Let’s take some big Web 2.0 players such as YouTube or Facebook. If there is one thing that the last past years have proved about these applications, it is that profitability is hard to achieve. Internet Evolution published an article last week about how YouTube will lose more than $2 millions a day next year. Not to talk about Facebook which is still not profitable. So what do they have? What gives Twitter, an application that allows people to post message of less than 140 characters, the right to refuse a $500 millions offer from Facebook? The answer, I think, stands in one word: hype. Web 2.0 applications gets their value from the momentum they have, from the number of users they gather, but it is a good way to value a company?

Lets consider a good old Web 1.0 application, Google. There is no doubt that Google achieved success, but not only in the way Facebook or Twitter achieved success, it is now a really lucrative corporation. So what does Google have that Facebook doesn’t have? I think the main difference lays in the foundation of the Web 2.0 movement: the interaction with the user. Web 2.0 websites are often more service oriented than a classic web application. By that, I mean that the application and the company behind it offers a service to the user in which they usually takes little to no place. For example, YouTube’s user will upload content for other users to watch and he will watch content uploaded by other user. On the other hand, if we take a website like Gamespot or IGN, then the company, which we could call the publisher, takes part into the user experience by creating most the content by itself.

So what does this means? From a user’s point of view, that usually means a less interactive experience. Web 1.0 applications have limitations which don’t exist in Web 2.0. Less interaction usually means less hype, and a shorter attention span. People go to Google to go elsewhere, or go on Gamespot to read. Once this is done, there is no reason to stay on the website. This is a totally unilateral relation. Web 2.0 applications offer a bilateral relation, where the user gets updates more frequently and can interact with other dynamic beings. It is the AJAX of user interaction. A world where the user is at the center and everything branches from him.

However, this is also the weakness of Web 2.0 applications. When in the center, the user often lose interest of the outside world. Targeting someone with advertising on Facebook may not be hard, especially with all the informations available, but the user isn’t there to buy. He is there to interact with other Facebook entities, which, as of now, are largely noncommercial. However, someone that goes on CNET to read on audio devices, or on Google to search for cars, is much more likely to click on an ad. Even if the attention span and the engagement is less, the value of these applications is in the relevance of the content and its commerciality. What could Facebook sells? Friends? Relations? No. With a website that focus on user generated content or social relations, it is really hard to target users effectively, because what they come to your website for is not something you can easily monetize. Especially through ads.

So what is the future of Web 2.0? My guess is Web 2.5: a Web 2.0 with a valid business model that takes advantage of the commitment of the users in their products. When this will be achieved, it may stop the rise and fall of the fragile MySpace, Facebook and Twitter of this world and give the final blow to Web 1.0.