I find I simply can’t remember the names of many of these sites, because they’re choosing such user-unfriendly names. I remember the names “meebo” and “etsy” but I can’t remember what they do.

  15. I am a medical librarian. I love Web 2.0 and all that is related to it because I am constantly finding neat, free tools (e.g., programs to transform Word documents into PDFs or web pages into PDFs) and RSS feeds and email alerts and new search engines. These tools all make me far more productive in clerical tasks than I would otherwise be. I love Blummy, for instance and R Mail and FeedYes and our library recently began burning podcasts onto CDs for checkout to the ICU.

    The trouble is that is hard for Microsoft-oriented IS departments to grasp how incredibly useful the wide variety of Web 2.0 can be and I find that there is a huge public education task ahead about RSS feeds for users in healthcare.

    Take the medical publishing behemoth Elsevier, for instance. Talk about lousy marketing and being behind the curve on RSS and email alerts. They offer email alerts, but they don’t work very well. And try to find RSS on their sites! Same goes for most of the medical publishers. What a pain! Do they need some smart Web 2.0 honchos or what!? I would love to clone Marshall Kirkpatrick:


    and send out a legion of those clones to address the boards of trustees of every hospital in America and give them a presentation on Web 2.0 in the corporate workplace. A day with Marshall and there would a huge boost in productivity in healthcare and in the sector’s general knowledge of recent developments in research (via RSS feeds). I saw Marshall show a single doctor how to harness the power of Web 2.0 so as to keep up on the literature and how to participate in the blogosphere as a researcher. It was phenomenal.

    If only we could “degeek” (to use Steve Rubel’s phrase) these technologies. They could massively up office productivity. As it is, I just quietly and anonymously accumulate an arsenal of these tools. But I have to do so by spending hour after hour outside of work reading Web 2.0 blogs, learning about Web 2.0 tools and trying them at home because and not at work because of firewall issues. It is so weird to want to take to most of my work home so that I can do it way more quickly and efficiently than I can at my workplace proper.

    I agree that there is way too much emphasis on the Facebook sort of stuff. The really important developments are the scores of little tools that get so little fanfare that one reads about at Library Stuff:


    or at Marshall’s blog.

    Micropersuasion, of course, is must reading:




    is very useful.

    TechCrunch is useful for alerts about new tools.

    I wish there were a blog that was dedicated to highlighting just the nifty little office productivity tools (search engines, widgets) without any hardware stuff or the self-infatuated rah-rah of Library 2.0 and the insider tedium of John Batelle’s stuff. Just the software tools, man, in simple language. Show us non-geeks how to use OPML, for instance, and we are yours for life.

    And where are the women on this subject. Helllllooo, gals–where are you? Get in the game–sheesh! Emily Chang:


    seems to be it save for the softer social theorist types and the Library 2.0 cheerladies.


  16. Based on my experience, enterprise apps are about 3 to 5 years behind on adopting new tech. Internet1.0 or Web2.0, what ever you name it. Because of the obvious development cycles, customer installed base issues, data issues and the critical data which powers these apps and the need to protect ones own products/market. In very gernalised term, a BMW would like to sell the entire inventory of 2006 before they can start selling 2007 models.

    About Outlook web access, why should MS compete on the level playing field of web, when they own the desktop ? They will play to their turf as long as its profitable. MS could have done web only outlook long back, but then they expose themselves to competition. So its more strategic move rather than reluctance to adopt a technology. They will wait and watch the success of SOA or hosted application space, before moving over to it and dominating it.

  17. Enterprise software market as it stands is dead. Why bother writing for Fortune 500. Every sale is a year long, every implementation is a custom implementation. Software startups can’t do business this way. Enterprise buyers are slowly killing the hand that feeds, if Fortune 500 companies wants latest innovations from software startups, there needs tobe behavioral change from enterprises buyers. If not you will get maintenance software vendors providing such innovation solutions as ABAP, CICS, etc.

    Jeff Nolan should put all his effort in helping AS/400 market place if he wants, but for Web 2.0 software startups who want to get into business application market follow Salesforce.com model. Smaller direct sales force and heavy on online business model and no custom implementations. Let buyers try it for 30 days for free.

  18. I think there is a twist to what “web 2.0” really means, and what some folks think it means, and what it will come to mean.

