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That the Google juggernaut has unleashed is geared up to shape the future of the Internet. What is now bandied about as Web 2.0-a new way of producing and delivering sophisticated software, Web services and advertising via fast-loading pages-is yet to fully enter the popular chat-room discussion forums, but will be relevant to the daily surfer's life just about a year from now. And in just over five years, the "load, update, and upgrade" characteristic of Web software may become the anachronism "personal homepages" of yesteryear are today.

Jotspot is attempting to break into the corporate software business by offering "wikis"-encyclopaedic databases built by user contributions-as company intranets, with the bonus of offering quick development of custom applications using Web 2.0 tools.

This disruptive new version of the Web, now in its upward evolutionary curve five years after the heartbreaker dotcom burnouts, is worrying even Microsoft, enough to play a major role in shaping it. Simply because Web 2.0 has the potential to throw established industry business models into disarray. As Microsoft chairman Bill Gates said, "This next generation of the Internet is being shaped by its grassroots adoption and popularization model." In fact, Gates had identified RSS as a core Internet technology 18 months ago and directed it to be built into much of Microsoft software. Obviously, the Web 2.0 wave, is in Gates' opinion, not just evolutionary, but revolutionary in its very nature, with huge potential for computing and business.

The possibilities and realities of the Web 2.0 platform spawning a surge of innovation cannot be underestimated. Google has become the standard-bearer for this new generation of technology. The sophisticated software powering its search engine is accessed over the Internet, and also available as a service supported by advertising-a far cry from Microsoft's way of doing business.

Web 2.0 is also dismissed as a variation of the theme by the skeptics, but the possibilities for new start-ups building their business blocks on the foundation of this paradigm are immense.

But things will not be easy for Microsoft. Besides its struggling online advertising revenues, another factor to consider is that website development costs have fallen by at least two-third in the last three years. The Web 2.0 brigade, now working on shoestring budgets, is ratcheting up Internet services with mass market appeal-developing lean and mean software from standard technology building blocks which can be distributed quickly over the Web, with slickly packaged ad bytes welded in.

Right now, Microsoft's size is not exactly to its advantage in the battle against smaller, nimbler Web 2.0 players. The Web 2.0 paradigm holds inherent advantages for early starters like Google and Yahoo! who mastered the art of pulling information from the Web and pushing it to the surfer at the right time-something which Microsoft might find difficult to catch up with anytime soon.

And, open source software building blocks have further accelerated the Web 2.0 engine, enabling applications to be speedily constructed and ported on to the Internet. Web 2.0 companies are transforming the browsing experience where applications like Google Desktop Search can look and perform like programs stored on your computer hard drive. User participation and feedback continues to be crucial, especially that of the early users which can help refine these technologies quite early in the game.

Besides the online advertising revolution which Web 2.0 promises to fortify, the merger of Web applications with client-side preferences cannot be overlooked. Flock, a Web browser, was recently received with much fanfare in Silicon Valley for its ability to help users mix and match applications without being limited to any one vendor. Flock combines many tools associated with Web 2.0 with Firefox, an open-source browser competitor to Microsoft.

Google has been only too glad to play kingmaker to Web 2.0. By accepting ads from Google's network of advertisers on their own websites, many of the new Web 2.0 upstarts have been able to generate immediate revenue. Where the dotcommers could only collect "eyeballs" or "page views" and dream of finding the right business model for the Internet, Google supplied one right on tap. It is this arrival of advertising-supported, lightweight software, delivered over the Web, that has finally stirred Microsoft into action, not even the popularity of Opera or Firefox.

Clearly, Google's lightweight and standardized technologies have become the model for product development in the Web 2.0 world. Its innovations have crystallized the idea of Web 2.0 as the new Internet ahead. For example, earlier versions of the mapping services being offered by Google and Yahoo! Maps needed a steady mouse to click arrows which would enable the user to move around a city map. Soon, users could just drag around the city under their mouse pointer and double-click to zoom into the roof of any department store they were looking for.

Writely.com and Jotspot allow people to collaborate online in real time in order to draft a document. Jotspot is also seeking to involve corporates in the "Wiki" wave. Flickr.com, a photo-sharing site recently bought by Yahoo, and Rollyo, a "roll-your-own" customizable search engine, are among other start-ups piloting the technology shift.

Sadly, while Microsoft has been either a pioneer or early proponent of Web-based technologies such as Ajax and RSS, other companies have been more successful in harnessing them to create successful Internet services. As Ozzie warned, Microsoft is pitched against startups and established Web players like Google and Yahoo, with "tremendous software and services activity occurring within start-ups and at the grassroots level". Gates had made similar predictions ten years ago on the Internet's capability to change forever the landscape of computing and the need for Microsoft to adapt. It's another matter that Gates also dismissed the Internet's potential five years prior to that.

Though MSN has struggled to make money from search-based ad services, it is raring to take on Google and Yahoo! in right earnest. Adapting the Web 2.0 toolkit by embedding it in its technology and acquiring start-ups like FolderShare, an online file synchronization service, should help MSN close the gap with Google and Yahoo!.

But the fact remains that Microsoft's crusade for a piece of the Web 2.0 cake hinges on the fact that the upcoming battle will be more unequal than its Y2K demolition of Netscape-Microsoft is up not just against an end-user application like a rival company's browser, but against the combined open source developer base, as well as its own software development and distribution culture.

Living up to Web 2.0 ideals, will as Ozzie rightly suggested, mean a paradigm shift for Microsoft too. The threat is less, the opportunity more.

Ravi Menon

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