But letting what happened at the end of the year color our thinking could lead us to overlook impressive innovation and progress in Web start-ups and online technology in general. The glimmer of hope: more companies are hiring people than firing people--even though the overall number of jobs lost far outstrips jobs gained.
The Web 2.0 battleground remained not just a fight for users of services, but a fight for developers. Competing standards for online applications, media, identity, and social networks duked it out in 2008 and will continue to do so in 2009. Many of the battles put open-source standards--such as OpenID for identity--against "walled gardens" run by single companies.
Social-network giant Facebook, for example, has been strategically slow to embrace standards, opting for its own identity system (Facebook Connect) instead of embracing OpenID, and for its own application platform as opposed to the emerging Open Social platform.
This year Microsoft finally admitted that the traditional Office suite software concept is running out of gas and revealed that it's working on online versions of its productivity apps. However, in typical Microsoft fashion, the announcement predated the actual planned release of the product by months. Meanwhile, Google Docs improved--it's now a full suite with a word processor, spreadsheet, and presentation application. And Zoho rolled out lots of little cloud-based productivity and business apps on top of its online office suite.
On the browser front, Firefox version 3 launched, and easily blew by Mozilla's goal to be the app most downloaded in one day, even though the day got started late. Internet Explorer 8 also went into beta this year.
Many pundits predicted a widespread move of software to Web-based services, or the "cloud," and there was a lot of talk of application vendors using suites like Amazon Web Services to host their products. However, outages at Amazon Web Services and at Google's App Engine dimmed enthusiasm for the concept. Even though the outages were brief, the expectations for these infrastructure providers were immense. Other Web service and app failures this year included Twitter (repeatedly), Gmail (twice), Facebook, and Netflix.
Twitter got competitors the year with the emergence of business-focused services like Yammer, Presently, and Socialcast. During Twitter's midyear outages, the new social feed aggregator FriendFeed picked up Twitter's disaffected users. Twitter is running reliably again. Still, the company is still not making money, although the founders want people to believe they have a plan.
Also this year, Google added the capability for users to rank search results for themselves, but the rankings don't--yet--influence what other users see on search result pages.
Semantic search did not take off this year, as some expected. The highly-hyped PowerSet search start-up did not deliver its end-user product and was instead acquired by Microsoft. It remains to be seen what Redmond does with the technology. Cuil, founded by a Google ex-pat, launched another eagerly-anticipated natural-language search product, but at launch the service simply did not work.
The 2008 presidential election was watchable online in several ways, from clever apps to live-streamed debates on Current, Hulu, and the sites of more traditional television networks. A popular Twitter page showed the real-time zeitgeist during debates and during the election.
Speaking of voting, in CNET's annual Webware 100 awards, nearly 2 million votes were cast to pick the top Web applications. For the second year in a row, the top vote-getting social network was Gaia, illustrating the awesome power of the teen-girl demographic.
Finally, the Web left Earth in 2008. The interplanetary network that Vint Cerf envisioned years ago got its first real test.
The long goodbye: As Microsoft founder Bill Gates prepared to leave the CEO role at Microsoft, he gave several talks on the future of the company, technology.
Amazon suffered one of the Web's several high-profile outages in 2008 that shook confidence in Web 2.0 as a business platform.
Adobe Systems released Adobe Integrated Runtime software, a new cross-platform service that makes installing apps from the Web easy.
The major social network launches a music streaming service with access to millions of free tracks.
Facebook announced the debut of Facebook Connect, a new technology for members to connect their profile data and authentication credentials to external Web sites.
Microsoft scooped up Powerset to buttress its search efforts. It's not a replacement for increasing market share by acquiring Yahoo Search, but it gives Microsoft some differentiated search technology.
AOL is scrapping some online destinations but will push others harder in an attempt to improve its finances, according to internal memos.
Google challenger Cuil launched in blaze of glory. And it went down in a ball of flames. Immediately after launch, the criticism started to pile on: results were incomplete, weird, and missing.
Search giant Google launched its own browser to compete with Microsoft and Mozilla. After only 100 days and 14 updates, the browser was promoted out of beta.
special report After months of speculation and dalliance, Microsoft failed to strike a deal to buy out Yahoo.
Video content hub Hulu secured the rights to stream two presidential debates live on the Web.
A Microsoft blog reiterated that the Web-based version of Office won't be tied to either Windows or Internet Explorer.
Why we're glad that the Facebook/Twitter deal didn't go through.
Is Google's Chrome browser mainstream? Not quite, but it's doing better than we expected.
With the overall economy slumping, the tech industry is taking its fair share of hits.
special report Global economic troubles took their toll on the tech industry, including Web 2.0 companies.