The December 25 issue of Time reckons that online collaboration is changing the world as millions of people use the Web to publish blogs and podcasts, to share and communicate their thoughts and ideas with a receptive world. Time cites Linux, Wikipedia and MySpace as examples of ways that people are "wresting power from the few" and in the process changing the world order.
"The tool that makes it possible is the World Wide Web. Not the Web that Tim Berners-Lee hacked together (15 years ago, according to Wikipedia) as a way for scientists to share research. It's not even the overhyped dot-com Web of the late 1990s," the magazine says in arguing why it has chosen "You" as its person of the year. "The new Web is a very different thing. It's a tool for bringing together the small contributions of millions of people and making them matter. Silicon Valley consultants call it Web 2.0, as if it were a new version of some old software. But it's really a revolution."
Marketers and journalists have latched on to the Web 2.0 moniker with the same sort of fervour as that with which they hyped now-discredited concepts such as the "new economy" and "one-to-one marketing" in the dot-com heyday.
So, is the dot-com bubble back? Yes and no. Though there is enormous hype around Web 2.0, the share prices of most Internet companies - Google is a notable exception - are far from the orbital heights their peers reached in the late 1990s. Remember when Ariba, a business-to-business e-commerce start-up, had a market capitalisation of more than US$20bn? Today it's worth just $568m.
Sanity has returned - the Nasdaq composite index is less than half its March 2000 peak - but a few crazy deals still seem to be happening. Last October, for instance, online auction site eBay bought Skype, the Internet telephony company, for a whopping $2,6bn (that price excludes a potential further $1,5bn in performance-based considerations).
Then there was Google's acquisition of YouTube, the online video-sharing service lauded by the editors at Time as revolutionary. Many analysts questioned the deal, saying the price tag of $1,6bn was difficult to justify.
Those same analysts appear to have less difficulty justifying Google's share price. The Web search company's market capitalisation recently soared through $150bn, making it worth more than the venerable IBM. Google's share climbed above $500 a couple of weeks ago, with some analysts predicting that it could reach $600 soon. If the share continues climbing at this rate, Google could be worth more than Microsoft by mid-2008.
Yet Google's performance does not seem to point to a broader Internet frenzy. In fact, the shares of other Internet companies remain depressed. Google's biggest rival, Yahoo, has seen its share price tank 34% since the beginning of the year; eBay is down 26%.
There's little doubt that Web 2.0 concepts such as wikis (online collaboration tools) are having a profound impact, especially on a media industry that is struggling to adapt. Whether it will change the world in the way Time's editors suggest is another matter.
Berners-Lee, whom Time refers to, is not enamoured of the hype. In an interview in July, he warned that Web 2.0 is little more than a "piece of jargon" and "nobody even knows what it means".
"The idea of the Web as interaction between people is really what the Web is. That was what it was designed to be... a collaborative space where people can interact."
In other words, Web 1.0.
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