The company claimed 85 million downloads for the month of May, which put it on a pace to hit 1 billion in a year. In their year-end calculation they determined that the Wizzard servers were receiving an average of 2.75 million requests for podcast episodes per day in 2007, up 300% from demand in 2006. That number is dwarfed by TV and radio viewing numbers but none the less demonstrated strong growth and contradicts the perception that podcasting has failed to live up to its promise.

Key moves this year

In August the company acquired Libsyn, long the most visible vendor in the podcasting community, and hired Rob Walch of the popular show Podcast411 as its VP of Podcaster Relations.

Alex Williams, founder of the Podcast Hotel conference, told me that while the numbers were large, the news of Libsyn and Wizzard's momentum was not a big surprise. "They were first to the market and they executed," he said. "This demonstrates the value of that. Plus they have strong, stand-up people."

Muddy Waters

In addition to the challenge of verifying downloads, it's an entirely different question to ask how many users actually consumed the media they downloaded. Download and view numbers are generally believed to be widely inflated.

None the less, Wizzard's numbers were more than 10 times what competing networks have reported for 2007. Revision3 announced last week that it had played over 100 million "clips" and 25 million "shows" last year (with "an unprecedented 100% unaided sponsor recall" says the sales guy), whatever all that means. Video meta-network NextNewNetworks rode the fast cars and big boobs formula to more than 100 million claimed views in just 10 months of 2007. Podshow hasn't announced any numbers for 2007, which can't be good, but it did manage to spend a lot of money and lose Natali Del Conte to CNet. Perhaps it too topped a billion but was concerned that no one would believe them.

Libsyn love

Libsyn is widely appreciated but has in the past been criticized for some spells of down time. The company's own support blog reports a lot of problems with stats collection, but perhaps those are reports of problems solved and thus good news.

Libsyn charges podcasters a monthly fee for storage and delivery. When I asked people what they thought of Libsyn, almost everyone told me it was good and cheap. Further proof that you can charge people for online services today and they'll thank you for it.

Note: If you like podcasts, check out ours too. It's called ReadWriteTalk and even if you listened to it a billion times you'd still want more.

• Web Office: 2007 Year in Review
• Consumer Apps: 2007 Year in Review
• RSS: 2007 Year in Review
• Internet TV: 2007 Year in Review
• Digital Music: 2007 Year in Review
• Top 100 Alternative Search Engines of the Year
• Top Web Apps & Sites of 2007

• Feature posts on last100 in 2007, editor’s picks
• Best of ReadWriteWeb 2007, Editor's Picks

This post doubles as the final Weekly Wrapup of 2007 -- it's been a great year and all the best everyone for 2008! Here's looking forward to more Web innovation and startup success in '08!

On January 9, 2007 Steve Jobs announced at Macworld "three revolutionary new products": an iPod, a phone, an internet mobile communicator. But turned out it was all one device: the fabled iPhone. This is our number 1, because it finally made the Mobile Web real for the influential US market (and the geeks who bought it in America, then took it overseas and unlocked it! cough).

2. Facebook Announces Platform

Much has already been written about this announcement on May 24, but suffice to say that it ushered in a new era for social networks - where outside companies could deploy advanced functionality inside the Facebook site.

3. Google Acquires DoubleClick for $3.1B

On April 13 Google acquired online advertising company DoubleClick, which set off a frenzy of acquisitions in this space - notably Microsoft's $6B purchase of aQuantive. The Google/DoubleClick deal confirmed that online advertising was in a bubble period.

4. Google Announces OpenSocial

At the end of October Google launched OpenSocial, a set of common APIs for building social applications across the web, in a bid to cut off Facebook's momentum with third party developers. Perhaps the biggest part of this news was the world's largest SNS MySpace joining OpenSocial the day after.

5. Amazon Launches Kindle eReader

Despite mixed reviews of this e-Reader device with internet connectivity from Amazon, the Kindle promises to shake up the e-commerce giant's core business model - by delivering books electronically instead of the familiar brown box.

