Why it's time to dump the Web 2.0 sobriquet once and for all

Maybe it's a throwback to my childhood recollections of "duck and cover" school drills, but this nuclear winter Andreessen thing is still rattling around in my head.

First, the gloomy view: The economy is slowing down and so what's up with the increasingly pointless me-too social-networking apps getting link love these days on Techmeme? They're cute, but outside of the echo chamber regulars, who really cares? Let's be frank: The world does not need another social news aggregator or online scheduling assistant.

(Credit: CNET News.com)

Now, the slightly more optimistic view: This isn't the first time that caution is the byword, and it won't be the last. Silicon Valley survived the Internet bubble, so why should anyone believe that it won't get through another recession?

What's more, the tech business is doing well. And the recent run of earnings announcements from the likes of Intel, Apple, IBM, Google--and even Yahoo--suggests that while folks may not be buying lots of houses, they continue to buy lots of computers.

Still, there's no getting around the fact that advertising will be hit hard in any recession, and that would be bad news for the prototypical Web 2.0 start-up. Here's where it starts to get really interesting. The definition of your prototypical Web 2.0 company is undergoing a change from what it connoted in 2005. Browse through the roster of companies exhibiting at this week's Web 2.0 conference and you'll find enterprise-heavy names like IBM, Microsoft, Oracle, and Cisco-WebEx, among others.

We've seen this movie before. The history of the computer industry is chockablock with examples of smaller, innovative entrepreneurs shaking up the status quo to the point where the mainstream companies either figure out how to coexist in the new world order or pass the baton.

I don't know where we are in the transition, but there's no getting around the fact that the constellation of forces in software is shifting. Companies like Twitter still draw more comment in the blogosphere, but look what's happening with Web 2.0. We're now in a phase where bigger hardware and software companies with deep pockets are starting to predominate. (In many cases, because they buy up innovative start-ups to get into the game such as AOL-Beebo. Other times because they come up with new technology models like Microsoft's cloud platform push with Live Services and Live Mesh.) Lots of reasons behind the enterprise companies' interest but maybe it boils down to something as simple as companies just trying to stay relevant. Fact is that as more young people graduate into the work place, the new generations will import online habits they learned growing up into their work routines.

In a recession, they'll fare better in any storm than companies which don't have an apparent exit strategy, according to Barry Schuler, a former CEO of America Online and now a private investor.

"With social media, no one's figured out how to monetize things yet," Schuler said. "In a certain sense, it looks a lot like 1997. The hiccup will be if there is a recession. The least proven stuff, the companies that haven't decoded a business model, will be the stuff that gets dropped. If there's one thing we learned through the Internet bubble, you can say this is a new economy, but in the end, P&L does matter."

We're fast approaching a point where it's time to find a more fitting sobriquet. Better yet, maybe we should just dump an awkward marketing umbrella term entirely. It just gets in the way of clear thinking.

[cbk780]

I agree with your point that we are reaching the saturation point for social computing products that do not offer clear value add. But I may be more optimistic about the overall prospects for continued growth. Of course, if the recession is long and deep -- all bets are off.

The "me too" flood of Web 2.0 products is not a sign that we are at the end of the road for innovation. Web 2.0 has a long way to go before its possibilities are exhausted.

Web 2.0 is not merely a "marketing term" and it is a lot more than social computing as we know it today.

Web 2.0 became popular as a term because it resonated with people. Of course it has been used by people to sell their ideas. And when the market becomes saturated it shakes out. That's a good thing except if you happen to be part of one of the companies that goes under.

But Web 2.0 in not marketing hype. It is a true advance in the power of the web. And it is profoundly affecting the ways that organizations relate to their customers and the way that people collaborate and communicate.

We now have a technical environment that supports the development of rich Internet applications and a sizable proportion of the world connected by broadband. That combination is going to produce a lot of opportunity for years to come.

Monetization models for social computing have not be fully worked out. But the value created by networks of like-minded people is in the ability to communicate with them in a targeted way. Google has been quite successful at monetizing targeted advertising and companies are making a lot of money on the web. But I agree that most of the valuation of social networking companies is based on their perceived potential rather than their revenue streams. Where this differs from the dotcom situation is that the value proposition of bringing attentive targeted groups together is a pretty good one.

As I see it, we are on a path that will last several years. There will be blips of course and shakeouts. Some companies will expand, others will fail and new startups will continue to emerge because the cost of entry is low and people can try out their ideas.

I hope that the recession will not slow development too much. I am hoping that companies who see Web 2.0 as a way to get their messages out cheaper and smarter will place more of their marketing efforts into Web 2.0. And those companies that realize that the communication and collaboration aspects of Web 2.0 can increase their internal efficiency may be willing to invest in it as well.

As far as giving up the term Web 2.0, I would disagree. Companies need a way to distinguish their new social web activities from the Web 1.0 site they have now. What I hope is that people will become more aware of what the shift to Web 2.0 really means. Then they might be less susceptible to marketing hype and would make better decisions.

Best,

Charlie Kreitzberg, CEO
Cognetics Corporation

[The_Decider]

It has no meaning. It is not a technical term to describe a group of API's or anything remotely technical.

It is a meaningless marketing term to sucker the ignorant into thinking what they offer is anything new.

You said a lot to describe Web 2.0, but nothing you said had any substance, just more meaningless buzzwords. CEO? Why am I not surprised you are a business type?

