With the advent of Web 2.0, we continually see companies spring up using the power of network effects to disrupt traditional license model vendors. What we haven't seen is a shift to a sustainable revenue model aside from various forms of glorified advertising/market research. It strikes me that the very core of Web 2.0 is based on creating value by harnessing the power of networks but when companies attempt to extract value they either fail to do so or quickly become disintermediated.
I realize that Web 2.0 is the wave of the future but I would question whether the inability to harness revenue from new and innovative ideas will eventually lead to a decline in the number of companies entering the marketplace. Although I imagine it would be a nightmare to implement and enforce globally, could we see the entrance of government regulation to protect new ideas in the form of short term patents?
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I am with you Matt, all of the Web 2.0 technologies are about removing friction in the system, but that friction is what creates companies to make returns and develop further. While some disruption is healthy, hyper-disruption quickly makes all involved industries unprofitable and incapable of evolving further.
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