As the world financial crisis has gotten gradually worse over the past few weeks, I've been pondering what this means for the Web. ReadWriteWeb as a publication focuses on technology - web products and trends - rather than business and VC happenings. So with the exception of one of our feature writers Bernard Lunn, who has written a number of great posts on how entrepreneurs can survive this period, we've generally kept out of the Credit Crisis discussion thus far.

But we're clearly now at a point where the financial problems of the world will have a big impact on where Web Technology is headed. Indeed, it looks like we've arrived at one of those giant inflexion points - where one Web era is usurped by another.

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Of course this last happened when Web 2.0 was coined by O'Reilly Media in about 2004. Luckily not long before that ReadWriteWeb was born (early 2003). So ReadWriteWeb has been documenting Web 2.0 ever since. Over the past couple of years, we've been focusing on other, perhaps more meaningful, trends - Semantic Web, recommendation technologies, web sites becoming web services, Mobile Web and more. We've documented these meta trends in a number of big posts, some of which are in our Best of ReadWriteWeb page and copied here:

• Web Technology Trends for 2008 and Beyond
• What's Next on the Web: a ReadWriteWeb Toolkit for 2008
• 2008 Web Predictions
• 10 Future Web Trends
• 10 More Future Web Trends

The Welcome Return of Innovation

Although we'll continue to see the success stories of web 2.0 grow and perhaps prosper - social networking, mashups, user generated content, etc - now is the time for innovation. I'm not stating anything revolutionary there, because it's an old cliche that tech innovation thrives in times of recession. Nat Torkington of O'Reilly Radar put this into the context of web 2.0 recently:

"During boom times, companies direct development and occupy great talent with at best evolutionary improvements over the state of the art. Companies are great chasers of new things, but aren't great at making new things. A recession means technologists cease to be paid vast amounts to duplicate the work of others. The Great Tech Bust of Ought Two gave us 37Signals, Flickr, and del.icio.us and there's a strong argument to be made that many companies spent the next six years chasing what they created."

So we can expect to see a welcome return to web innovation in 2008/09, along the lines of what Flickr and 37Signals created back in the early days of web 2.0. However web entrepreneurs will need to make adjustments due to the economic climate. Many people have already noted that a re-focus on the bottom line of your business is key, which we discuss below. But perhaps just as importantly, as Nat pointed out, there is an opportunity to take more advantage of open source technologies and cheaper cloud computing infrastructure.

Yes Tighten Your Belts, But Open Your Minds Too...

In the past week some high profileVCs have been preaching belt tightening as the primary response to the economy. More than a few people have expressed cynicism about this advice, given the hype and party-throwing days of web 2.0. New York VC Fred Wilson wrote a post today, partly in response to a comment Bernard left on his blog, in which he defends the advice he and other VCs have been giving since the financial crisis got going. Basically that advice has been to batten down the hatches, reduce spending and, in Fred's words, "acting responsibly and making sure we all survive to fight another day".

It's all common sense advice, especially since web 2.0 has been predominantly about consumer apps. I'm certainly no economist, but it makes sense that in a tight credit market consumer spending will reduce - which will impact heavily on consumer web apps, and trickle through to other parts of the ecosystem.

But I'd love to see technologists, entrepreneurs and VCs take a longer term view of this crisis as well. Sramana Mitra wrote a great post at Forbes outlining some of the opportunities for innovation. In an "Open Letter to the Leaders of Silicon Valley", Sramana first gave some background on the innovation that led to web 2.0 and followed up with a challenge to create technology for Education, health care, social security. As an example she wrote about these opportunities in healthcare and education:

"As the smart-phone movement marches on, led by Steve Jobs' iPhone, can we not create seamless bridges between doctors, patients and insurance providers that can reduce the $250 billion expenditure in health care administration?

And on the Internet, can we not create a body of standardized content and methodology for teachers all over the U.S.--or the world--that includes parents in the process and engages children via "edutainment," the same way MySpace and "World of Warcraft" engage kids?"

Tim O'Reilly has been on a similar mission ever since his speech at the Web 2.0 Expo earlier this year, for startups to tackle 'big challenges'. His core message is to "work on stuff that matters."

What's Next... Let Us Know in the Comments!

We at ReadWriteWeb have been covering mainstreamweb applications and things like health 2.0 this year. But we've only just scratched the surface, just have most startups and Internet companies. As the troubles in the economy begin to affect the tech world, we'll be re-doubling our efforts to document what we hope is an exciting new era of web innovation. There are tough times ahead, but equally there are opportunities.

