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'Dream applications' start to come true on the Web

Technology is catching up to the grand ideas of the pre-dotcom bust. Result: a new 'gold rush'

By Staff writer of The Christian Science Monitor / April 27, 2006



Ever since it sprang up a decade ago, the Web has held out the promise of creating new ways for people to work and play together. E-mail was a step down that road, but thousands of entrepreneurs dreamed about doing much more. The Internet "bust" at the turn of the 21st century wiped out all but the hardiest innovators and put those dreams on hold.

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Now the dreamers are back, and some say the Web is entering a new era when it will show what it can really do.

"For virtually every Web 2.0 success story, one can point back to a company in the Web 1.0 era [in the 1990s] that was essentially trying to do the same thing," says Kevin Werbach, a longtime e-commerce watcher.

"We finally realized we could now execute some of these great ideas we had in 1999," adds Alex Bard, the CEO of the start-up goowy.com, whose 100,000 users can send instant messages and e-mails, store and share videos or photos, and keep a calendar - all online. That means all these applications are available anywhere in the world, using a browser on any Web-connected computer.

Computer book publisher Tim O'Reilly dubbed the new era "Web 2.0," an allusion to the second version of a software program. Last September, he wrote an influential essay called "What is Web 2.0?" trying to describe it. While the venture capitalists who fund new Web businesses may already be tired of the term, Web 2.0 remains an elusive concept for most. Experts agree that something new and significant is stirring on the Web, changing the way we use it. But what is it? Try these definitions:

• The rebound of Web-based businesses after the dotcom bust, epitomized by perhaps thousands of start-ups.

• A social movement in which everyone on the Web is able to create and share content.

• A way to harness the collective intelligence of every Web user to create better products and services.

• An environment of swift, continuous innovation that taps ideas from anyone who wants to contribute.

All of these describe Web 2.0. In fact, any definition of Web 2.0 is "totally squishy," says Professor Werbach, who observes Internet commerce from Wharton Business School at the University of Pennsylvania in Philadelphia.

Web 2.0 is real, says Joe Wilcox, a senior analyst at JupiterResearch in New York. But "as real as it is, there's the question of what it is," he adds somewhat cryptically. "What we can say is we've moved into a new era of Web disruption" - enterprises shaking up the Web in innovative ways, Mr. Wilcox says. Web 2.0 has already produced some winning enterprises. Among them:

• MySpace.com has 65 million participants, mostly teens, who want to share interests, meet friends, join groups, and create their own online profiles.

• The 2.5 million members of Flickr.com post, describe, and share photos in a number of creative ways.

• Craigslist.org, the bane of newspaper advertising offices, offers online listings of jobs, goods, and more.

• At YouTube.com, anyone can post or view some 40 million video clips, with about 35,000 being added daily.

In some ways, observers say, the Internet is simply recovering from the dotcom bust, when overly enthusiastic investors got far ahead of what the Web could actually do. Now that feeling of unlimited potential is returning. "I'd say the gold rush is back on," Wilcox says.

The ideas may not be new, but the technical ability to carry them out is. And now, most Americans have a broadband Internet connection. It's always on and can display videos easily. The cost of storing files such as photos and video online has dropped dramatically.

Advertisers have become more comfortable paying for online ads (Web ads will surpass magazine ads in dollar value this year, says a new Merrill Lynch study), creating a stronger underpinning for Web-based businesses. Users have changed, too. The Web is populated more and more by "digital natives," young people who grew up using the Web and are comfortable with it, says John Palfrey, executive director of the Berkman Center for Internet & Society at Harvard Law School.

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