Web 2.0 is Eco-Friendly

David Schatsky | December 01, 2005, 02:05 PM

Part of the excitement surrounding the Web 2.0 concept is over the promise of building businesses at low cost, with open source tools, that invite participation from users and thus draw their power from "network effects." But no matter how exciting these so-called Web 2.0 businesses are (and many are eye-opening in their innovation) they have one thing in common: they have no "true business model," as John Batelle recently acknowledged.

But they have an advantage that their Web 1.0 predecessors did not: a whole ecosystem of profitable, cash-rich Internet-centric companies (such as Yahoo!, Google and eBay) that are seeking new sources of growth and are eager to envelope these startups with business models that have survived the dot-com shakeout. With modest startup capital requirements, and modest prices paid for acquired companies (the low tens of millions for Flickr and Weblogs, Inc.. for example) Web 2.0 is a more "environmentally friendly" source of innovation than the cash-and-burn cycle of the Web 1.0 boom.