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Web 2.0 was born out of the need for sharing and participation. The Internet era brought about by Web 2.0 is more democratic, provides a richer user experience, and is characterized by seamless collaboration among users all over the world through UGC. From social networking sites to SaaS, Web 2.0 impacts the life of millions of people who log on to the Internet every day.

Web 2.0 has heralded the consumer-led era. Collaboration and participation have led to the rapid proliferation of Web 2.0 technologies. The most popular among them have been social networking sites and blogs. The two have been credited for making the Web a more personalized experience for users. Millions of people are using social networking sites and blogs as an expression of empowerment in a knowledge economy. Video sharing is another Web 2.0 application that is witnessing huge uptake. Google's acquisition of YouTube in 2006 and attempts by several other software bigwigs, such as Microsoft's interest in Facebook, is reason enough to believe that user-created online video is surging in popularity. Multi-billion dollar deals are the norm for UGC websites and are a testament to their popularity.

Web 2.0 has many offerings on the professional front too. RSS has positioned itself as a popular and high-value technology as it allows people to stay updated on their topics of interest. SaaS and PaaS are also growing rapidly. Services such as PayPal have made a significant impact as they facilitate monetary transactions anywhere, anytime. Mash-ups have emerged as the new baby of Web 2.0 and have added a new dimension to the way people search for information on the Internet.

The user engagement generated by these sites is also creating opportunities for marketers, who are turning to these mediums to reach out to their target audiences through personalized advertisements. Selective advertising has become the norm with intelligent programs taking care of selective advertising. Social networking sites have cashed in on this trend, but have recently been showing signs of slowing down. Monetizing other aspects of Web 2.0 is still a challenge. Apart from advertising, there seems to be a lack of concrete and sustainable business models to generate money from these websites; at present, Web services such as SaaS and PaaS seem to be filling in the shoes.

Analysts believe that Web 2.0 is still evolving and has much more in store to offer. For the wealth of opportunities it provides, it will continue to attract the attention of businesses and consumers alike.

Web 2.0 refers to the second generation of Internet services, which has made the Web a collaborative and interactive platform, and transformed it from a read-only to a read-write medium. Popular Web 2.0 technologies include social networking sites, blogs, really simple syndication (RSS) feeds, wikis, mash-ups, podcasts, and widgets.

Since Web 2.0 empowers the masses by giving them an opportunity to create content, it has found unprecedented levels of engagement with the Internet. Web 2.0 technologies have exhibited strong growth over the recent years and are expected to keep up the momentum in the coming years.

Advertisers have found a great way to connect with consumers through UGC sites. Social networking sites, in particular, have been the target of most advertisements. Blogs and video sharing are among the other technologies that have found favor with consumers.

Another recent trend is that of UGC gradually migrating to the mobile platform as mobile handsets have evolved into devices capable of supporting a wide range of data functions.

Our partners at Analysts Perspectives present an update on the global Web 2.0 market through analyst observations, opinions, and forecasts.

Some key findings include the prediction that user-generated content (UGC) advertising spending in the US is expected to reach USD 824 million in 2012, representing 1.62 percent of the total online advertising spending in that year; total global revenues for mobile social networking/UGC are expected to shoot up from USD 1.8 billion in 2008 to USD 11.2 billion in 2013; and global spending on Web 2.0 will surge over the next five years to reach USD 4.6 billion by 2013.