Finally, The Internet As Intended.

There is still much debate as to whether Web 2.0 is more marketing hype than substance.  Web 2.0 is being billed as a revolution – a major shift in how to build web companies and web applications.  However, the technology to build “web 2.0” applications have been available since 1998, and some of the biggest Web 2.0 players are the survivors of the dot com bubble.  So which is it? Revolution or business as usual? Hype or  substance?

Its obviously still early, but from what I can see, the Web 2.0 concepts and approaches are the closest we have to aligning business models and tools directly with the core strengths of the internet. The dot com boom was filled with companies looking to move offline models onto the online world, trying to grab marketshare with huge traditional mass marketing campaigns.  The Web 2.0 players are more natively in tune with the web’s capabilities and benefits – and they are being built to take advantage of those benefits.

However, like the first dot com boom, the business models to turn usage into revenue are still young, and largely unproven. What business models will most effectively exploit these concepts in the future? Try-before-you-buy marketing and monthly subscription services are starting to prove their capacity to profitably service the long tail – but with the exception of ad networks like Google’s AdWords and Yahoo!’s Overture, no one has figured out a way to scale the models into the billions. Over the next 3 years we will see a glut of companies enter the marketplace using the principles outlined above to attempt to answer that very question.