Last night a friend of mine asked me to define web 2.0. There's still plenty of dispute as to what web 2.0 so I didn't really try. What I did tell him was that out of the current batch of cutting edge Internet ventures, some will succeed and last well in to the future, while the majority will die a quiet death. This harsh reality will be dictated by an unbiased judge that goes by the name of capitalism.
The question most of us should be asking is, *how do we make money from web 2.0* ? Web 2.0 is gaining notoriety for _not_ producing profitable business models. At the end of the day businesses need to fill a demand, and this demand is what drives successful ventures. If you believe this, then to make money in the web 2.0 world you should be asking yourself how to apply web 2.0 _technology_ to fill demand. This goes against the grain of most web 2.0 ventures and is often not well accepted by many tech-head cutting edge Internet savvy individuals who are more interested in the technologies than the problems they solve.
Web 2.0 has given us the ability to innovate on existing products and services, and perhaps even the ability to do things we couldn't do previously. If you try to start a venture based on innovation then you will have to overcome the existing market players. Apple did this with their iPods in the portable music market. If you use web 2.0 to solve an unsolved problem then you will need to justify your solution, and venture in to uncharted territory. "Flock":http://flock.com probably falls in to this category.
Whether you innovate or invent, just be sure to fill demand.