Everyone’s been taking a crack at this. I find it funny that we’re defining Web 3.0 when people can’t even agree on what Web 2.0 is. Nevertheless, I will take a shot:

“What looks cooler, <HR> or an IMG line?”

Web 1.0 was about websites, extending an offline activity into the online world. It was

1. Creating an online presence for an offline entity
   • Corporate websites, brocures, personal homepages
2. Selling offline goods and services online
   • Amazon.com, Ebay, and the vast majority of startups that went-under
3. Replacing an offline activity with a near-replica online
   • Online classifieds, Webmail, Finance (basically everything Yahoo did)

Because Web 1.0 startups are often linked to a physical product of some sort, their capital requirements were significantly higher. Venture financing was measured in the tens of millions $ which made the bust that much more colossal. Amazon and Ebay were the most pivotal companies in the Web 1.0 era, showing the world that online-selling was indeed big-business.

“My design is more W3C compliant than yours”

Web 2.0 is about applications and services sold as digital goods—they are the product in and of itself. You’re not there to buy or interact with anything physical. Usage is either entirely online, or it drastically changes the way you conduct a particular offline activity. It created

1. Entirely new activities that either didn’t exist offline or was very rare
   • Youtube, Flikr, Facebook “wallposts” and phototagging, Yelp
2. Drastic changes to traditional activities
   • Social networking, Google/Facebook groups, Half.com, Mint

Because Web 2.0 businesses are often entirely online, literally only paying for bandwidth and labor, Venture financing tend to measure in the teens or below $10 million, making startups that much more lucrative for the entrepreneurs. Many have argued that the key characteristic of Web 2.0 is the popularity of ad-supported free services. I believe the ad-supported craze is a side-effect of the migration towards digital goods products. The underlying cause is that as physical goods and services are no longer part of Web 2.0 businesses, ad revenue was the simplest way to monetizing a purely digital good. But to give credit’s where it’s due, Google was clearly the pivotal company in Web 2.0 by laying the groundwork and making online-advertising as serious business as TV commercials.

“How can I help you, help me?” (get paid)

Where does Web 3.0 go? I think it’s about business services. Changes will appear more on the business side and be more about how to enable smarter applications and services that are categorically the same as Web 2.0.

1. There will be a lengthening of the supply chain in the Web application business. There will be web applications and services created only to serve other web applications and businesses. If you think about it, today’s supply chain of web development is quite short: You source the labor, servers, software, and host and off you go. But this model results in a lot of re-work or un-specialzed work. File hosting and databases should be outsourced to lean up operating cost. User-accounts should barely exist in-house, but instead be a plugin which talks to some OpenID protocol or a dominant social network. “Wigitization” too should be outsourced. There are probably many other features and processes that should leave the hands of new application developers. This leads to a convergence of common features and capabilities across all internet applications. Amazon and Facebook are slowly pioneering this trend through their Web Services and Beacon/Application Platform products respectively.
2. A universal (micro)payment system will emerge that will further simplify the purchasing process and narrow the penny-gap. Ad-revenue cannot remain the only monetization strategy as some applications and services are fundamentally incompatible. Not all high-value products create a high volume of advertising inventory—particularly products which aim to simplify activities.

So there, I said it. Web 2.0 is not about AJAX and Web 3.0 is not about mobility or the semantic web. While technology enables us to imagine novel new products, the evolution of the web is not driven by what kind of features are offered—that’s a gradual slope as it has always been—but driven by shifts in industry structure.