6. CNN/YouTube Debates

On July 23, eight Democratic presidential hopefuls took the stage in South Carolina -- a crucial early primary state -- for a debate sponsored by CNN and YouTube in which all of the questions were submitted by users of YouTube. The Republicans got their chance in September. In the same vein, 2007 also saw the MySpace/MTV Candidate Forums and the rise of web 2.0 tools in politics.

7. Google Announces Android

On Nov 5, Google announced an open-source mobile operating system called Android. This could significantly change the way that Mobile Web applications are developed.

8. Steve Jobs' open letter against DRM

On Feb 6, Apple CEO Steve Jobs posted his Thoughts on Music in the 'Hot News' section of the Apple website. In it he outlined why DRM should be abolished by record companies. And Jobs' pleas seemed to be heard by the record industry, with first EMI and then later Universal and Warner on AmazonMP3 ditching DRM.

9. Facebook Beacon Saga

Late this year Facebook announced a new advertising system that used retail data collected from its users. But after howls of privacy protests, Facebook had to back off some and make the system opt-in. It's also worth mentioning here another Facebook story that just missed this list: in October Microsoft invested in Facebook at a $15b valuation.

10. Adobe AIR

On June 10, Adobe officially unveiled Adobe Integrated Runtime, or Adobe AIR for short. Formally called Adobe Apollo, it is a cross-operating runtime developed by Adobe that allows developers to create Rich Internet Applications for the desktop. It was a close call between this and Google Gears (the offline browser plug-in), or Microsoft's Silverlight (a Flash-like plug-in) - both of which were also launched in '07.

What have we missed? What were your top Web tech stories of 2007?

Of course we have more plans for expansion in 2008. But as we're nearing the end of 2007, I thought I'd pick out 12 of my favorite posts over the past year - one for each month. These weren't necessarily the ones with the most page views, but they were significant to me and for RWW. I hope they also show the flavor of this year.

So here are my picks for 2007 from the RWW team:

January

The Top 100 Alternative Search Engines

This was the post that spawned a new network blog. Published Jan 29, Charles Knight wrote:

"Ask anyone which search engine they use to find information on the Internet and they will almost certainly reply: "Google." Look a little further, and market research shows that people actually use four main search engines for 99.99% of their searches: Google, Yahoo!, MSN, and Ask.com (in that order). But in my travels as a Search Engine Optimizer (SEO), I have discovered that in that .01% lies a vast multitude of the most innovative and creative search engines you have never seen. So many, in fact, that I have had to limit my list of the very best ones to a mere 100.

But it's not just the sheer number of them that makes them worthy of attention; each one of these search engines has that standard "About Us" link at the bottom of the homepage. I call it the "why we're better than Google" page. And after reading dozens and dozens of these pages, I have come to the conclusion that, taken as a whole, they are right!"

February

Yahoo! Pipes and The Web As Database

Alex Iskold tested out and explored the emergent world of Yahoo! Pipes. He saw some interesting parallels with Relational Databases in the 90's, concluding that with pipes, the Web essentially becomes a giant database that can be queried and remixed in any number of ways.

March

Interview with Google's Matt Cutts about Next-Generation Search

I had the pleasure of interviewing the head of Google's Webspam team, Matt Cutts. The topic of our conversation was Next-Generation Search. We discussed personalization, semantic technologies, alternative interfaces, structured data, and much more.

April

Your Guide to Online TV Guides: 10 Services Compared

Josh Catone set out to discover a new online TV guide. He found 10 services with all the web 2.0 bells and whistles - but was he satisfied?

May

Understanding Apollo

2007 was a year in which desktop apps made a comeback, thanks to technologies like Adobe's Apollo (which was later re-named AIR). During a visit to the US in April, I popped into the Adobe office in San Francisco to find out more about Apollo - the company's new RIA (Rich Internet Application) runtime and development platform. I learned what Apollo is and checked out some of the latest Apollo apps.

