To paraphrase Bono, there's been a lot of talk about this next topic ... especially in Business and Entreprenuerial magazines lately.  It was certainly a topic of conversation at last night's Northwest Entrepreneur Network - Evening Seminar.  The topic of that seminar was actually Internet Marketing.  But the topic of this post is even more slippery. 

Web 2.0.  First, does it even exist?  Yes.

Three anecdotes that small-business owners shared with me last night. 

One hosts his site on Yahoo (or similar).  Part of this offering is free cross-platform (e.g. Unix/Windows) interop tools for download, and he gets tens of thousands of hits per month.  This seems like a minor example, but the key observation is this:  it's way easier to run such a site now than it was seven years ago.  In this case, he has access to a highly scalable web hosting solution (i.e. Yahoo) for little expense up-front, and little expense month-to-month.

The second anecdote:  an entrepreneur providing a content integration and management service for P/R people and market researchers.  Again, what's the difference in buliding his service now vs in the late 90s?  In his case, it's more about the ease of programming the interactive web:  AJAX. 

The third anecdote:  a great guy building a content/search site for kids.  I won't be more specific than that, but the point is this - he's learning PHP and MySQL as he goes, and it's coming along darn fast.  Consider the power and quality of those tools, and then consider the fact that they're free.  That just didn't exist in 1999.

In summary, here's what Web 2.0 means to me.

1.  Technology.  Web and internet related technologies have come a long way.  I can give more examples:  look how Java and Flash have evolved.  Python.  And don't underestimate the importance "tech support" via searching the web.  In summary, the tools have improved, and they're free.

Another technology factor:  cheap servers.  You can buy a Sun box with Linux for $1000, ready to run Apache!  How much did a system of the same relative power cost during the Internet bubble?  I don't know, but I bet it was 10 to 20 times that.

2.  People.  More programmers have been trained on the technologies required to start and run an Internet business.  The training came from Universities and then from their first few jobs at big companies.  The gradually increasing accessibility of an overseas, talented labor pool (e.g. Computer Science PhDs in China) has steadily driven down the cost of getting this type of work done.

3.  Money.  I've read that Venture Capital is flowing again to internet related companies.  Ironically, as we've observed above, these companies can now get much farther without big funding.  But less risk can be a good thing.  And anyway, when it comes time to scale up the company in a big way, you still need big funds.

So the final question is this - is Web 2.0 simply evolution - Moore's law, a global workforce with an evolving skillset, the steady advancement of Information Technology?  Or is Web 2.0 really the 2nd internet revolution?  I say Evolution.  That doesn't mean it's not interesting.  But the changes above aren't revolutionizing business with a big loud bang.  That was Web 1.0.  Web 2.0 is an evolution of the Web 1.0 business model:  more ideas, more competition, less risk.  And best of all - no bubble!