Web 2.0: Waiting to burst?

As someone who is currently developing a “Web 2.0 application” (as if we know what that means anymore), whether or not Web 2.0 is another bubble is a question quite central to me. Some people believe that the more important question is whether or not Web 2.0 is relevant to the public. I don’t think that is really an issue. There are undoubtedly more people online now than ever and with sites like MySpace and Flickr receiving attention world-wide, I don’t see how Web 2.0’s relevance to the public could be a valid concern. Sure, 99% of the the new Web 2.0 contenders have not yet been “discovered” by the general public (and probably an equal percentage of websites actually will be discovered), but that doesn’t mean that Web 2.0 hasn’t already had an enormous impact on us already!

But the fundamental question remains: is the so-called “Web 2.0″ just another bubble waiting to burst? Personally, I don’t think it is a bubble in the traditional sense. As one startup C.E.O. in Techcrunch’s 24-minute Web 2.0 Documentary states, a lot of modern Web 2.0 companies are seeing acquisition as an easy get out of jail free-card. The reality is, only a handful of the hundreds of Web 2.0 companies will actually be bought-out. Del.icio.us and Flickr quickly come to mind, but I really believe that their situation will never be the norm.

I do, however, believe that in perhaps as little as a two to three years you will see a large fall-out of Web 2.0 companies. There just isn’t enough room for everyone. There can be perhaps two or maybe even three major competitors, but after that, there is just not enough room. I think we will start to see a lot of failing Web 2.0 businesses drop out of the market because of the saturation, not because their products are necessarily inferior. That said, I don’t believe it isn’t going to completely kill the core concepts backing Web 2.0, such as simplicity, enhanced user interaction through desktop-like features, RSS, and so on.