What it is ?

Web 2.0 is the term originally coined by O'Reilly Media in 2004 for the second generation of Internet-based services that emphasize online collaboration and sharing among users such as:
    1) Social Networking Sites
    2) Wikis: A  Wiki is  a Web  site  that  allows  the  visitors  themselves  to  easily  add,  remove,  and
        otherwise  edit  and  change s ome available content, sometimes without the need for registration.
        This ease of interaction and operation makes a wiki an effective tool for collaborative authoring.
    3) Communication Tools
    4) Folksonomies: A Folksonomy is an Internet-based information  retrieval methodology consisting of
        collaboratively generated,  open-ended  labels that  categorize content such as Web pages, online
        photographs, and Web links. A Folksonomy is most  notably  contrasted  from a  taxonomy in that
        the  authors of  the  labeling  system are often  the main users (and sometimes originators) of the
        content to which  the labels are applied. The labels are commonly  known as tags and the labeling
        process is called tagging.
        The process of Folksonomic tagging is intended to make a body of information  increasingly easier
        to search, discover, and navigate over time. A well-developed Folksonomy is ideally accessible as
        a shared vocabulary that is both  originated by, and familiar to its primary users. Two widely cited
        examples of websites using Folksonomic tagging are Flickr and Del.icio.us.


Key principles & characteristics of Web 2.0 applications:

    1) The Web as a platform
    2) Data as the driving force
    3) Network effects created by an architecture of participation
    4) Innovation  in  assembly  of  systems  and  sites  composed  by  pulling  together  features  from
        distributed, independent developers (a kind of "open source" development)
    5) Lightweight business models enabled by content and service syndication
    6) The end of the software adoption cycle ("the perpetual beta")
    7) Software above the level of a single device, leveraging the power of The Long Tail.

    Earlier users of the phrase "Web 2.0" employed it as a synonym for "Semantic Web," and indeed, the two concepts complement each other. The combination of social-networking systems such as FOAF and XFN with the development of tag-based Folksonomies, delivered through Blogs and Wikis, sets up a basis for a semantic-web environment.

As used by its proponents, the phrase "Web 2.0" refers to one or more of the following:
    1) The transition of web-sites from  isolated  information silos to sources of content and functionality,
        thus becoming computing platforms serving web applications to end-users
    2) A social  phenomenon  embracing an approach to  generating and  distributing Web  content itself,
        characterized by open communication, decentralization of authority, freedom to share and re-use,
        and "the market as a conversation"
    3) A  more  organized  and  categorized  content,  with a  far  more  developed  deep - linking  web
        architecture than hitherto-fore.
    4) A shift in  economic  value of the Web,  possibly  surpassing that of the dot com  boom of the late
        1990s.
    5) A  marketing - term used to differentiate new web - based firms from those of the dot-com boom,
        which (due to the bust) subsequently appeared discredited
    6) The resurgence of excitement around the implications of innovative web-applications and services
        that gained a lot of momentum around mid-2005

Tim O'Reilly gave examples in his description of his "four plus one" levels in the hierarchy of Web 2.0-ness:
    1) Level-3 applications,  the most  "Web 2.0",  which  could  only exist on the  Internet, deriving their
        power from the human connections and  network effects Web 2.0 makes possible, and  growing in
        effectiveness the more people use them. O'Reilly gives as examples: eBay,  craigslist,  Wikipedia,
        del.icio.us, Skype, dodgeball, and Adsense.
    2) Level-2  applications,  which  can  operate  offline but which gain  advantages  from  going  online.
        O'Reilly  cited  Flickr,  which  benefits  from  its  shared photo - database and from its community-
        generated tag database.
    3) Level-1  applications,  also  available  offline  but  which  gain f eatures online. O'Reilly  pointed to
        Writely (since 10 October 2006: Google Docs  &  Spreadsheets,  offering group - editing capability
        online) and iTunes (because of its music-store portion).
    4) Level-0  applications  would  work as well offline. O'Reilly gave the examples of MapQuest, Yahoo!
        Local, and Google Maps.  Mapping  applications  using  contributions  from users to advantage can
        rank as level 2.
    5) Non-web applications like email, instant-messaging clients and the telephone.

Examples of Web 2.0 (other than those cited by O'Reilly) include digg, Shoutwire, last.fm, and Technorati.