In the best spirit of web 2.0, let's start by asking you to comment on what opportunities in web technology you forsee over the next year or so. Please leave a comment and let's get a healthy, optimistic - but realistic - discussion started. To provide a bit of inspiration, I've embedded below our stock presentation What's Next on the Web? Web Technology Trends for 2008 and Beyond (circa May 08). Indeed it's time we updated this presentation, so your suggestions welcome!

Note: click here and then click 'full' (bottom right) to view full screen and enable the links inside the presentation.

During the Olympics, Microsoft's Silverlight technology was installed on over 20 million computers. Oprah uses Silverlight and Microsoft has partnered with HP to have Silverlight shipped on HP computers in the future. Microsoft seemed dedicated to spreading Silverlight 1 as far as possible this year.

Now rumors are swirling that Microsoft may be ready to release Silverlight 2 as early as next Monday.

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ETA: Monday, October 13, 9 a.m. PT

Due to a press release about a conference call to be given by Scott Guthrie, Corporate Vice President of the .NET Developer Division, rumors are swirling that Microsoft will be releasing Silverlight 2 as early as next Monday. Guthrie noted that Microsoft will make "a significant announcement related to Microsoft Silverlight," next Monday at 9 a.m. PT. It seems more than likely that the rumors could be true. A developer SDK for Silverlight 2 has already been sent out and Silverlight 2 Beta 2 was released months ago. Looks like Silverlight 2 might be ready to us.

Timetables and Changes

If the rumors are true, this would mean the timetable release for Silverlight 2 was a little off. It was expected by the Summer and it's clearly Fall right now. Nevertheless, a list of upcoming changes has been published, which will be important for developers using Silverlight to review.

However, none of these changes will be important if many don't use Silverlight or develop applications for the platform. So to the developers we ask, how are excited are you about Silverlight 2?

With all the talk of the financial turmoil that the U.S. economy is experiencing, some industries are hoping that they can escape the heat unscathed. In fact, a small portion of the tech industry practically bragged that they wouldn't encounter the same damage as Wall Street by attempting to recruit jobless stock brokers for their start-ups. This week may have put the tech industry on alert with the rest of the U.S. as two relatively high profile tech companies make grand changes to their staff.

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Fast Company Lays Off 20

We don't think the sky is falling, but there may be an earthquake on the horizon as the tech industry begins to feel the economic turbulence. Best known in some circles for hiring Robert Scoble for the Fast Company TV online site, Mansueto Ventures is laying off 20 of their employees in their online and marketing department.

Other cuts the company will make include:

• Other cost cuts he listed included shelving Upstart, a planned magazine devoted to new businesses
• Closing the Atlanta office except for sales
• Cutting IT help desk coverage
• Curtailing perks like tuition reimbursement and free snacks

As to why the such measures are being taken, it is being reported that,

"CEO John Koten said in a staff memo that despite Fast Company's growth, expenses were rising faster than revenue as the publishing industry business has softened."

Seesmic Lays Off 7

On a smaller, but still well known scale, video-commenting startup Seesmic will also layoff several of its employees. In order to prepare for "what most are anticipating to be a bleak economic outlook for the considerable time going forward," Seesmic CEO Loic Le Meur will cut 7, or 1/3, of Seesmic's employees. Allen Stern has noted that this will be in addition to 3 employees that were let go last month.

What's Next?

While these companies will still move forward with their products and services, we can't help but wonder if more layoffs will be seen in the future and from who. We certainly hope the tech industry doesn't see to much news like this future, but there's no denying these situations as fair warnings that the tech industry is not as invincible as it seems.

It's time for our weekly summary of Web Technology news, products and trends. On the product side this week, Google said it would provide RSS feeds of search results, Yahoo updated its calendar app using Zimbra, Mozilla released Geode, Microsoft integrated its Live search into Facebook, and more. On the trends side, we looked at Google stats from recent political debates, investigated the trend of social shopping, and explored the latest in the Mobile Web world - including a RWW Live podcast on the topic, plus an in-depth look at mobile social networks. We also brought you the latest from our new Enterprise Channel.

