Is Web 2.0 already on its way out?

Analysis: Demo Fall 2008 gives indications that its social networking and ubiquitous connectivity business assumptions are wrong

At a conference that devoted much of its attention to celebrating the rise of collaborative platforms, media, and technologies, you had to wonder if the "Web 2.0" collaborative future would die before it really began. That was my takeaway from the Demo Fall 2008 conference in San Diego, which gave 72 startups six minutes each to show their stuff, usually in beta form.

Most of the startups focused on collaborative technologies, from the still-popular but overcrowded photo sharing and contacts sharing services to the more intriguing ones such as Qtask's eponymous online project collaboration suite in the business space and MixMatchMusic's self-named service for musical collaboration, which is meant to let artists work together and then share in revenues from their works.

I was struck by how obvious and redundant many of the startups' ideas were. For many, the goal was to own a social channel -- such as document sharing, photo sharing, contacts sharing, music sharing, or video sharing -- and somehow ride the social networking/Web 2.0 buzz to profits, usually based on ads. Never mind that Web 2.0 stalwarts such as Facebook haven't been able to do so. Or that such sites are a dime a dozen today, all vying to be your only hub for whatever information they store on your behalf. Or that they all seem to assume that people really do want to watch every video ever made or see every photo ever taken. Many of this ilk seemed like last-gasp attempts to get on the Web 2.0 bandwagon before the VC community moved on.

In separate presentations, Demo executive producer Chris Shipley and AllThingsD.com co-executive editor Kara Swisher noted this gap, and both suggested that the "hanging out" type of Web 2.0 environments like Facebook and MySpace wouldn't stay relevant much longer. In their place, Shipley predicted the rise of "collaboration for a purpose" sites and services that would come with lucrative business cases. Sites like Facebook certainly were critical for showing that the Web was about more than informational pages and transactions, but they wouldn't have the same financial effects as either of the previous Web generations, she said. The purposeful sites she saw emerging would have that impact, Shipley proposed.

Swisher noted that two underpinnings of many of the Web 2.0 startups were in doubt: advertising and ubiquitous connectivity. She noted that the poor economy, which is likely to remain that way for some time, made advertising a risky basis for business success. And she said that poor wired and wireless broadband speeds and coverage, coupled with its very high price compared to the rest of the world and the moves by carriers to limit user bandwidth usage, made it risky to base a business on ubiquitous, fast, cheap broadband coverage to carry all that data, video, and audio.

Still, there were some indications of a change toward purposeful collaboration, Shipley predicted. Compared to two other project-collaboration services at the Demo Fall show, Qtask's project service seemed to be viable, covering not just shared documents and messaging but actual project management tools to track schedules, approvals, and assignments. Given how much time people spend in e-mail anyhow, it's unclear whether they can be convinced to use such a service and not fall back to sending out mass e-mails to project participants instead.

Another example was Cinergix's Creately, an online business process modeling tool that, in Microsoft Visio fashion, lets you diagram processes such as network design or mortgage approval workflows, with embedded rules that let you validate the process as you diagram it. Such tools have long existed, but not in a collaborative Web environment in which users can propose their own business logic.

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Galen Gruman

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