In a blog note questioning Web 2.0 Tim O’Reilly writes that Web 2.0 is the era when people have come to realize that it’s not the software that enables the web that matters so much as the services that are delivered over the web. Web 1.0 was the era when people could think that Netscape (a software company) was the contender for the computer industry crown; Web 2.0 is the era when people are recognizing that leadership in the computer industry has passed from traditional software companies to a new kind of internet service company. The net has replaced the PC as the platform that matters, just as the PC replaced the mainframe and minicomputer.
In another longer article on Web 2.0 he writes that: One of the things that has made a difference is a technology called RSS. RSS is the most significant advance in the fundamental architecture of the web since early hackers realized that CGI could be used to create database-backed websites.
One of the key lessons of the Web 2.0 era is this: Users add value. But only a small percentage of users will go to the trouble of adding value to your application via explicit means. Therefore, Web 2.0 companies set inclusive defaults for aggregating user data and building value as a side-effect of ordinary use of the application. As noted above, they build systems that get better the more people use them.