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Champions of Web 2.0 see a shift to more participation by the public

SAN FRANCISCO -- ''What year is it again?" asked the guy in front of me at the bar, obviously having a flashback even before he'd downed his first glass of wine. At the Web 2.0 Conference here last week, the calendar may have said 2005, but it felt like 1998 all over again.

Venture capitalists were once again dealing out business cards. ''Half of Sand Hill Road is here," said Venky Ganesan, a VC with Globespan Capital Partners, referring to the main drag of Silicon Valley investing. Attendees crowded the halls of the Argent Hotel downtown, trying to peek inside packed pitch sessions.

Entrepreneurs were touting the merits of creating a product and letting people try it before they devised a plan for how to earn money. The word ''eyeballs" (referring to visitors lured to a site) was once again uttered, unironically.

This time around, though, the battle royal involves Microsoft trying to squash Google, rather than Microsoft scheming to cut off Netscape's air supply. And while in the mid-1990s pioneering companies were still explaining why the Web mattered, pushing for broader adoption of high-speed connections, and trying to nudge transactions online, in 2005, most people understand that the Web is a pretty powerful medium -- whether for conducting business or for wasting copious stretches of time at StupidVideos.com.

The case being made by writer and entrepreneur John Battelle and publisher Tim O'Reilly, the two organizers of the Web 2.0 Conference, which gathers Internet and software innovators to show off their next-generation ideas, is that we're in the midst of another shift.

They see a second rev of the Web taking shape, one where it's much easier to participate. That could mean starting a blog or producing and sharing a snippet of video, or collaboratively working on a Web-based document. Wikipedia, a community-authored encyclopedia, is an example. It might also be by ''tagging" content, attaching words to describe an audio podcast, so that, for instance, someone might be able to quickly view every podcast that dealt with cars. Companies that grok the Web 2.0 ethos try to learn from their users to improve their products over time. They're often ''lightweight" companies, to use the Web 2.0 lingo, requiring just a little bit of funding and a few employees. Often, those employees rely on prefab modules and open source software in putting together a product.

''In the Web 1.0 era," said David Hornik, a venture capitalist at August Capital, ''when a company raised $10 million, they spent $2 million on servers from Sun, another $2 million on software from BEA, another $2 million on Oracle software, and then they'd have only $4 million left to actually build the thing." Now, companies can spend much less money on the necessary technical infrastructure, and more on realizing their idea, Hornik said.

(August Capital is, of course, on Sand Hill Road; Hornik is one of the first VCs to maintain a blog, at www.ventureblog.com.)

Web 2.0 companies seem to be concentrated in Silicon Valley, not Boston. Mike Hirshland, a general partner at Polaris Venture Partners in Waltham, told me he has been doing a lot of prospecting for deals on the West Coast and expects to finalize an investment in a Web 2.0-type company soon.

''You don't hear the term Web 2.0 much in New England," he said. The lone local company that was demonstrating its technology at the conference was Brightcove Networks, a Cambridge firm that is building a system to enable anyone to publish video on the Web and then make money when it's viewed, either by inserting ads or charging on a pay-per-view or subscription basis.

One reason is that Boston entrepreneurs and venture capitalists are oriented toward developing technologies that will appeal to corporate customers, not consumers. Web 2.0 companies like Flickr.com or Upcoming.org (both owned by Yahoo) are focused on serving consumer needs, such as, respectively, sharing photos or information about upcoming events. Even those geared to corporations, like Socialtext.com or 37Signals.com, approach the task from an unorthodox perspective, building a fan base among the lower ranks of a customer's organization with inexpensive products, rather than selling pricey software packages to the top IT executives.

Ross Mayfield, chief executive of Socialtext, calls this ''bottom up" adoption, where rank-and-file workers discover software that makes their jobs easier, and that software eventually spreads throughout the company. ''All great productivity applications -- e-mail, instant messaging, spreadsheets -- have not been brought into the enterprise from the top down," Mayfield says. ''They've done it from the bottom up." Socialtext, based in Palo Alto, Calif., sells software that helps employees collaborate on the Web.

Some worry that the term Web 2.0 is in danger of being overused, deployed by marketing mavens at start-ups to whip up the same kind of froth and frenzy that ''dot-com" did a decade ago. Tim O'Reilly, in kicking off the conference, mentioned that he'd found 10.7 million citations of the term in Google. ''We definitely are running the risk of another hype cycle," he acknowledged. ''Let's focus on the substance."

That will be a challenge. When Silicon Valley gets excited about a meme -- a Web 1.0 term for a new concept or idea -- like Web 2.0, everyone gloms on and dozens of copycat companies sprout up like Tribbles. But out of that process, important players sometimes emerge. There's also lots of wreckage, as we learned during the aftermath of Web 1.0. Google was just yet another attempt to build a useful search engine -- until it became something much bigger. Flickr seemed like just another photo-sharing site, until users discovered the value of adding descriptive tags to their photos, and sharing them with the wider community.

''Everyone gang-piles onto a concept," observed J.J. Allaire, chief executive of the Cambridge start-up Onfolio, which collects, shares and organizes online content, ''and maybe something good comes of it."

Scott Kirsner is a contributing editor at Fast Company. He can be reached at kirsner@pobox.com.

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