    To me, web 2.0 is a technical term, used to describe the new tide of web innovations, mainly around UI, usability, features, etc.

    But I think there is a greater interpretation of web 2.0 – in that it also defines the new Internet. By this I mean, clearly there is a new energy on the Internet and around Internet startups. Whether or not these businesses are using web 2.0 technology, they are in a sense helping build the 2nd version of the Internet, as consumers have come to understand it. I tend to think that the term “web 2.0” is better used in this way.

    i love your description of the first x users – and I couldnt agree more. Also known as low hanging fruit, these users are virtually meaningless.

  19. Somewhere right now, a middle-manager at a large enterprise company is complaining about a programmer underling because he added Ajax to an internal corporate webapp, instead of working on something else the manager wanted.

  20. Clearly, history is just one bloody thing after another, and mostly the same things in the same sequence.

    Web 2.0 is hot!
    Web 2.0 is the Next. Big. Thing.™
    Web 2.0 is going to take over the world!
    Web 2.0 is over-hyped.
    Web 2.0 is nothing but warmed-over old technologies.
    Web 2.0 is the same old big companies doing big things for big clients.

    Ummm … haven’t we heard this already? Haven’t we been here before? Isn’t this exactly the cycle we went through with the internet, errr, web 1.0 boom a few years ago?

    Here’s the simple problem:

    Everyone over-estimates change in the short term and under-estimates change in the long term.

    So we’re all jazzed about the New New Thing™ every couple of years, then deeply disappointed six months into the New New Thing™ when, sadly, it hasn’t solved world peace, provided food for all the hungry, and made Michael Jackson’s face look normal.

    Time, my friends, heals all.

    Web 2.0 is simply an extension, growth, enhancing of the people-first, user-centric, democratizing internet that we all went to the prom with a decade ago.

    It is cool, it is different in degree, it is creating new business models, it is allowing small smart start-ups to compete, and it is not just for big business (as if that’s the standard by which all important technology is judged anyways).

    But it’s not a silver bullet, it won’t let us get to the moon overnight, it won’t make more than 50 or 60 people “overnight” millionaires, and it won’t render the internal combustion engine obsolete.

    It’s an opportunity … and opportunities, as you know, often come very well-disguised as hard work.

    So let’s not expect instant miracles: let’s roll up our sleeves, use the new tools, and make some cool stuff.

  21. Geez.. I feel like I’m a web2.0 illiterate after having read this post.
    Quite a few slippery & nebulous concepts related to Web2.0 (including web2.0) that I’m having a hard time understanding.

    But being an avid reader, one thing that strikes clear to me is that (as Ben points out), Web2.0 signifies new(renewed) energy that can now be seen even in places far away from the Silicon Valley. Web1.0, I think used to be Silicon Valley (US) centric but Web2.0 is not so.

    Web2.0 is all about new opportunities.


  22. skibare,

    I highly doubt YouTube will go publice. They are burning through venture capital like no tomorrow, and haven’t broken even. I’ve heard that they use something like 50TB of bandwidth PER DAY (1TB = 1,000GB). They burn through about $12M per year, while making nothing.

    I’m going to have to call YouTube out and say that it won’t last any longer than 12 months, unless another VC hands them more cash. Not only that, but with piracy and copyright issues, I think YouTube might be too much of a liability for a company to pick up / M&A. I could be wrong…

  23. I’ve spent a lot of time doing consulting for enterprise IT. My opinion is that the “web 2.0” opportunity in the enterprise really has little to do with AJAX and Flash UIs (although a lot of enterprise apps could use some of that). Its more to do with the fact that as many people are pointing out most enterprise applications are built as ways for management to enforce compliance and control employees (top down).

    A “web 2.0” enterprise play would do the opposite, empower people to connect within and across company boundaries in ways that builds value for the firm and its customers (bottom up). I guess some of the wiki stuff might fit here. Another area ripe for this kind of fresh take
    is probably salesforce applications.

    But the real problem is that the enterprise software startup faces huge cost of sales and skepticism. Adoption is very slow even if budgets are large. Open source and ASP business models are probably the only way around this (other than raising a ton of money =).

  24. Om:
    I agree that enterprise is where the maximum impact of Web 2.0 technoloiges will happen. That is the premise behind Zoho – SMB and enterprise focused applications using Web 2.0 technologies.

