When I wrote yesterday about the Browser as VM, I made the point that extensibility is difficult as we have four major browsers and multiple OSes to deal with. What Web 2.0 company is going to be willing to bet on a proprietary extension implemented in only one of those combinations? Not many if any I would guess. However, there is one option that works across all those browsers and OSes: Macromedia (now Adobe) Flash Player.
Unlike the browser, where AJAX is a relatively new idea, Flash has been positioning itself as a platform for nearly four years. Instead of AJAX, Macromedia coined the term Rich Internet Application or RIA. RIAs share a lot in common with AJAX in that they are downloaded on demand, execute arbitrary script code and can retrieve data across the network. But the most interesting commonality that Flash has with the browser is that runs across multiple browsers and OSes.
In platform portability, Flash has succeeded where Java failed. I haven't done enough research to know exactly why yet, but I suspect that it's because Java tried to be a complete portable environment on day one where Flash focused on specific functionality that weren't possible any other way - so called "skip intros" - and grew up from there. In other words, Java tried the top-down approach and Flash tried the bottom-up approach. I'm not surprised bottom-up worked and top-down crashed and burned.
While the modern browser has evolved to make it a capable platform, it still lacks some capabilities that Flash has. Most notably support for rich media. Thus, sites like Pandora, Google Video and MTV Overdrive need the capabilities provided by Flash.
While it's hard to imagine enhancements to the browser due to the difficulties across four browsers and multiple OSes, improvements to Flash are easy to imagine. According to Macromedia, Flash has 98% penetration. Even more impressive is that Flash reaches 80% penetration with new versions of the player within 12 months.
Check out this post from Kevin Lynch for more on Flash for Web 2.0 companies. So far, the only Web 2.0 company I know about (which is to say I'm sure there are more out there) is Goowy. Which ones am I missing?