In some American cities, Craigslist, a largely free Internet listing service, has displaced more than 50 percent of the classified advertising revenues of the local newspaper. Since the average metropolitan daily would lose money without classifieds, Craig Newmark and his two dozen employees are well on their way to upending an industry.
Elsewhere on the Internet’s new frontier, dubbed Web 2.0, Wikipedia gets 1,000 page views per second while traditional encyclopedia companies struggle. And then there’s Napster. For companies in the cross hairs, Web 2.0 competitors can be lethal. But why would anybody else care? It is not as if Craig Newmark, Jimmy Wales (the founder of Wikipedia), or Shawn Fanning (Napster’s creator) got rich in the process.
These glitzy exemplars of the new “new economy” are interesting less for what they are driving than for what is driving them. They are bright paper boats floating on much deeper currents. It is the deeper currents that have wider application.
Web 2.0 is often described as an exciting set of new technologies: RSS, AJAX, SOAP, and so forth. These are cool: they change the Net from a noun (static Web pages) into a verb (services delivered over the network, through the browser). But the deeper technological current is simply the uninterrupted progression of Moore’s Law and its correlates for storage and bandwidth.
As computing and storage and transmission become arbitrarily cheap, it does not matter where the data are kept or where the code is executed. Client and server become interchangeable peers. The network becomes the platform—an infinitely large platform that nobody really owns.
Implicit in these abstract statements are the two basic (and quite distinct) phenomena that characterize Web 2.0: the empowerment of the periphery and loose modularity.