Since I have been working on WinForm applications and technical infrastructure projects (yeah real sexy!) for the last year and a half I have not really paid much attention to the whole Web 2.0 debate and hype. Recently I have started to look at web projects again and I came across a good, short explanation of where the money is in Web 2.0 and how it is different from Web 1.0. Now I understand why Google bought YouTube for $1.65 bn, if you do the math then it turns out that they really didn’t pay that much per user and each user of YouTube contributes value to the whole.
Basic (flawed) Web 2.0 definition by me: web as a platform for user interaction using data collection and aggregation as the driving force. There is a full explanation on Wikipedia but Ajits blog post made it much clearer for me.
I believe that most of the cause of the Dot Com crash can be derived from the differences between Web 1.0 and 2.0. Most companies and individuals back then failed to realise that the web was an extension of their physical business. We thought that we were building Web 2.0 but we were just extending the reach of our existing business onto the Internet. The Web 1.0 failures that I have seen up close were caused by insufficient logistical support in the physical business, we still need all the infrastructure and logistics of a book store if we want to be Amazon. During the Dot Com Hype we thought that getting the visitors and the orders would automatically solve all our other problems, well they didn’t! Web 2.0 is the approach that we should have been using… Get rid of the physical product, use the enabling of social interaction as the value you provide to your users and also as the value that you create. Find someone who either wants to target your users for advertising (Google), wants to partner with you for selling related products (YouTube) or who can use the data that you provide as input into their business (Swedish Lunar Storm).