I’m still absorbing all of the presentations and demonstrations that I saw at the “Next Web” conference in Amsterdam yesterday, and will probably write several more blog postings over the next few days, as I digest all of the material; I’ll just make general observations and summary comments in this posting.

Overall: it’s hard to avoid the feeling that this is deja vu all over again — i.e., a repetition of the frothy hysteria that we saw when the Web exploded back in the late 1990s — given the intensity and near-fanatical energy level of many of the presenters and participants. So it’s not surprising that there was a slight undercurrent of skepticism, cynicism, and even hostility in the audience — especially when it became increasingly obvious, throughout the day, that none of the presenters had any kind of serious “business model” for all of their blogs and services and products. Clearly, advertising “clicks” are serving as the revenue stream for some of the new companies; but overall, there was an all-too-familiar theme of “we just want to build this stuff because it’s cool and fun, and we think people will love it! We’ll figure out how to make money from it sometime later!”

On the other hand, Michael Arrington, who runs the TechCrunch blog, made the valid point that the economics of Web 2.0 are quite different than they were for Web 1.0. New companies today are starting on a shoestring budget; the most widely discussed example was digg.com, which got started on an investment of $1,200. The “burn rate” of these new companies is also much lower, and many of them are operating out of some programmer’s bedroom; people have apparently figured out that they don’t need all of the fancy offices and expensive infrastructure that characterized the Web 1.0 startups. And instead of billion-dollar IPOs that made the founders and VC’s rich, but ultimately made no profits for small-time investors, the Web 2.0 companies seem to be satisfied if a Google or Yahoo or eBay buys their operation for $10 million. Hey, I wouldn’t mind having $10 million in my pocket either, and if it’s cash, it might be a lot more valuable than 10 million stock options that ultimately prove worthless.

Kevin Kelly, the noted Wired editor and prolific author, had an even more positive, optimistic perspective on all of this, which I’ll discuss in a separate posting later today or tomorrow. But he argues that it’s quite natural and reasonable for a new wave of technology to be launched by passionate techies who are happy to give it away free; the traditional profit-oriented exploitation of the technology comes later, when big companies start focusing on how best to optimize the technology, once it has proven useful and popular.

For the large, traditional, Fortune 500 companies that look at Web 2.0 from the perspective of, “Why should I pay any attention to this stuff if there’s no obvious way to generate revenue from it?”, I think there’s something far more important to focus on. The Web 2.0 products and services tend to emphasize better “customer experiences,” and also emphasize giving more control and power to the end-user — by letting customers create content (in the form of blogs, etc.), design their own products, generate their own recommendations for other customers to see, etc. If used intelligently by a big company, this can help increase customer loyalty, create new customers, and prevent customer attrition. If I’m the CEO of ABC Widget Corp, Web 2.0 might not help my company’s R&D department to develop entirely new products, but it empower my customers to do so; and it might help make my widget-buying customers happier and more loyal. There’s a lot of detail behind this philosophy, but I think it’s very real.

That’s all I’ve got time for at the moment; I’ve got to head for the airport. More later…