It was through a combination of these technologies that businesses could overcome the limitations of HTML and create web applications. The simplest application that most people have run across is the shopping cart, which allows us to order our goodies on the web instead of driving to the store. And many people have turned to the Internet to do their taxes instead of filling out all of those crazy forms.
It is safe to say that the business world was in awe of the raw potential provided by the Internet, and that awe was quickly transferred to investors. Internet companies (called Dot-Coms) began popping up left and right while companies like Amazon.com became worth more than their traditional counterparts like Sears and Roebuck even if they had never posted a profit.
Internet History - The Fall of the Internet
The Internet and the 'dot-com bubble' fueled a runaway economy that drove up stock prices for companies that didn't have the profits to support them. Dot-com startups became a dime a dozen, each coming with a promise of latching on to the Internet pie.
Eventually, someone was going to introduce the Internet to reality, and that happened in 2000 when the technology-heavy NASDAQ index peaked at over 5,000. And, like many relationships, the small fights between the Internet and reality turned into big fights until, in 2001, they had a huge disagreement and by 2002 they had decided to call it quits.
Internet History - Web 2.0
With people back to reality, the Internet as a solid investment emerged again in 2003 and has been steadily rising. Equipped with technologies like Java, Flash, PHP, ASP, CGI, .NET, etc., a new trend of social networking began to rise in popularity.
Social networks aren't anything new. They've existed long before the Internet and date back to the dawn of mankind. If you've ever belonged to a group of friends or a 'clique', you have belonged to a social network.
Online games have been using them for years with 'guilds' and 'friends list' to help connect players to other players. Social Networking websites date back to the mid nineties with websites like classmates.com. But they came to the forefront of the web in 2005 when Myspace rose in popularity.
Social Bookmarking, Social Networking, and emerging technologies have given rise to 'Web 2.0'. Today, Web 2.0 is mostly a marketing term and can be used to describe anything from the 'new use' of the Internet emerging through the popularity of blogs and RSS feeds to the utilization of technologies and methodologies like Social Networking and AJAX to bring together a new user experience.
If we were going to be technical, today's web is probably more accurately described as 'Web 3.0' or 'Web 4.0', but attaching a generational version number to anything is a dicey business at best.
What we can say is that the web is evolving as more people use the Internet to connect to friends and family, to meet new people, to share information, and to do business.
If I had to best describe the phenomenon called 'Web 2.0', I'd say that as a society we were using the Internet as a tool, and now as a society we are merging with the Internet. It is becoming a part of us and a part of how we live instead of just something we use as a tool.