Web 2.0 Summit Opening Session

by Daniel H. Steinberg

Over the next twenty weeks we will be podcasting some of the highlights of the Web 2.0 Summit 2006. This week we begin with the opening session from program chairs Tim O'Reilly and John Battelle. They look back at their original notions of the ideas that make up Web 2.0 and preview many of the sessions that you will see in the coming weeks.

You can download the audio as an mp3 or download the video as an mp4. Here are all of the Web 2.0 Summit Podcasts released so far. You can also subscribe to the audio podcast or to the video podcast.

Intel Software Network Intel Software Partner Program

This first episode is sponsored by the Intel Software Partner Program (

This transcript is created by Casting Words.

ANNCR: Tim O'Reilly and John Battelle open the Web 2.0 Summit for '2006. Here's Web 2.0 Summit Program Chairs - Tim O'Reilly and John Battelle.

[audience applauds]
John Battelle: All right!
Tim O'Reilly: All right, which one of those two were you tonight? The guy or the bus?
John: Yeah, right. That was one of the gosh, 19 clips that was the most fun part of putting this thing together was choosing a bunch of clips for Shorts 2.0, which is running tonight...
Tim: Right.
John: ... As one group, and we'll just keep sort of bumping in and out of breaks and stuff with interesting, fun, touching clips. We usually do music but it seemed like the Web was moving towards Video, and we should too, so...
Tim: Right, absolutely.
John: ... So then we did.
Tim: Hey, thanks for coming. This is a great turnout. And I have to say, "you guys should be thinking we're so glad to be here", because we had about 5,000 people who asked for invitations who we had to turn down. So, I'm really glad to have you here, and I hope you're glad to be here as well.
John: Yeah, thank you. It's been one hell of a year, last year we got up here and Tim...
Tim: Yeah, what'd I say?
John: You said...
Tim: Didn't I say, "watch out for turning this into a bubble?"
John: Yeah, you said, "don't believe the hype" or something like that.
Tim: Yeah well, I think something went wrong with that picture. You know we started this...
John: Why, don't you guys listen to us?
Tim: We started this Conference after a planning session at O'Reilly in 2003 where we said, "we got to re-ignite some excitement in the Industry, because the Web isn't over yet", and everybody was still down in the dumps. And I guess we succeeded, because...
John: Well I think you guys succeeded, we just, we're the mirror here.
Tim: Yeah, right. So the growth is cheerleading.
John: There's an awful lot of really interesting stories that have happened over the last year. We're going to be talking about all of them - you know the transition of Microsoft from being a Major Packaged Goods Company to being a Web Services Driven Company. The dominance of Google across so many markets, Eric's going to be here very shortly. The increase of Venture Funding for small nimble Companies, and very small packages.
Tim: You call it the increase of Venture Funding, or the...?
John: Well yeah, I mean it was up a 100...
Tim: A decrease in the size.
John: A decrease in the size, an increase in the availability to Entrepreneurs.
Tim: Yeah, right.
John: It's a good thing. Major players actually becoming the replacement for IPO's really, in terms of small entrepreneur legitimate companies looking for an exit. They now look to Platform Companies much more than they do the Public Markets, which is interesting. Mary Meeker will be here again to give us an Equity Update on that. The rise of what Tim first called, "The Collecting - Harnessing Collective Intelligence", now kind of user-generated content.
Tim: Yeah.
John: Which has been a huge story this past year, of course - My Space, and U2, and all the massive acquisitions there. And there's an awful lot more but we're going to get to all of it.
Tim: I just want to take a moment to highlight a couple of ideas. And, crappo, something went wild here. Let's see I should be able to... well...
John: This reminds me of a Launch Pad.
Tim: It does!
John: (laughs) We just launched 13 companies and products in the last, in an hour and a half, and it was really something. Can we bring up Tim's computer?
Tim: OK, there we go. OK, so you guys probably remember this was a piece of Web 2.0 that I think everybody really got. You know I wrote a paper and I described a bunch of these ideas, and a lot of it boiled down to this idea of - Web 2.0 is about Harnessing Network Effects to build Applications that get better the more people use them. And that's the, the short form of that is what I called, "Harnessing Collective Intelligence." But it can also be called, "User Self- Service." And I guess the reason I wanted to highlight this is because this is the start of the real disruption. And the best example of this - kind of asymmetric competition that can come from User Self-Service, actually comes from "Craig's List." Craig Newmark, founder, showed a great slide at Google's ZiGi Conference last year, and I've been showing it ever since, cause it looks like this. Now it's a little overstated because since Craig posted this a couple of people have moved around, and besides Craigslist has increased its employee count by 25%. So it's really...
John: They're like at 21% now.
Tim: Yeah, you know but that really shows you the power of User-Generated Content, that somebody can be a real player with such a tiny Company. And that's a huge disruption. So we have to really think about that. But the other thing that we have to think about, and this is just something I just really want to impress on you guys - when we talked about "Harnessing Collective Intelligence", we also talked about "a couple of other big Web 2.0 ideas", that are really starting to play out. And when I brainstorm with people, I find them still struggling with these ideas. And these ideas, well first of all are - I'm sorry, always a problem when you go with slides. I just want to say, back to the disruption, we don't actually lose the ability to make money, right? Clank Christensen has this wonderful phrase, "The law of conservation of attractive profits." Which meant for all the money that came out of the Ecosystem with people like Craig's List, we have the value that's created by people like Google. But we have to really remember some of these other principles. Google has built this enormous Data Base, which gives them enormous Power. The Players - the Big get Bigger. And another way of saying this phrase, "Data is the entail in side" is "Who's tail is it?" "Who is the dog that's wagging the long tail?" And we have to start seeing how this is starting to become a Platform Game. And that was another principle that we talked about which is, "a Platform beats an Application every time." And fabulous phrase, a statement that came from Debra Trapert who's going to be on stage tomorrow, which said, "In the future being on someone's Platform will mean being hosted on their Infrastructure." I was just talking with Eric Schmidt back stage, and he's thinking very similar things. I think John's going to be exploring that with him.