    We already see a sharp dichotomy between consumer focused applications and enterprise applications in Web 2.0, though there are some points of intersection, like Google Maps being used in a CRM application as well as in a social event planning application.


  25. I think we may see some fluff in the start up of new Web 2.0 companies but not like the dot com days. One of the reasons is low start up costs. Building a Web 2.0 site doesn’t require a huge budget and you are able to see and grow more efficently.

  26. So a disparate group developers and designers are coordinating their efforts to move the marketplace in a favorable direction. It is a tactic used frequently by indepedent creative professionals; see Art & Writing Movements, Schools of Philosophical Thought, Music Scenes. I find it expotentially less-offensive than culturally-accepted business promotion (i.e. putting signs up everywhere, the Commercial).

    So let’s all just let them innovate in peace, all right?

  27. Do Web 2.0 companies really see Techcrunch’s readership as their target market? I would suspect many of them are aiming for the 68.8 million users who visited at least one social networking site in April 2006 (according to Nielsen Netratings). 10 million from this group used Photobucket. So maybe more than 53651 people are paying attention to Web 2.0 tools?

  28. If the Internet were a commercial application and I was putting a feature request or bug report, one of the first things I would ask for is a major revision of the way typography is executed online and for a recommitment to full implementation of the complete, morphologically correct set of Unicode characters.

    I am sick of being stuck with Arial, Verdana, Times, Georgia, and a a handful of others when I design web pages (or at least, those that I expect to crawlable by robots, which in my case is all of them). I hate the fact that it is impossible to produce good and consistent-looking glyphs for things such as fractions that will work regardless of what fonts are installed on the user’s computer and what platform he/she is using.

    There has got to be a way to render fonts in web pages that doesn’t rely on locally installed fonts but which also does not place an inordinate load on web servers.

    CSS 3 would be a good start. But where is that?

  29. Web 2.0 will be no different than web 1.0 or anything other tech change except that this one is content driven and hence the technology is the commodity this time and the value is created at the app level. Standards (RSS, AJAX etc), user generated content and low cost distribution will simply reduce the cost of launching businesses and conducting business on an ongoing basis. However, the core issue remains the same: is there a business opprtunity where you play or not? In web 1.0 there was a business opportunity in auctions (but only for one player) so Ebay emerged. There was not one for Pets so many companies died.

    I would add one more caveat. VCs look at this web 2.0 thing through VC eyes, i.e. can you make a very big company out of this idea. I think there will be a lot more lifestyle business built on these cheap standards which will not seek nor be suitable for VC investments. I Call this web 2.0 phenomenon “the corner grocery of the new millenium.”

  30. Om, I agree with your take on Web 2.0 and the ‘bubblet’. I was mentioning this to a friend this weekend, and had the same conversation at the mesh conference yesterday as well. The buzz around Web 2.0 feels similar to the dot com bubble. A lot of “you corporations don’t understand” and “this will change the world” being thrown around and it’s a bit unnerving. I think adding social networking and continuing to build better apps and ways to communicate are key to the growth of UGM or CGM and innovation. But… how is it monetized? What is the revenue model? And once you have one, the next step is a buyout from a large corporation who will of course, not be looking at the Web 2.0 philosophy in quite the same way as the early entreprenuers do. They will look at it for its power to sell more products, collect more relevant data on consumers, etc.

    The conundrum for me is, and something I’m going to be blogging about, is this: Flickr works as a social network, or YouTube, or MySpace, or whatever, because it’s free and easy. Free is always the best way to create buzz and capture market share. What happens when the VC’s, or parent companies want to start generating a return on their investment? Will consumers still sign up in droves once it costs money and includes product placement? Maybe. Maybe not. But it is something to consider when trying to start and secure funding for a web 2.0 venture.

    ps – interesting talks at mesh yesterday. I particularly appreciated your analogy between the differences in the types of conversations ‘magazine style’ websites and blogs generate and the audience they are targeting.

  31. Why hasn’t anyone said it on this forum:
    “Web 2.0 is bullshit marketspeak. There is nothing “there”. Web 2.0, like the Emperor, has no clothes.”

    It’s certainly become clear on other forums that “Web 2.0” has no meaning other than as a magic word- an “Open Sesame!” intended primarily to open managers’ and VCs wallets.

