Tuesday, December 05, 2006

Another Buzzword flogged to death: Web 2.0

Having gone through a few VC interviews, I have learnt that Venture Capitalists tend to cut through the jargon and look beneath the hood where it comes to things like "Web 2.0". And I have been asked quite a bit about my opinion on this latest buzzword sweeping the tech industry.

So I thought I would put together a simple primer for the uninitiated about what really is this Web 2.0 and what it means in terms of investment opportunities. Most of us know these concepts in bits and pieces. I am just trying to put them together in a short tutorial. And this tutorial is by no means exhaustive.

Identity
First of all, 2.0 is simply the software way of saying, updated. Web 2.0 is defined as the next version of internet infrastructure and applications. It was first coined by O'Reilly Media and John Battelle as a set of principles:

Value System
1. The web is a platform for the new wave of applications
2. Data will be the driving force for this wave
3. Social Participation will leverage this data to create immense network effects
4. Distributed development (read open source) of applications (widgets) will hold sway
5. Business models will be based on services rather than products
6. Applications will always stay in "beta" mode (no version system)
7. The long tail will create immense revenue opportunities

Key Technologies that prop it up
1. AJAX - a web-development technique that makes the page more responsive by not reloading completely everytime a user-interaction occurs. For ex: Geojoey.
2. Mashups - A technology that interfaces two different site functionalities into one service. For ex: "http://www.housingmaps.com/">Housing Maps.
3. RSS/Atom - Used in combination with feedreaders to check for updates on RSS-enabled websites (Content feeds). This allows the users to find out if their content sources have been updated. You can add my blog to your feedreader by bookmarking this.
4. Blog - This is not as much a technology as continually updated diary. The ease with which this could be created and used led to an explosion of content on the Internet. There are many variants of it (vlog (video logs), mlog (mobile logs) etc).
5. Folksonomy - The technique of categorizing content by making the users "tag" the content with "tags" (keywords). The social nature of this technique leads to a very efficient information retrieval system. Most Web 2.0 sites work on this principle. For ex: You can search on YouTube by clicking on the tag related to your interests.

The Newsmakers
I will categorize the companies in this realm in terms of various functional buckets. However, this is going to be a 30K feet view of the web 2.0 world. In fact, some of these can be placed in multiple categories.
1. Ecommerce (goods, services or classifieds) - eBay, craigslist, Judy's Book, Zillow
2. Content - Wikipedia, Flickr, Geojoey, YouTube, Last.fm
4. Retrieval Infrastructure - del.icio.us, Digg
5. Advertising - Adsense
6.Communications - Skype
7. Applications - Google Docs, Netvibes
8. Collaboration - Socialtext, Basecamp
9. Blogs - Technorati, Bloglines, Jotspot
10. Social Networking - LinkedIn, facebook, MySpace

All in all, Web 2.0 means different things to different people. The impact of this new wave of technology is being seen all over the Internet, and this probably brings us closer to the original vision of the Web being a completely democratic, open, and free network. We shall see where this ends up.

And then a little bit of whining
On another note, I can safely say my recruiting season has finally started. And it has been weird to say the least. I am getting calls from VC firms, they talk to me, nothing (that I know off) goes wrong, things look good, there is the usual, "We will bring you into for another discussion sometime soon", and then poof!
What exactly does sometime soon mean? I am not sure but from what I have heard, it could be weeks, months or tomorrow. The result? I sit around not sure whether I am doing well or not. If this is not wallowing in ambiguity, I am not sure what is.
Oh well...We shall persevere. This is SO much fun!

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