The coming recession is going to burn away a lot of web 2.0 startups. In fact I’d say we are seeing the end of web 2.0 altogether. I think it was a period of great experimentation, lowered costs and returning VC confidence following the first bust allowed entrepreneurs to experiment with the social web without the pressure of turning a profit. In a way it was the private sector equivalent of DARPA which allows scientists complete freedom to innovate. The Internet itself was one of DARPAs projects and in the same way I expect a lot of great businesses to trace their roots back to web 2.0.
The key concept from web 2.0 is individualisation, putting the user in control. Whereas before web 1.0 was about the passive user web 2.0 was about users engaging with the web and tailoring it to suit them. You hear a lot about advertising as a good or bad business model. It really depends on how you are implementing it. Mimicking old media and web 1.0 by trying to build a large user base then forcing ads they don’t really want to see on them as ‘payment’ for the content is not a good business model. What you should really be doing is finding a way of making the ad relevant to the individual user and showing it to them when they want to see it.
In that sense the company with the first web 2.0 business model was Google. It offered something genuinely different to advertisers – a snapshot of what a user was thinking at any one point – so that they could target their advertsing far more effectively. The reason none of the web 2.0 companies is making a profit is because they have rethought the service but not the business model. The company that cracks that won’t have to worry about any recession.
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Web 2.0 is just a tactic or feature set. Web 2.0 simply means a higher level of interactivity including user generated content. Web 1.0 was all about throwing up a brochure site or an e-commerce site where people could get information or make some transactions. The interactivity was lacking and there were certainly fewer outlets for user generated content. I don’t think Web 2.0 is going away.
It depends how you define it. I defined it as the period of VC backed experimentation with new services minus any pressing need to have a viable business model or make a profit. That era is over.