The New Wisdom of the Web

A little over two years ago, even the most sensitive entrepreneurial radar could not pick out two pairs of people on opposite ends of the West Coast starting companies that would make plenty out of nothing. In Santa Monica, Calif., dot-com survivors Chris DeWolfe and Tom Anderson were hatching the idea of taking on biggies like AOL and Yahoo with a Web site consisting only of stuff that people would bring to it. And up in Vancouver, B.C., married collaborators Stewart Butterfield and Caterina Fake were just figuring out that the online

game they were developing might work better as a way for people to share their digital photos with each other.

Now both fledgling companies are leading a charge of innovators making hay out of the Internet's ability to empower citizens and enrich those who help with the empowerment. The southern California guys head MySpace, the prime hangout for 65 million (mostly young) people, and thousands of rock bands, movie stars and marketers begging for their attention. Canadian-born Flickr, by building a 2.5 million-member community solely around a passion for sharing photos, has become a poster child on how a well-executed Net effort can make big changes in people's habits. Welcome to the new tech boom.

Oh, and unlike the old boom, where entrepreneurs couldn't get to the IPO broker's office quick enough, these crafty duos have already taken the money and stayed. Yahoo has snapped up Flickr to bolster the portfolio of services it offers to its half-billion users. And the new owner of MySpace is that wild and crazy (like, um, a fox) digital punkster, Rupert Murdoch--hedging his bets on what might be the next Net-powered media upheaval.

The massive success of MySpace and the exemplary strategy of Flickr are milestones in a new high-tech wave reminiscent of the craziness of the early dot-com days. This rebooting owes everything to the enhanced power and pervasiveness of the Web, which has finally matured to the point where it can fulfill some of the outlandish promises that we heard in the '90s. The generic term for this movement, especially among the hundreds of new companies jamming the waiting rooms of venture-capital offices, is Web 2.0, but that's misleading--some supposedly Web 1.0 companies like eBay and Google have been clueful about this all along. A more fitting description comes from Mary Hodder, the CEO of a social-video-sharing start-up called Dabble. (Since Dabble has not yet launched, I can't explain exactly what that means.) "This is the live Web," she says.

What makes the Web alive is, quite simply, us. Our presence, most often conducted at the speed of broadband, is constant and mandatory. Thanks to our activity, the Web has replaced phone books, and is in the process of replacing phones. It's the place that answers our questions in four tenths of a second and ships us funny clips that mix the "Back to the Future" guys with the "Brokeback Mountain" soundtrack. It's the main news source for the non-arthritic population, and a megaphone for those who make their own media. As we keep offloading our activities to the Web and adding previously unmanageable or unthinkable new pursuits, it's fair to say that our everyday exist-ence is a network effect. That has made some splendid opportunities for smart, nimble new companies, and threatened the existence of old ones now afloat in the mainstream.