John: Yes.
Tim: So what we have to understand is that even though there's this wonderful bubbling up of User-Generated Content, that's the beginning of Web 2.0, but it's not the end. And we're now in this stage where the disruption is happened, and now we're starting to see the consolidation, whether it's through acquisition, through gaining control of key markets. We're going to see a lot of interesting things happen. I believe that the Web 2.0 of next year is going to be very, very different than the Web 2.0 of this year. Back to you, John.
John: The theme is disruption in opportunity. Look at what Craigslist did in terms of disrupting a 15 billion dollar classifieds market. But there's also opportunity. We're starting to see what you might call the incumbents figure out that this stuff is for them as well. You're looking at now the major labels and studios finding detente with Google and You Tube, or at least they're in talks to come to detente - which is very different than the stance that they had just a year ago. Or the fact that newspaper companies are now working with Google on testing an ad system that for backfill inventory for their newspapers. You look at Amazon and what they're doing in becoming an entire platform IT infrastructure potentially for very large enterprises as well as for, of course, start-ups. All of these things we're going to discuss. Jeff Bezos will be here tomorrow morning. We'll have a conversation about that. Let us give you just a very brief tour of what you're in for because it's really a great lineup. It starts with Eric Schmidt. It ends with David Filo of Yahoo!. And in the middle, you've got the introduction of a great new platform called Vox from Six Apart. Barry Diller and Arthur Sulzberger will be here. Jack Ma will be here, Niklas Zennstrom. That's just today.
Tim: I was going to say, one thing that is really important to think about when you're talking about Nicholas and Skype, talking about the platform power of the Internet. I was talking with someone recently from Skype and they pointed out that they only have 12 servers. So we're focused on the large platform plays like Google's hundreds of thousands of servers, but we have to realize the power of the network also for distributed infrastructure. So Skype, depending on how you look at it, either has 12 servers or five million depending on however many users are online.
John: Exactly.
Tim: And so, talk about disruption. We've got some huge cross currents in this market.
John: By the way, Niklas tonight at dinner, sponsored by Hakia - very thankful to them for that this is his first interview in front of the industry since he's been allowed to be back in the United States without being served papers. So that should be very interesting.
Tim: And he's not done yet either with his disruptive plans.
John: He's got some really interesting stuff up his sleeves. We'll talk about that. Tomorrow we start with Jeff Bezos. We have Bruce Chizen from Adobe. We have a debate on net neutrality which should be fun. We have tons of high order bits, short presentations. We did a couple today, one from Joichi Ito and Vox of course. The CEO of Cyworld, the CIO of FedEx next to each other. That should be interesting, one after the other. Ross Levinson. the introduction of Ning another platform play from Marc Andreessen and Gina. We have Jim Lanzone and Steve Berkowitz who have made a career of trying to compete with Google. Jonathan Miller from AOL. Ray Ozzie from Microsoft. And a very special guest on Wednesday night which I'm not allowed to tell you about yet.
Tim: But it's really cool.
John: Really cool. Tomorrow morning I can tell you I'm told I can tell you tomorrow morning and you'll understand why. Want to tell them about day three?
Tim: all right, well. On day three we've got VC report with Roger McNamee and Ram Shriram. We have an alumni report. We're actually having some people back to talk about how they've done in the last year. We're going to be hearing from Kevin Rose and Marissa Mayer. And then we have an interesting panel, EMI and the pirates. It's going to be cool.
John: Eric Kleptone and the vice chairman of EMI. And Eric Kleptone and A Night of the Hip Hopera which is extraordinary kind of mash up of music really, really ticked off the folks at EMI.
Tim: And you guys loved the teen panel last year, right? Well this year we brought back the teens but we also brought their parents which is going to be kind of cool.
John: This is going to be good.
Tim: And of course we're ending with David Filo. The other thing I wanted to bring up just before we get on with the conference is you guys have probably noticed that we've renamed the conference the Web 2.0 Summit. And that's because of those five thousand people that tried to get in who couldn't. We realized we needed to have another conference for everybody else. Not only because we want to do something bigger, but also more practical hands on for programmers, designers, developers, the people who are actually building the applications. So we've actually announced another Web 2.0 Expo, which includes a technical conference, which will be held April 15th to 18th at Moscone West. That way we can let in all the people who we couldn't let in to this more exclusive gathering, which in homage to John's past events we've renamed the Web 2.0 Summit because that's what John is the master of, is bringing together the...
John: I used to have a conference called the Internet summit and you guys used to go to that. That was a good conference, wasn't it?

John: Those were the days! More of you chuckled than actually said you came.

John: I don't know what that's all about. One last thing. This room is a great room, it's a great place. There's more room for everybody. We have amazing workshops actually where you aren't cheek by jowl, except maybe in a couple of rooms. Sorry about that. Still in all there may be times when there's not a seat available here. Google has sponsored an overflow lounge which is up in Twin Peaks. It's got really super cool white sofas, live video feeds, snacks and all sorts of good stuff. So if you want to hang out up there and check out the conference you can as well. And with that...
Tim: Let's get going.
John: Absolutely.
ANNCR: Tim O'Reilly and John Battelle at the Web 2.0 Summit, 2006.

Daniel H. Steinberg is the editor for the new series of Mac Developer titles for the Pragmatic Programmers. He writes feature articles for Apple's ADC web site and is a regular contributor to Mac Devcenter. He has presented at Apple's Worldwide Developer Conference, MacWorld, MacHack and other Mac developer conferences.