[Tony McCune]

Well stated but I think the term Semantic Web has already become a part of our lexicon. The question I am asking is who will be the drivers on the cloud computing migration, social networking sites or the enterprise?
http://tmccune.blogspot.com/2008/04/whos-paying-for-cloud-computing.html

[Len Bullard]

Web 2.0 didn't have much meaning to begin with. It has less now.

We are entering the age of the Big Buyer. Dwelling on 'this or that next new thing' is a sign of market myopia. The aggregation is in central services to larger organizations and that doesn't mean it all goes to Google or BigServerFarmWinnerThisWeek. It means that the knowledge and skill to create a server farm is spreading out and becomes part of the skill set of any reasonably competent solutions company. With the concentration of standards into a graspable few, the RAD technologies have gotten much better. The smaller companies can build systems and sell them to bigger buyers who mandate their use more widely. Where once we sold to agencies, now we sell to states who are federally funded and must pass federal audits and reviews to spend that money.

This is not new. It is cyclic.

The second part is that the concentration of effort in Silicon Valley is coming to an end. To create new jobs in the rest of the States, the Federal government will incentivize research parks in emerging technical markets such as that growing up around Pittsburgh and other parts of the Rust Belt. This will pay off political debts and ensure that the VC wealth disperses more equitably.

The power of companies such as IBM to influence standards is waning. Once again, the smaller organizations with a focus on enabling strategies over disabling tactics are coming to the fore.

The power of small inner room technologies to link as home pages once did will emerge and combine with the mirror world technologies in a lumpy but practical 3D web. Social systems find their strength in smaller longer lived networks where the strength of the coupling is proportional to the age of the ties.

There will not be a singularity.

[The_Decider]

Web 2.0 has no meaning whatsoever, so what does it matter if idiots keep using a meaningless term?

[charlie cooper]

well put, len. the only possible quibble is about the federal government's interest in doing much to foster the "silicon valley-ization" of other regions. i haven't seen interest in making those sorts of investments - at least not in a big TVA-like way.

[cube3]

"The hiccup will be if there is a recession???"

IF??

the belch getting ready will be as loud as 1999s

second verse.same as...oh forget it.;)
good luck all.
\

[rossdawson]

Charles, yes absolutely it's time to move beyond Web 2.0. But your implicit suggestion in your diagram that we should call it Web 2.5 is ludicrous. We need a term with explanatory power and which can communicate to a broader community. My own suggestion for a successor is Wide Open Web (WOW). I've explained the logic here: http://rossdawsonblog.com/weblog/archives/2008/04/after_web_20_wo.html

[soma_king]

Good article. Though the idea of rolling back a buzzword is impossible.

The timeline you give is off. By 5 years. Should be 2010. Here's why: exponential growth of technology. You should half the number of years in each quantum. So 2004-2008-2010.

What's more: economic necessity will be a driver of change (i.e., innovation). So we'll know when "web 3.0" is here when there is a disruptive killer app that changes the rules of the game. All the foundation pieces are available today. We're waiting for somebody to put them together in a clever way.

I could tell you more, but then you'd have to sign an NDA.

[ploneglenn]

Thanks for this good opinion piece which I found insightful enough to blog on.

http://ploneglenn.blogspot.com/2008/04/by-any-other-name.html

What should the web 2.0 term be replaced with? Please post your suggestion as a comment to the above blog entry.

I could not agree with you more. Things are starting to get crazier now with references coming in to "Web 4.0".

See: Web 4.0 Is For Wankers: Stop The Madness!

http://onstartups.com/home/tabid/3339/bid/4980/Web-4-0-Is-For-Wankers-Stop-The-Madness.aspx

[Sridhar Vembu]

Great article. I believe there has been an over-reliance on advertising in much of the web 2.0 landscape. There is an assumption that advertising budgets will move online, commensurate with the increasing time consumers spend online, but that assumption may not hold.

[RLBrandt]

Well written, Coop. I think the term does have meaning and should be dropped, simply because it becomes a catch-phrase. Companies get funding just by claiming to be web 2.0, as they once claimed to be dot-coms -- although having the attributes of a web 2.0 company are easier to discern.

But we're again seeing the valuable and dangerous approach of creating companies and figuring out the monetization later, a strategy that can lead to a Google as well as a Friendster.

Recession is here, but at least it won't be another dot-com fiasco. That recession was led by the Y2K hoax, which first poured money into technology as every company in the civilized world upgraded computer systems, then dammed the flow on January 1, destroying the funding and stock market infrastructure. Now it's housing and general economic health. But in this recession, internet advertising will continue to grow, because it's the most cost-effective and measurable form of advertising around.

[viewrcorp]

The average user as opposed to the Tech Choir does not know what Web 2.0 is nor do they care. They also don't know that all the 2.0 widgets and Social Apps are W 2.0 and it doesn't matter. What is important is the improvement in the usability and user experience and all that goes unnoticed to make it happen. There will continue to be innovation by small orgs and startups and the Monikers Web 2.0, W 3.0 help us to get a handle on what is going on, where we have been and where we might be going. They could just as well be other monikers or sign posts. The future is happening and lost of little guys are making it so.

--- Karl Lingenfelder
www.viewr.com

[btrogdon]

For better or worse, most evolutions of technology have employed a sobriquet that builds on the previous naming convention, i.e, Telegraph > Telephone > Television > Telepresence > Teleliving, etc.

I think we are going to be stuck with a ?Web? sobriquet long past the point of it?s relevance to the actual technology or use.