What's next for the Web

At the TechNet Innovation Summit held at eBay’s conference center in San Jose, Charlie Rose is holding all day taping of several programs. Technology and Web 2.0 was the subject of the first taped panel, with Marc Benioff, CEO of salesforce.com; Bill Cobb, President of eBay North America; Reed Hastings, CEO of Netflix; and Chief Yahoo Jerry Yang. 

Yang said that Web 2.0 is starting to mean a lot of things. The Internet has gone from being a basic way to publish Web sites to dynamic services and applications, Yang said. "Companies small and large are building great applications, which are more open, and individuals are becoming publishers. Voice, video and data are converging....and the consumer is becoming the programmer, choosing what to see, and when and how to see it." 

From left: Marc Benioff, CEO of salesforce.com; Bill Cobb, President of eBay North America; Reed Hastings, CEO of Netflix; Chief Yahoo Jerry Yang; and Charlie Rose.

Yang said the big question for Yahoo is whether the company can be first and fastest to enable consumers to become more powerful, at the center of the online world.  Yahoo has been focused on user-generated content and building out it social networking environment. "It's still a vision. The fastest company to create that environment will be the most sustainable. We have to get there first.

Netflix's Hastings focused on how broadband is at the core of defining new Internet experiences and business models. He characterized Web 1.0 as the  age of dial-up, Web 2.0 is the age of mid-broadband (1 to 2 megabytes per second) and Web 3.0 as 10 megabytes per second.  He predicted that within three to six years, 10 megabytes into the home, capable of downloading full movies, in the U.S. will be possible.  

Hastings also brought up the disruptive nature of the Internet, citing the move away from "channelized" entertainment environments. "People who operate the channelized environments are fighting for it, and the forces of freedom are fighting back, using the Web metaphor to redefine the entertainment experience."  A wrecking ball has disrupted telcom and music, and books, movies, video games ripe to be changed he said. Netflix, with its popular snail mail-based DVD service, is obviously trying to figure out how it will transition to a new delivery medium.

In keeping with offering perspectives that reflect their businesses, eBay's Cobb said that Web 2.0 provided a way for people to express their views and start own business. eBay provides the means for over 250,000 small businesses, he said. He also pointed to the convergence between buyers and sellers, which is a specialty of eBay, as a new model for enabling "freedom" for both consumers and businesses. 

And, Marc Benioff talked about Web 2.0 as a driver of new companies and technologies, predicting that ten years from now everything will be driven as service over the Internet, creating a "dial tone to do everything in your life." Benioff also called distribution across the Internet the "great equalizer."

The panel agreed that AJAX technology, as well as Flash, is leading the charge in creating powerful graphic interfaces for Web applications. Benioff noted applications like Zimbra, Writely and others, and added that each of them already has ten clones--somewhat of an exaggeration but to the point on the amount of innovation, some copycat, occurring globally around the idea of next generation Web applications.

No panel about technology is complete without mentioning Google, and Rose asked the panel to comment on the ongoing industry and market obsession with Google. Hastings chimed in, saying: "Google is something to admire, but all of us in Silicon Valley want to build great enterprises and responsible businesses. Google is purest embodiment of innovation for its own sake, so far out on edge stretching the envelope," Hastings said. He compared it to HP in early days and Sun, SGI, and Oracle in the 1980s and 1990s. "Google is a different element in gene pool of  the way Silicon Valley operates. It's purely focused on innovation for innovation's sake."

eBay's Cobb added that he's not sure Google has a grand plan other than the way it is organized, referring to the engineering-driven culture in which 20 percent of their time is dedicated to personal projects to push the envelope.

The most obvious person to comment, Yahoo's Jerry Yang, chose not to jump in on that question, nor did Charlie Rose follow up with him on the Google question.

Microsoft also came up in terms of whether the company would reinvent itself around the Web. "It's very rare for a tech company to have a monopoly for long time. The challenge over the next 40 years is, can it become a great company that doesn't have a monopoly, like a GE. It's very likely to emerge that way," Hastings said.  Yang said that, as Web 2.0 plays itself out, the role of a centralized place on desktop becomes a challenge, but it doesn't go away. But shrink-wrapped software does go away.

Overall, the panelists believe that the industry is percolating disruptions, but it is on more solid ground than in the pre-bubble days. Yang described the industry dynamism as more furious than ever, but grounded in business realities. "The lines for service, distribution, content and who is making money are rewritten on a monthly basis. We have to be disruptive and disrupt ourselves--it's not just crazy invention for invention's sake, there is business realism behind it as well.

eBay's Cobb summed up the basic competitive environment in which all the Internet companies are playing today and will in the coming decades: "We are all competing for our share of the online wallet."

The day started up with an interview with Colin Powell. Powell recently joined legendary VC firm Kleiner Perkins Caufield & Byers as a limited partner, but Rose focused the interview on non-technology issues, discussing everything from the war in Iraq and the failures of the intelligence community to China and the Mid-East situation.