I originally posted this under my secret alias...

There's been much discussion about Web 2.0, most of it in the form of heated, passion filled debate. Not unlike the classic Yankees vs Red Sox prose, with the predictable outcome of no winners (nor losers...), and not much reasoning behind any of its arguments, but a lot of emotions arrising from related associations - group identity, pride, taking comfort in the familiarity of the past.

So what IS wrong with Web 2.0?
Web 2.0 is an oxymoron.
I say this for several reasons:
First: Most companies that classify themselves as "web 2.0" are so similar to the "Web 1.0" crop of companies circa 1998, 1999, and 2000 that you wouldn't be able to tell the 1.0 from the 2.0 if we switched the company names and the copyright notice at the bottom of their sites/services/products/plans. In fact you might think in many cases that the 1.0 companies are 2.0 because they tend to be more populated with user focused benefit buzzwords ("uniquity", "stickiness") rather than pseudo technological terms ("ajax").

The complimentary argument holds water as well: most of the new internet companies that typically do not classify themselves as "Web 2.0" tend to be more mature, and advanced from a business standpoint, than those of the past, and in that respect could be coined as the next generation of web companies.

Second: It is also true, however, that the business models for internet services companies have not really changed. Advertising income is the basis for most revenue streams of web companies, and just like before: most such revenues derive from a revenue sharing plan with a big advertising budget aggregator that manages the ad placement/pricing/inventory processes and pays real estate rent to the traffic owners, who are in fact Value Added Resellers of the uber-ad-agency.

In this respect "Web 2.0" is an oxymoron since not much has changed. Surely textual ads based on content context and search terms have grown in popularity, and replaced in a lot of cases the rich media "punch the monkey" banners, scrapers, and what have we. But Bill Gross' GoTo.com (read "Yahoo Marketing Services") has been making revenues on this very model in 1998 and 1999. So what is the logical justification for coining the term "Web 2.0" around it? Is it simply the mix of textual ads versus media ads? Is it the change in the proportion of pay per click ads to CPM ads (both models were available in 1996 and are available in 2006)?

Is this change comparable to what we might call the black and white TV 1.0 to the color TV 2.0? Can we compare it to the radical shift in information consumption and availability that was brought about by the cable industry offering twentyfold viewing options than the state of television at the time when three nationals and some local stations offered their slew of programming?

Of course not. Flickr is a great idea, offering one of the nicest available photo browsing experiences. Tagging, interestingness, and beautiful UI all contribute to the great experience it offers. Its integration into Yahoo makes it even more valuable. And the community infrastructure it lays around the democratic topics created by users are all fabulous. It is much nicer than Yahoo Photos was, to be sure. But, to stick to the TV comparison, it is like comparing Seinfeld to Three's Company. Both sitcoms. One is, arguably, more entertaining, created a huge pseudo cult excerpt mumbling following (the other was vastly successful at the time as well), and the the creators' and actors' financial rewards were much greater. But was TV as a whole transformed to become TV 2.0 due to Seinfeld? I really don't think so.

Web 2.0, the term, is the child of the mistreated turn of the century internet industry. Mistreated because it was first overinflated and then over deflated.
In fact, founding an internet company in the years 2001, 2002, and 2003 was politically incorrect. Almost like walking around with a polyester suit.
This created a true need for legitimacy for the people behind newly budding internet companies.
But it is the very overinflation and obsession with classification that creates the inevitable over deflation that follows.

Now, as people are once again starting to think and converse in loosely coined terms, the inflation factor is starting to show again. The inflation, thus far, has been more applicable to concepts and terms than to actual market valuation (at least of private companies acquired).

So, the recent advances in web usability and applications are great, the new wave of social applications are exciting and useful, and innovation is blossoming once again. 

So what is wrong with Web 2.0? Nothing but the term itself.