Who's Building the Next Web?

Deciphering the exact meaning of the phrase Web 2.0 is a popular parlor game in Silicon Valley. The expression can stand for many things--the kind of start-up that forges new connections among Web users, lets them share their tastes in music and video or simply exploits their creativity and participation in new ways.

In the broadest sense, the Web 2.0 moniker captures the renewed exuberance (perhaps irrational) in high-tech circles. There are so many start-ups, in fact, that inventive observers of the newly crowded business scene have taken to mashing all their logos together in one colorful and jumbled image, then posting their work to Flickr for others to appreciate (to see some examples, Google "logo 2.0"). So consider these standout firms below, which we've noticed in the past few months, some threads from the larger quilt.

Take everything you know about how a media company works and invert it. That's Digg. Founded last year by Kevin Rose, a former on-air personality on cable network G4, Digg is a techie news site that asks its users to be editors. Anyone can submit a link to a news story or blog entry from elsewhere on the Web (the site gets 1,300 submissions a day), and then users vote for or "Digg" in the suggestion queue the stories that they think should get promoted to Digg. Users can also subscribe to their friends' Digg lists, in effect watching over their shoulders as they read the news. "From the beginning, we didn't want any editors or moderators. We wanted to give all the power back to the community," Rose says. The company has 12 employees and plans this summer to expand beyond tech into other topics. Will its users Digg Britney-Kevin stories?

When Hans Peter Brondmo's father got sick in 1999, the Norway-born entrepreneur found himself, as many others do, using the Internet to research the illness. But a few years later, when he heard of someone else trying to learn about the same rare cancer, he found that he was unable to easily pull together the collection of searches, e-mails, documents and online conversations that comprised his quest. That gap was the impetus for Plum, a company he cofounded with his friend Margaret Olson that attempts to eliminate the boundary between your desktop and all the stuff you accumulate on a given topic, no matter where it's stored. Using a custom tool called the plummer, you can grab information from any available source--everything, including Web pages, pictures, podcasts and dynamic RSS feeds--annotate it, remix it with other things and save it in a collection. Then you can share the collection with others (individually or in groups) or even blog it as you go. There's also a social-networking aspect that connects you with those whose collections are similar. Plum hasn't launched its public beta yet, but you can go to the site and sign up in advance.

Gibu Thomas's two-year old Palo Alto, Calif., start-up offers something in addition to new photo-organizing software: a powerful idea. When you have a digital image, Word document or e-mail on one computer, you shouldn't have to send that file to another PC or your mobile phone. All your gadgets should synchronize seamlessly and invisibly, "so you're never even thinking about backing up," Thomas says. A veteran of Palm, he's been working quietly on the concept for more than two years with 25 employees in Palo Alto. This spring they'll launch a proof of concept: a digital photo organizer you load onto your PC, which automatically harmonizes all your computers and Windows Mobile devices so that your photos are accessible wherever you are. Ultimately, Thomas hopes to integrate Sharpcast into every software application, so that users never have to think about backing up files or synchronizing devices again.

In the mad rush to launch new Internet telephone services, Google, Yahoo and a range of start-ups are closely emulating market leader Skype. Not Jajah. The firm, with offices in Israel, Austria, Ireland and Silicon Valley, brings online rates to regular telephones instead of clunky PC headsets. Starting this week, a caller can go to jajah.com, enter his own number (landline or mobile phone) and the number he wants to call. The company's servers in Ireland connect the call over the Internet to switching stations in the cities of both caller and recipient, and two local calls are placed from there to the regular phones. The calls cost pennies per minute, and the phone companies don't even hate the service, since at least callers are paying local rates.

Chris Larsen does not want you to pay 14 percent interest on your next credit card. He also thinks that lending small amounts of money to regular folks is an investment opportunity that's hoarded by big financial institutions. So the e-Loan founder introduced Prosper. The San Francisco firm allows regular users to take out loans of up to $25,000. They register with the site, specify how much they need and propose a rate of repayment over three years. Lenders either compete to fund that loan, or don't touch it if the buyer's credit rating or reputation is too risky.

To improve their reputations, borrowers can band together in groups with their offline friends. Members of a PTA, for example, might join together to form a virtual credit union and can all vouch for each other's identity and standing. Groups build their status on the site over time, and the better their reputation, the lower the interest rates they can seek. Larsen thinks borrowers will be less likely to default on loans if there's a real-world stigma attached. Meanwhile, the 35-employee company performs all the background credit checks and takes a 1 percent cut of each loan from the borrower. If it can explain this tricky model to consumers, Prosper might do as its name describes.

For his latest creation, serial entrepreneur Bill Nguyen went to the Web 2.0 spice rack and took a few jiggers of MySpace social networking, a slice of iTunes and a half cup of Netflix, then blended it together in a stock rich with vintage Napster peer-to-peer sharing. The result is La La, a music-discovery site that lets you find new music and connect with people who share your taste. Then you ask them to send you their used CDs, a gift that costs you only a dollar each. You qualify for that bargain by sending one of your CDs to someone else (La La supplies you with shipping materials). Once you send a CD away, you are supposed to erase the tunes from your computer because you don't own them anymore. Despite the dubious likelihood of such rigor, Nguyen insists that the music industry has no problem with this. (La La kicks back 20 percent of revenues to the artists.) Currently La La is on an invitation-only basis, but plans an open rollout this summer.

The challenges and opportunities posed by the digital-camera boom minted a whole new generation of entrepreneurs, and Kyle Mashima was one of them. A former VP at software maker Adobe, Mashima looked at his digital camera and the early online photo services two years ago, and wondered if there was a better way to upload and share photos on the Web. FilmLoop is his answer. The company asks users to download a photo player, which sits on the desktop and scrolls images in a revolving horizontal slide show. Here's how it works. Go to the beach with some friends, and after you transfer your photos to your PC, you create a loop by dragging and dropping the images into the FilmLoop player. The images are uploaded to the Web, where your friends see them, get copies and add their own pictures, which in turn are added to your slide show. Or, users can put their cameras away and browse a general library of 500 photo loops of news, entertainment and groups of images that other users have publicly posted and tagged. The company makes money by inserting an ad at the end of a loop, before it starts over. Mashima has already scored some partnerships: eBay, among other firms, is using the tool to show shots of cars for sale on the auction site. Seeing pictures of classic De Loreans and MGs scrolling across their computer screens might entice even reluctant buyers.

As unlikely as this sounds, India-born Srivates Sampath is a huge Jethro Tull fan. On Mercora, the company's founder can choose from more than a dozen radio stations from all over the world devoted to the flute-favoring rockers. The site allows anyone to become a DJ. Download the Mercora player and, using your own music, you can program up to five radio stations, which Mercora's million other users can listen to any time they want. There are currently 60,000 stations to choose from--all user-programmed. It's legal, too. Mercora paid $35,000 last year in royalties to recording-industry trade organizations like ASCAP.