The Next Net 25

A new Web revolution is picking up steam, and the next Google or Microsoft could emerge from the companies that are in the vanguard.

SAN FRANCISCO (Business 2.0 Magazine) - Things are really crackling in Silicon Valley these days. There's the frenzied startup action, the rising rivers of VC cash, even the occasional bubble-icious long-term stock prediction (Google $2,000, anyone?).

There's so much happening that the buzzword recently employed to try to encapsulate the era -- "Web 2.0" -- now seems hopelessly inadequate, defined and redefined into near meaninglessness by squadrons of aspiring entrepreneurs, marketers, and other fortune hunters.
So it seems a particularly useful moment to wave away the smoke and home in on what's really core. Don't be distracted by the Valley's hype-o-meter pushing toward the red: There's something very real -- and very powerful -- afoot.
Driven by ubiquitous broadband, cheap hardware, and open-source software, the Web is mutating into a radically different beast than it has been. And that is leading to the creation of entirely new kinds of companies, new business models, and oceans of new opportunity.
We are in the early stages of what might be better thought of as the Next Net. The Next Net will encompass all digital devices, from PC to cell phone to television. Its defining characteristics include the ability to interact instantaneously with any of the more than 1 billion Web users across the globe -- not by, say, instant messaging, but by evolving instant-voice-messaging and instant-video-messaging apps that will make today's e-mail and IM seem crude.
The Next Net is deeply collaborative: People from across the planet can work together on the same task, and products or tools can be rapidly tweaked and improved by the collective wisdom of the entire online world.
The new era is also creating a realm of endless mix and match: Anyone with a browser can access vast stores of information, mash it up, and serve it in new ways, to a few people or a few hundred million.
Most striking, the Next Net creates endless possibilities for entrepreneurs and established players alike to take advantage of the Web's new power. They are building on the success of early standard-bearers -- Flickr, MySpace, Wikipedia -- but also moving beyond those pioneers in creative and fascinating ways.
In the pages that follow, we identify 25 companies, in five Next Net categories, whose approaches help illuminate where the Web is headed and where the opportunities lie. Most are startups, a lot of them with less than 10 full-time employees. Few are currently making money, and it's a given that many will fail. But it's equally likely that somewhere within this group lurks the next Google or Microsoft or Yahoo -- or at least something that those giants will soon pay a pretty penny to have.

SOCIAL MEDIAThe new culture on the Web is all about consumer creation; it's composed of things like the nearly 30 million blogs out there and the 70 million photos available on Flickr. With a click of the mouse, anyone can be a journalist, a photographer, or a DJ. The audience -- that 1 billion-plus throng linked by the Web--itself is creating a new type of social media. That's leading to the creation of hundreds of promising Next Net businesses like the ones that follow.

SOCIAL MEDIACompany: Digg (San Francisco)What it is: News aggregatorNext Net bona fides: The site's links are picked by the readership, which has been doubling every three months; news items with the most votes make the homepage.

SOCIAL MEDIACompany: Last.fm (London)What it is: Social radioNext Net bona fides: Its software creates a personalized streaming radio station based on the digital music you already listen to, shares your playlist on the Web, and suggests music from other closely related playlists

SOCIAL MEDIACompany: Newsvine (Seattle)What it is: Collaborative publisherNext Net bona fides: Readers vote and comment on stories but can also organize their own pages and write their own stories, for which they collect 90 percent of associated ad revenues.

SOCIAL MEDIACompany: Tagworld (Santa Monica)What it is: Social networkingNext Net bona fides: With cutting-edge Web software enabling blogs, photo and music sharing, online dating, and more, members confront a rich smorgasbord of ways to interact, and everything can be tagged for easy searching.

SOCIAL MEDIACompany: YouTube (San Mateo, CA)What it is: Video sharingNext Net bona fides: This site lets people upload, watch, and share millions of video clips. All videos are converted to Flash (a Web-tailored format for graphics and video), making them easy to import into blogs or webpages.

Incumbent To Watch: Yahoo!Hoping to dominate social media, it's gobbling up promising startups (Del.icio.us, Flickr, Webjay) and experimenting with social search (My Web 2.0) that ranks results based on shared bookmarks and tags.

MASHUPS AND FILTERSAs we move toward the Next Net, some of the most useful sites will be those that either help "mash up" -- meaning mix and match -- content from other parts of the Web or act as a filter for the overwhelming mountains of information now at people's fingertips. The companies that follow use content already on the Web as a starting point and then improve on it by organizing it in a new way.

MASHUPS AND FILTERSCompany: Bloglines (Los Gatos, CA)What it is: Online feed readerNext Net bona fides: The site collects blogs and news from all over the Web and presents it in one consistent, updated, multifeed mashup

MASHUPS AND FILTERSCompany: Eurekster (San Francisco)What it is: Search mashupNext Net bona fides: This do-it-yourself search engine, or swicki, allows you to define sites you want to search, post the results on your blog or website, and get a cut of any search ads your audience clicks on

MASHUPS AND FILTERSCompany: Simply Hired (Mountain View, CA)What it is: Job search engineNext Net bona fides: It searches nearly 4.5 million listings on other job and corporate sites; subscribers receive an RSS feed or e-mail alert when a job that meets their parameters pops up.

MASHUPS AND FILTERSCompany: Technorati (San Francisco)What it is: Blog search engineNext Net bona fides: The site filters the almost 30 million existing blogs, shows how many other blogs link to a particular post, and can rank blogs by topic.

