Web 2.0 is here.

Here's an interesting and brief interview with Tim O'Reilly regarding the future of the web from Wired on line. He makes some interesting comments regarding the concept of owning data. And the true companies to watch in the next wave of internet companies.

WN: Are there any trends among the companies exhibiting at Web 2.0 Expo, the kinds of services and technologies being shown?
O'Reilly: Well, obviously this is a market with a lot of froth in it already. I have to say there are a lot of me-too products and companies. Yet another social network, of the 15th flavor -- that's common in every new technology revolution. There are imitators who have marginal improvements.

Working for a small consulting company, I see this all the time. People who think their dating site will be the one that catches on. People who believe having a successful web business is just a matter of putting up a page and watching the traffic roll in. I hate to say it, but while you were out, 20 other people came to the party with better ideas, business plans, experienced management teams, marketing plans, funding, and technology. And most of them left, shifted focus, or went bankrupt. If you're are depending on a photo site, dating site, portal, or social networking site to make a big splash you'd better be prepared to answer the question, What's your innovation? These sites were done 100 different ways three years ago and there are now clear market leaders. The next question is, What will keep the market leader from adjusting their business to address your innovation before you gain traction?

Later...

WN: So you think that (control of data) is actually more characteristic of web 2.0 than social networking or Ajax (asynchronous JavaScript and XML) interfaces?
O'Reilly: Absolutely. Anybody who thinks that this is about Ajax is completely missing the boat. I do think building rich internet applications is an important part of web 2.0. I don't want to dismiss it, because we are able to build richer application platforms today. But it's ultimately about network effects, and where do you build services that get better the more people use them? And it's also about the databases that get created as a result of those network effects.
As far as I'm concerned, web 2.0 is still in it's really early stages, and the reason is because the data isn't all owned yet. The network-effects play is about how you get increasing returns by everybody using your stuff, which is really what Microsoft did on the PC. Here we see it again, where these are winner-takes-all games. The internet looks like an open platform in the beginning, but once somebody gets a lead, their service gets better fast enough, if they've harnessed all the right levers, until it becomes a real barrier to entry. Why, despite many attempts, have we seen nobody able to dethrone eBay? Well, it's because there are network effects at work in auctions. You have a critical mass of buyers and sellers.
We're seeing that with Google AdWords -- it's just a bigger and better marketplace. There are these tipping points where these services really become monopolistic. We're still trying to move people toward really understanding what that new world looks like. I don't think a lot of people are there. A lot of people still think, "Oh, it's about social networking. It's about blogging. It's about wikis." I think it's about the data that's created by those mechanisms, and the businesses that that data will make possible.

So, what are we going to do with all that data? What service will you provide after you've have people at your site? What have you learned from your users?