Web Squared: Web 2.0 Five Years On

Special Report

By Tim O’Reilly and John Battelle

Co-ProduCed by

web2summit.com

Contents

Disclosure:

Via our venture investing arm, O’Reilly AlphaTech Ventures, O’Reilly is an investor in threeo the companies mentioned in this article: Wesabe, AMEE, and bit.ly

Web Squared: Web 2.0 Five Years Onweb2summit.com

ive years ago, we launched a conerence basedon a simple idea, and that idea grew into amovement. The original Web 2.0 Conerence(now theWeb 2.0 Summit )was designed to restore condence in an industry that had lost its way aterthe dotcom bust. The Web was ar rom done, weargued. In act, it was on its way to becoming arobust platorm or a culture-changing generationo computer applications and services.In our rst program, we asked why some com-panies survived the dotcom bust, while others hadailed so miserably. We also studied a burgeoninggroup o startups and asked why they were growingso quickly. The answers helped us understand therules o business on this new platorm.Chie among our insights was that “the networkas platorm” means ar more than just oering oldapplications via the network (“sotware as a service”);it means building applications that literally get betterthe more people use them, harnessing network eectsnot only to acquire users, but also to learn rom themand build on their contributions.From Google and Amazon to Wikipedia, eBay,and craigslist, we saw that the value was acilitatedby the sotware, but was co-created by and or thecommunity o connected users. Since then, powerulnew platorms like YouTube, Facebook, and Twitterhave demonstrated that same insight in new ways.Web 2.0 is all about harnessing collective intelligence.Collective intelligence applications depend onmanaging, understanding, and responding to mas-sive amounts o user-generated data in real time.The “subsystems” o the emerging internet operatingsystem are increasingly data subsystems: location,identity (o people, products, and places), and theskeins o meaning that tie them together. This leadsto new levers o competitive advantage: Data is the“Intel Inside” o the next generation o computerapplications.Today, we realize that these insights were not onlydirectionally right, but are being applied in areas weonly imagined in 2004. The smartphone revolutionhas moved the Web rom our desks to our pockets.Collective intelligence applications are no longerbeing driven solely by humans typing on keyboardsbut, increasingly, by sensors. Our phones and cam-eras are being turned into eyes and ears or applica-tions; motion and location sensors tell where we are,what we’re looking at, and how ast we’re moving.Data is being collected, presented, and acted uponin real time. The scale o participation has increasedby orders o magnitude.With more users and sensors eeding more appli-cations and platorms, developers are able to tackleserious real-world problems. As a result, the Webopportunity is no longer growing arithmetically; it’sgrowing exponentially. Hence our theme or thisyear: Web Squared. 1990–2004 was the matchbeing struck; 2005–2009 was the use; and 2010will be the explosion.Ever since we rst introduced the term “Web 2.0,”people have been asking, “What’s next?” Assumingthat Web 2.0 was meant to be a kind o sotwareversion number (rather than a statement about thesecond coming o the Web ater the dotcom bust),