You might have heard of Web 2.0, but do you know what this new version of the internet means for your business? Get in step with the more collaborative, more interactive web of the future.

By Amanda C. Kooser

Web 2.0 is a nebulous term. It implies an upgrade, a better version of what has come before. It includes innovations in the ways we think about and use the internet. Just like the growth of Web 1.0 before it, this new incarnation of the net is set to change the way businesses function and how entrepreneurs interact with customers, employees and colleagues.

Web 2.0 is a people-oriented technology movement. Ease of use, social features, collaboration, fast-loading applications, interactivity, quick development times and real-time updates are all major trends. Instead of a million features packed into one expensive software program, you get smaller, sleeker online applications that aim to do just a few things very well.

A Computing Platform
The applications you associate with your desktop are moving over to the internet. Web-based e-mail is probably the most widely known and used application. Big companies like Google, MSN and Yahoo! all offer sophisticated online alternatives to desktop applications. “A lot of the Web 2.0 services have richer user interfaces. They look more like desktop applications,” says Ed Anuff, 39, co-founder of widget directory startup Widget box in San Francisco. Online programs have the advantage of being accessible from any web-connected device, giving them the power of portability and flexibility.

Even desktop workhorses like word processing and spreadsheet and presentation software are going Web 2.0.ThinkFree (www.thinkfree.com) is one example. Google Docs & Spreadsheets (http://docs.google.com) stems from Google’s acquisition of online word processor Writely. Documents can be imported, exported, shared with other users and published to the internet or posted to a blog. “The internet is the new super platform,” says Dion Hinchcliffe, founder and CTO of Web 2.0 consultants Hinchcliffe & Co. in Alexandria, Virginia. “All our productivity software, communications software—everything is moving to the web in better versions.”

Getting Interactive
Web users are coming to expect a level of interactivity and customization in the sites they visit—and social networking is one way entrepreneurs can provide this.

Web widgets—small programs that can be embedded into a web page—can help businesses build online communities within their sites. Eric Alterman, 44, is founder and CEO of KickApps (www.kickapps.com), a hosted platform launched last July that helps companies bring social net-working and user-generated content onto their websites using widgets. “Wecombine  Flickr, MySpace  andYouTube,” says Alterman. KickApps, which expects 2007 sales in the millions, handles video, audio and photos on hosted sites and lets users build personalized spaces while KickApps runs unnoticed behind the scenes. Individual widgets can be “stolen” by web visitors for use on their own sites or blogs, but they still link back to your business’ site. It’s a new twist on viral marketing that helps businesses take advantage of the human networking aspects of Web 2.0.“This is what the next generation of social networking means,” says Alterman. “The minute you deploy us, you deploy over the entire web.”

Collaboration Innovation
E-mail has become the default way for businesses to communicate and collaborate on projects, but lists of CCs, forwards, attachments and replies can become easily scattered. Near-Time (www.near-time.com), a hosted online collaboration service based in Chapel Hill, North Carolina, mixes wikis, blogs, group calendars and file sharing. It’s an open-ended, self-service platform that could one day be used for marketing, sales, tech support, customer service, product development and supply-chain management.

Now is a good time to pause and reflect on how your business functions online. But don’t pause too long—get out there and use the social, collaborative and productive innovations that are already available. Says Hinchcliffe, “The aftershocks of Web 2.0 are going to be enormous. The web is going to be woven into virtually everything we do.” So start weaving your own vision of Web 2.0 into the fabric of your business.