  32. The future of Web 2.0 is too soon to decide, at the moment VC’s are throwing money at anything with a little panache, no substance and flakey sustainability.

    Whether it’ll last is unsure, it didn’t last time.

  33. web 2.0 is simply a business model. it is cheap: 1) free open source (no more enterprise software) 2) reliance on the community to resolve problems (no more costly service plans) 3) lower hardware costs. allows builders the option to provide free services to consumers. to generate revenue, builders use google ad sense for example. roi is much easier than in the old days. believe me, we have succeeded the old way.

  34. I run an audio production company. I use Zookoda to maintian subscriber lists and syndicate podcasts to non-RSS folks. Our feeds are tracked by Feedburner. Our popup player is AJAXTunes. Analytics by Google. I track my time with SlimTimer. I engage my clients with AirSet. These are all free Web 2.0 services and they form my online presence. If one goes away there is one to replace it.

    These sites are highly reactive to my requests and as a result they have user interfaces that work the way I do. Simple and direct.

    I see Web 2.0 as ideas manifest. Ideas are “a dime a dozen.” Some are shared widely, others fade quietly, but all of them contribute in some way.

    I think Enterprise 2.0 will thank the 53561 companies for training a whole generation of integrators and users, esp. as more of the latter become the former.

  35. Spot on!

    Absolutely right. I have met with dozens of executives from many industries from fortune-500 companies and they are saying the same thing: “Many (most!) of our applications are not critical to our company – they should be SIMPLE, INEXPENSIVE, and EFFECTIVE. And they should be able to evolve easily.”

    I think these are the core principles driving the web2.0 movement and I think that companies are definitely ready to embrace it.

    Anyone who is interested in helping us introduce it to them, send us a note (send to info@mercurygrove.com).

    Great post!

  36. What else can there be but “me-too” ideas?

    We sing praises of Google but it was just a search engine with a million dollar bankroll and good marketing.

    We sing praises of YouTube but it was just a video site with a million dollar bankroll and copyrighted material people wanted to watch.

    I applaud anyone willing to get off there a** and take action on their ideas – especially in the face of others putting them down because they’re not “innovative”.

    BlueMountain was just an electronic greeting card. Sold for millions.

    Flikr was just pictures. Sold for millions.

    The most boring, crappy idea can be worth millions in the hands of the right marketer.

    The most innovative idea can be worth $0.

    I guess it all really depends on how you define success. Is it about “making a difference” or is it about “making money”. Because there is a Huge difference.

    Scott M. Britner
    $10,000 Dad on a $250,000 Mission

  37. This post was started one year ago, has the argument changed? Not really, but what really surprises me is why the basics of every business not being applied to most Web 2.0 start ups. Make money, profit… The fact is most Web 2.0 start ups can be started for less than $10,000. This includes, beta portal, business plan, corp, bank account, etc… but one thing for sure, without a plan to make profit it is earmarked for failure.

  38. I’ve been experimenting with various collaboration & document sharing tools and have discovered an excellent site. It is a very user friendly, web-based application that is well worth taking the time to explore. Take a few minutes and look at Projjex.com. The tutorials are excellent & you don’t need to be a Rocket Scientist to figure out how to use it. It even offers a free version so you can try it on for size.

  39. Web 2.0 has a marketing slogan is dying, yes. It’s bread and butter isn’t. Most importantly, a better name is within the slogan’s definition: a social web. It’s all about user-generated content, or co-creation of content and experience within interactive communities, affiliation and accreditation.

  40. Most Web 2.0 companies are built on foundations of adventure and excitement. That is not sustainable. Robust, mature offerings are few – for that reason, many Web 2.0 startups dont last.

    There is immense untapped opportunity – specifically
    1 – PUSH INTERNET the social networking thing has pushed internet growth exponentially – this has made it impossible to really search the internet using traditional search engines – a “push-to-user” internet search engine would be desirable, as a replacement to the current pull technology offered by google, yahoo, msn…

    2 – MASS E-COMMERCE building a business and earning online is still difficult – there is SSL, payment gateways, earnings remittance, cash backs, sold goods delivery and instant availability of detailed product information to the customer to worry about. The first Web 2.0 to simplify this process will definitely possible will fly.

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