MASHUPS AND FILTERSCompany: Trulia (San Francisco)What it is: Real estate mashupNext Net bona fides: Combining home listings from agents' websites with Google Maps, the site is becoming a hit in California and is expanding into other regions.

MASHUPS AND FILTERSCompany: Wink (Mountain View, CA)What it is: Tag search engineNext Net bona fides: By searching user-generated tags on Next Net sites like Del.icio.us and Digg, Wink filters the Web so users can sort links into different collections and add their own tags and bookmarks.

MASHUPS AND FILTERSIncumbent To Watch: GoogleAlready the ultimate Web filter through general search as well as blog, news, shopping, and now video search, it's encouraging mashups of Google Maps and search results, and offers a free RSS reader.

THE NEW PHONEFor nearly a century, the phone, and voice as we know it, has existed largely in the confines of a thin copper wire. But now service providers can convert voice calls into tiny Internet packets and let them loose on fast connections, thus mimicking the traditional voice experience without spending hundreds of millions on infrastructure. All you need are powerful--but cheap--computers running specialized software. The Next Net will be the new phone, creating fertile ground for new businesses.

THE NEW PHONECompany: SIPphone (San Diego)What it is: Internet phone softwareNext Net bona fides: Its Gizmo Project application allows free PC-to-PC calls, cheap PC-to-phone calls, and sound effects.

THE NEW PHONEIncumbent To Watch: eBay (Skype)The pioneer in the field and still the front-runner, Skype brings together free calling, IM, and video calling over the Web; eBay will use it to create deeper connections between buyers and sellers.

THE WEBTOPIt's been a long time -- all the way back to the dawn of desktop computing in the early 1980s -- since software coders have had as much fun as they're having right now. But today, browser-based applications are where the action is. A killer app no longer requires hundreds of drones slaving away on millions of lines of code. Three or four engineers and a steady supply of Red Bull is all it takes to rapidly turn a midnight brainstorm into a website so hot it melts the servers. What has changed is the way today's Web-based apps can run almost as seamlessly as programs used on the desktop, with embedded audio, video, and drag-and-drop ease of use.

THE WEBTOPCompany: JotSpot (Palo Alto)What it is: Wikis and online spreadsheetsNext Net bona fides: A pioneer of Web collaboration apps, a.k.a. wikis, it has unveiled its new Tracker application, which provides a powerful, highly collaborative

THE WEBTOPCompany: 30Boxes (San Francisco)What it is: Online calendarNext Net bona fides: This Web-based software allows families and groups to create private social networks, organize events, track schedules, and share photos; it may soon allow you to save phone numbers as hyperlinks and make calls by simply clicking on a link.

THE WEBTOP
Company: 37Signals (Chicago)What it is: Online project managementNext Net bona fides: Its Basecamp app, elegant and inexpensive, enables the creation, sharing, and tracking of to-do lists, files, performance milestones, and other key project metrics; related app Backpack, recently released, is a powerful online organizer for individuals.

THE WEBTOPCompany: Writely (Portola Valley, CA)What it is: Online word processingNext Net bona fides: It enables online creation of documents, opens them to collaboration by anyone anywhere, and simplifies publishing the end result on a website as a blog entry

THE WEBTOPCompany: Zimbra (San Mateo, CA)What it is: Online e-mailNext Net bona fides: Taking aim at Microsoft Outlook, its Ajax-based application can, among other things, bring up your calendar for any date your mouse encounters, launch Skype for any phone number, or retrieve a Google map for any address.

THE WEBTOPIncumbent To Watch: MicrosoftBy rolling out Windows Live, Office Live, and other Next Net-centric software, it hopes to grab a dominant -- if not monopolistic -- share of the webtop, which Bill Gates regards as a crucial strategic priority.

UNDER THE HOOD A growing number of companies are either offering themselves as Web-based platforms on which other software and businesses can be built or developing basic tools that make some of the defining hallmarks of the Next Net possible.

UNDER THE HOODCompany: Brightcove (Cambridge, MA)What it is: Internet TV distributorNext Net bona fides: It's creating a video-distribution platform over the Web for producers large and small

UNDER THE HOODCompany: Jigsaw (San Mateo, CA)What it is: Business contact databaseNext Net bona fides: In exchange for their own contact lists, salespeople use this site to access a virtual Rolodex of managers at nearly 150,000 companies

UNDER THE HOODCompany: SimpleFeed (Palo Alto)What it is: Opt-in RSS marketingNext Net bona fides: By allowing RSS feeds to be customized to the desires of each recipient and tracked individually, the site makes such feeds a powerful marketing tool.

UNDER THE HOODCompany: Salesforce.com (San Francisco)What it is: Platform for online enterprise softwareNext Net bona fides: It pioneered Web-based software and is trying to become a marketplace and host for other online apps through its AppExchange.

UNDER THE HOODCompany: Six Apart (San Francisco)What it is: Blogging toolsNext Net bona fides: The company helped kick off and sustain the Next Net with its Moveable Type blogging software and TypePad blogging service.

UNDER THE HOODIncumbent To Watch: AmazonIt's becoming a major Web platform by opening up its software protocols and encouraging anyone to use its catalog and other data; its Alexa Web crawler, which indexes the Net, can be used as the basis for other search engines, and its Mechanical Turk site solicits humans across cyberspace to do things that computers still can't do well, such as identify images or transcribe podcasts.