Whether it was watching a video clip on YouTube or an iPod, creating and updating a MySpace page or Netflix queue, making a Skype videophone call or blogging about the World Cup, the past year was one in which technology became more personal, accessible and interactive. These same participatory technologies likely sowed seeds for new business opportunities in 2007.

Time magazine named “You” its 2006 “Person of the Year,” a reference to the meteoric rise in 2006 of user-generated content, on sites such as video-sharer YouTube and photo-sharer Flickr, and online social networking, on MySpace, Facebook, Friendster, Bebo and others.

In 2006, the World Wide Web became a tool for bringing together the small contributions of millions of people and making them matter… It’s a story about community and collaboration on a scale never seen before. It’s about the cosmic compendium of knowledge Wikipedia and the million-channel people’s network YouTube and the online metropolis MySpace.

The magazine’s good-intentioned, albeit gimmicky, cover for the “Person of the Year” issue featured a mirror.

Undoubtedly, the past year was one in which technology became more personal, more accessible and more interactive, emphasizing consumer convenience and preference.

The same goes for e-commerce.

A recent survey of e-retailers found that 63 percent of 1,000 businesses that trade online had seen an increase in revenues over the past 12 months. As we reported last month, the addition of videos to an e-retailing site creates a whole new site landscape and customer experience. Exploiting the penetration of broadband to create truly differentiated retail brands gives consumers more customized options than ever, and they are gaining access to richer product information through interactive video demonstrations.

As Richard G. Weissman, C.P.M., wrote here approximately one year ago:

There is more to do on the Web. Source through online directories, search through online catalogs, download product specifications to your desktop or even directly into a CAD drawing, manage projects, check on status of back orders, take virtual factory tours, use a Web camera to keep an eye on inventory, monitor equipment performance, manage contracts, review RSS feeds of business news, collect supplier performance data, or experience more of the ever increasing applications found online.

For businesses, there’s even more to it.

Silicon Valley consultants and many others call it Web 2.0, as if it were a new version of an old software. On Google’s annual top 10 list of the hottest search words and phrases, the top spots were taken by terms related to user-generated content, such as blogs, social networking sites and podcasts.

Clearly, we didn’t just watch — we contributed, we worked like mad: we created MySpace and Facebook profiles; we posted our photos on Flickr and Photobucket; we downloaded home videos and posted them on YouTube; we reviewed books at Amazon; we read a particularly insightful blog post, scrolled to the bottom and clicked on “Digg it”; and we recorded podcasts. We not only blogged about our political candidates or World Cup teams winning or losing, we blogged about our angst of visiting in-laws. We posted our impassioned opinions, DIY projects and cooking recipes in online forums. We built open-source software.

On the Internet, Linden Lab‘s immersive virtual world Second Life really captured the zeitgeist as its graphical representation of an entire universe spawned a proto-economy based on an imaginary currency. News service Reuters set up a bureau office in the virtual world and is paying to staff it and to rent office space there. Sun Microsystems chose Second Life as the venue for a recent press conference.

MySpace, as a member of the News Corp. family — after Rupert Murdoch bought the marquee Web business for $580 million in 2005 — claims “Tom” has more than 100 million friends at the site. No. 2 social-networking site Facebook (behind leader MySpace) currently has more than 13 million members.

Even the National Association of Manufacturers (NAM) has an account at both MySpace and Facebook.

Podcasting — whereby audio and video files can be downloaded over the internet and played on a suitable device — continued to gain momentum in 2006, and there’s no sign of any let-up as commentators predict 2007 will be the year that the audio downloading phenomenon really comes into its own.

The blogging boom continued unabated in 2006: a November survey from blog tracker Technorati revealed 100,000 new online journals are created every day, with 1.3 million posts blogged daily. As such, more businesses began to understand the benefits of using blogs, seeing the medium as a new way to communicate with customers, raise their firms’ profile and keep their Web sites looking fresh.

Sites featuring user-generated content ruled, but YouTube cashed in. Google bought it for $1.6 billion. The site enjoyed an explosion of popularity thanks to its ease of use and vast quantities of free content. Technology now makes sharing and watching video on the Internet easy — and big business.

The Web 2.0 smorgasbord in 2006, with all of the blogs, wikis, mashups and social networks, redefined the way consumers exchanged information. Perhaps the same participatory technologies sowed seeds for new enterprise opportunities in 2007.

Over the next several months, analysts and technical experts predict, blogs, wikis and podcasts will have a profound influence over the way businesses collaborate in the global enterprise.

Of course, it will take some trial-and-error.

Gartner analyst Gene Phifer said corporate blogs and wikis will feature service level agreements (SLA) that determine who may or may not alter, edit or contribute to them. “Corporate blogs are used many times to relay direct information from company executives and spokespersons,” Phifer told Internet News. “The company mission statement must be maintained in these blogs, and information that may be proprietary, confidential, libelous or merely inflammatory must be avoided. Policy and process are the only ways to assure this.”

Moreover, one of the real powers of social networking technology lies in its ability to reach passive candidates for jobs requiring specialized skills and experience, according to Workforce Management.

Consider LinkedIn, an Internet social network service used mostly for business connections. It has more than 2.5 million registered users, including 630,000 in Europe and 170,000 in Asia (according to Wikipedia). Enthused by the technology, recruiters across the United States, for instance, are quickly identifying networking sites as their sourcing tool of choice.

One of the benefits of the networking technology is that it can greatly increase the diversity of the talent pool accessible to recruiters. The technology also allows recruiters to source more quickly and leaves more time to meet the needs of valuable candidates. With U.S. unemployment rates for workers with college degrees at less than 2 percent, recruiters are shifting to networking technology for hard-to-fill positions.

The second Internet boom at least appears marked by greater discrimination than the first — notwithstanding some of the prices being paid for young, unproven companies. Yet “Web 2.0″ viral may simpy be hype. It isn’t a standard. And the technologies that compose it aren’t even new.

Despite better attention paid to the current boom, we may be looking at another Internet bubble burst. We have a new generation of public sites appearing with greater regularity and a new generation of speculators seeking to stake their commercial claim to the traffic. The hype is building — as is the spending. Will there ultimately be another burst, a shakedown, with only those few who are generating solid revenue to remain? Is Web 2.0, like Time‘s “Person of the Year” cover, just gimmicky shortsightedness?

What do you think: a business revolution or another over-hyped bubble burst-in-waiting?

Resources

Time’s Person of the Year: You
by Lev Grossman
Time, Dec. 13, 2006

Barreling Through The Web 2.0 World
by Clint Boulton
Internet News, Dec. 27, 2006

Using Social Networking to Fill the Talent Acquisition Pipeline
by Fay Hansen
Workforce Management, December 2006

The Best: Web 2.0 Acquisition Bait
by Christopher Null
Wired, January 2007