From,

What Is Web 2.0 Design Patterns and Business Models for the Next Generation of Software

by Tim O'Reilly
09/30/2005
The concept of "Web 2.0" began with a conference brainstorming session between O'Reilly and MediaLive International.[in 2003]
[Web 2.0 "tools"
  • Google
  • Flickr
  • Bittorrent
  • Napster
  • Wikipedia
  • Blogging
  • Wikis
  • Tagging (folksonomies")] - excerpt

You can visualize Web 2.0 as a set of principles and practices that tie together a veritable solar system of sites that demonstrate some or all of those principles, at a varying distance from that core.

The central principle behind the success of the giants born in the Web 1.0 era who have survived to lead the Web 2.0 era appears to be this, that they have embraced the power of the web to harness collective intelligence:

The "blogosphere" can be thought of as a new, peer-to-peer equivalent to Usenet and bulletin-boards, the conversational watering holes of the early internet. Not only can people subscribe to each others' sites, and easily link to individual comments on a page, but also, via a mechanism known as trackbacks, they can see when anyone else links to their pages, and can respond, either with reciprocal links, or by adding comments.

If an essential part of Web 2.0 is harnessing collective intelligence, turning the web into a kind of global brain, the blogosphere is the equivalent of constant mental chatter in the forebrain, the voice we hear in all of our heads. It may not reflect the deep structure of the brain, which is often unconscious, but is instead the equivalent of conscious thought. And as a reflection of conscious thought and attention, the blogosphere has begun to have a powerful effect.

The world of Web 2.0 is also the world of what Dan Gillmor calls "we, the media," a world in which "the former audience", not a few people in a back room, decides what's important.

As noted above in the discussion of Google vs. Netscape, one of the defining characteristics of internet era software is that it is delivered as a service, not as a product. This fact leads to a number of fundamental changes in the business model of such a company:
Operations must become a core competency
Users must be treated as co-developers,

But as with many areas of Web 2.0, where the "2.0-ness" is not something new, but rather a fuller realization of the true potential of the web platform, this phrase gives us a key insight into how to design applications and services for the new platform.
To date, iTunes is the best exemplar of this principle.

Let's close, therefore, by summarizing what we believe to be the core competencies of Web 2.0 companies:
  • Services, not packaged software, with cost-effective scalability
  • Control over unique, hard-to-recreate data sources that get richer as more people use them
  • Trusting users as co-developers
  • Harnessing collective intelligence
  • Leveraging the long tail through customer self-service
  • Software above the level of a single device
  • Lightweight user interfaces, development models, AND business models