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Web Trends

Google Has Changed Political Debate Forever

When Sarah Palin and Joe Biden debated in front of one of the largest TV audiences in US election history recently, the two candidates might not have been Googling for facts during the debate, but millions of people watching the debate were. This week Google released some information about what kinds of things viewers were searching for as that debate unfolded, minute by minute. It is amazing both that viewers were able to do such a thing, in real time, and that we're able to watch what people are searching for. The internet in general, and Google in particular, has substantially augmented this important part of public life.

Social Media and Shopping: A Growing Trend

Social media is evolving. What began as a way to "hang out" with friends online has morphed into an entirely new platform for communication, information sharing, and marketing. Businesses are quickly discovering that if they want to reach the youngest demographic, Generation Y (born after 1979), they had best get online. But maintaining a web presence alone isn't enough anymore. According to new research from August 2008, web retailers are now actually trying to engage that demographic segment using social media.

And The Top Mobile Social Networks Are...

MySpace and Facebook, as it turns out. Despite the land grab by numerousstartups looking to become the number one social network for mobile devices, it's becoming apparent that mobile social networking isn't necessarily going to be the new frontier that everyone thought it would be. Instead, as consumers surf the "real internet" on their mobile devices, they're also interacting with "real" social networks like MySpace and Facebook. Could it be that consumers don't want new and separate social networks just for the mobile phone?

RWW Live: Mobile Web Development

This week's episode of RWW Live, our live podcast show, was on the topic of Mobile Web Development. We had special guests from Microsoft, Pandora and DevelopmentNow. The show covered the state of the mobile application development market, focusing on Android, Windows Mobile, iPhone, and more. Here is the audio:

Download MP3

Will Google Use Chrome to Index Password Protected Web?

It's now over a month since Google released its open source web browser, Chrome. An interesting theory we heard recently is that Google will use Chrome to index the password protected Web - a.k.a. the 'dark web'. Right now the Chrome Terms of Service (TOS) prevents Google from indexing private data. But when you consider that Chrome was initially presented as a browser for applications, instead of just web pages, this theory begins to make more sense.

5 Great Books to Build Your Character

Tough economic times and startups have at least one thing in common - you need character and determination to survive. Character is what it takes to win, to believe and to persuade others. It's a mix of passion, determination, sleepless hours, hard work. Character is about crossing the finish line, about achieving dreams and goals. In this post, we look at five very different books that share a common theme - remarkable people.

SEE MORE WEB TRENDS COVERAGE IN OUR TRENDS CATEGORY

A Word from Our Sponsors

We'd like to thank ReadWriteWeb's sponsors, without whom we couldn't bring you all these stories every week!

• FreshBooks offers professional online invoicing.
• SocialText provides an enterprise wiki platform.
• WildApricot is Membership Management Software.
• E.Factor is an online community for entrepreneurs.
• Strands provides real-time recommendations of products.
• Calais brings semantic functionality into your site.
• MediaTemple provides hosting for RWW.
• The Web 3.0 Conference is on October 16 - 17 in Santa Clara.
• Direct Media Exchange is a solution for managing ad networks.
• Rackspace provides dedicated server hosting.
• The Defrag conference is on November 3-4 in Denver.
• Quintura is a visual-based search engine.
• Eurekster is a custom social search portal.
• SixApart provides our publishing software MT4.

Web Products

Microsoft Stake in Facebook Begins to Bear Fruit

Almost exactly one year ago, Facebook and Microsoft were in the headlines when the Redmond, Washington-based software giant outlasted Google in a bidding war to garner a $240 million stake in Facebook. It was that investment that pegged Facebook's valuation at a whopping $15 billion. In July of this year—following a generous amount of speculation on how the two companies would collaborate—Microsoft revealed plans for an integrated search and advertising deal that would incorporate Microsoft Live Search and advertising into the Facebook platform by fall. This week, we saw the first step in that integration with the release of Microsoft Live Search on Facebook.

Finally! Google to Offer RSS Feeds for Web Search Results

A rumor that's been floating around the web lately is that Google will offer RSS feeds for new results in basic web search. This week Search Engine Land confirmed that Google will "soon" offer this functionality. Why is this big news? Because there's no better way to keep track of new mentions of a company, person or concept online than through RSS. Google is the only major web search engine to not offer feeds for basic web search, as they do in blog search and news. We'd previously recommended Live.com for web search feeds, but who really cares about Live.com search results? They're terrible. Google feeds are good news.

Yahoo Announces Major Update to Yahoo Calendar: Leverages Zimbra Technology

Yahoo this week announced a closed beta of a major update to its online calendaring application, which will feature a tighter integration with Yahoo Mail and other Yahoo properties. The new calendar is based on the Zimbra platform, which Yahoo acquired in 2007, and will support both the iCalendar and CalDAV standards for exchanging information with other calendaring services. Among the new features are the ability to enhance your calendar with photos from Flickr, a built-in to-do list, and support for drag and drop. Yahoo Calendar can now also send out reminders for important events by email, IM, or SMS.

Does Your Browser Know Where You Are? With Mozilla Geode, It Might

Today, the old real estate adage 'location, location, location' could just as easily be applied to the Web, where it seems that "where you are" is becoming as important as the information you're seeking. Nowhere is that more apparent than with GPS-enabled mobile platforms that use location-specific information to simplify the way people access and share content on a daily basis. This week Mozilla released Geode, a Firefox geolocation add-on which will enable localized content.

Mufin: Better Music Recommendations through Algorithms?

Music discovery is clearly a hot topic these days, with large companies like Apple and Microsoft competing with smaller services like imeem, Pandora, and Last.fm. With the exception of Pandora, these services typically rely on the listening habits and recommendations of other users. Mufin.com, however, which launched this week, uses a fully automated system that only takes the actual sounds of a song into consideration. In our tests, Mufin often returned good results, but the fact that it doesn't take genres or the quality of a song into account can make for a frustrating experience at times.

SEE MORE WEB PRODUCTS COVERAGE IN OUR PRODUCTS CATEGORY

RWW Enterprise Channel

Why Some Traditional Enterprise IT Vendors Are Scared of SaaS

Some traditional enterprise IT vendors are selling the line that SaaS is a passing phase, that it is "old wine in new bottles". They are telling their market that SaaS is really no different from the discredited Web 1.0 Application Service Provider (ASP) model or even that it is simply the ghost of the ancient mainframe Service Bureau come back to haunt us all. This post shows why their analysis is wrong. It also shows why some traditional enterprise IT vendors feel so threatened by SaaS and why the economic downturn just made this a major issue.

Email us if you're interested in writing for ReadWriteWeb's Enterprise Channel.

SEE MORE ENTERPRISE COVERAGE IN OUR ENTERPRISE CHANNEL

That's a wrap for another week! Enjoy your weekend everyone.

Thank you to our sponsors, for supporting our mission to provide in-depth coverage of Web apps and trends. To enquire about sponsor slots on ReadWriteWeb, email us for a Media Kit.

NEW: we now include RSS advertising as part of our main Sponsor package.

Why sponsor ReadWriteWeb? It is one of the most popular blogs in the world, according to Technorati, and reaches an influential audience. Our site is read by tech and media professionals, early adopters, developers, designers, analysts, CIO's, VC's, media execs, leading thinkers. Email us now for more details. Here are our current sponsors...

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Strands has created a social recommender engine that is able to provide real-time recommendations of products and services through computers, mobile phones and other Internet-connected devices.

Calais, powered by Thomson Reuters, brings state-of-the-art semantic functionality into your blog, content management system, site or application.

The Defrag conference is focused on the tools and technologies that accelerate the "aha" moment. It is being held November 3-4 in Denver, Colorado.

The Web 3.0 Conference is for the builders of the next generation Web: designers, developers, entrepreneurs, marketers, business strategists, and venture capitalists. It's on October 16 - 17, 2008 in Santa Clara, CA.

Rackspace provides dedicated server hosting.

Direct Media Exchange is a simple solution for managing ad networks that allows publishers to make more money from their websites.

FreshBooks offers professional online invoicing. Save time, get paid faster and look more professional by streamlining your invoicing with FreshBooks.

SocialText provides an enterprise wiki platform for organizations who want to accelerate knowledge sharing, foster collaboration, or build online communities.

WildApricot enables clubs, associations and communities to automate and streamline administrative tasks, using their online membership management software.

E.Factor stands for "The Entrepreneur Factor" and represents a vibrant online community and virtual marketplace designed for entrepreneurs, by entrepreneurs.

Quintura is a visual-based search engine, which we are now using to power ReadWriteWeb's main search. Check it out here.

Eurekster is developer of the swicki that we use on RWW, a custom social search portal on the topic of your choice (in our case web tech).

MediaTemple provides hosting for RWW and SixApart provides our publishing software MT4.