June

The Implicit Web: Last.fm, Amazon, Google, Attention Trust

Alex Iskold explored an important, growing trend:

"The basic concept of the Implicit Web is simple. As we touch information, we vote. When we come across an article we like, we spend time reading. When we like a movie, we recommend it to our friends and family. And if a piece of music resonates with us, we listen to it over and over again. We do this automatically, subconsciously or implicitly. But the consequences of our behavior are important. The things that we are paying attention to have great value to us, because we like them."

July

Pivots of the Web: What's Next After Social Networking?

Emre Sokullu took a closer look at the paradigm shifts of the web, especially for the near future. What approaches have dominated the web over the years and which ones failed; and why? Also, since Facebook is already widely accepted as the next big thing, the new question is: what is the next "next big thing"? Is it already out there?

August

The Web 2.0 Election: Does the Internet Matter in Election Politics?

Josh Catone explored the Web in politics - e.g. how the CNN/YouTube debates and the MTV/MySpace candidate's forums have been (and presumably will be) great ways for voters to genuinely connect with candidates on issues that matter to them. He concluded that this form of user generated politics can only be good for the political process in the long run.

September

10 Future Web Trends

We're well into the current era of the Web, commonly referred to as Web 2.0. Features of this phase of the Web include search, social networks, online media (music, video, etc), content aggregation and syndication (RSS), mashups (APIs), and much more. Currently the Web is still mostly accessed via a PC, but we're starting to see more Web excitement from mobile devices (e.g. iPhone) and television sets (e.g. XBox Live 360). This post looked at the near future of the Web.

October

2007 Web 2.0 Summit Review: How the Web 2.0 Conference Has Evolved Over 2 Years

My review of the latest Web 2.0 Summit. In some ways a companion post to the Future Web Trends post in September...

November

The RWW Guide to the World's Most Popular Twitter Clients

The most comprehensive comparison of the top Twitter interfaces that you're likely to find, courtesy of Marshall Kirkpatrick.

December

2008 Web Predictions

An appropriate way to wrap up the year, looking forward to the next. The above post has 67 comments as of now, so why not add your own predictions (if you haven't already)?

The post also predicts what will happen in digital music in 2008. Here's what Steve expects to happen with DRM:

Citing the popularity of iTunes Plus, in October Apple slashed the price of DRM-free tracks offered on iTunes, and early reports suggest that Amazon MP3 has also been a huge success (making it the number three digital music store in just one month). It therefore appears that ditching DRM has to some degree achieved the dual aims of invigorating the marketplace for digital music and creating a serious competitor to iTunes. As a result, many are predicting that 2008 will be the year that DRM is ditched completely, as all the major labels come on board, and I think this will be true for traditional music downloads.

However, in another context, DRM’d music looks like it’s here to stay for the foreseeable future at least. Subscription-based services still require the use of DRM and may become more acceptable to consumers as broadband becomes ubiquitous, enabling our music collection to “live in the cloud”, accessible anywhere and anytime.

Check out the full post for more; including details on mobile music stores and services, Radiohead’s pay-what-you-want experiment and other alternative models. You can also digg the post here.

Even though Facebook was our BigCo of the year, not everything worked as planned for the company. Their biggest and most public screw up was the roll out of their new ad system, Beacon. We started getting wind of Beacon in early November when leaked screenshots showed how Beacon would work by sending activity information from third-party sites to the Facebook newsfeed.

Facebook launched their new ad platform a few days after the screenshots hit the web with CEO Mark Zuckerberg calling it a "completely new way of advertising online." To their likely chagrin, Facebook faced a major backlash from the press, bloggers, and privacy rights advocates over Beacon. While we questioned how much users actually cared about Beacon, consumer advocacy group MoveOn.org made sure it was a big issue in the press. Eventually, Facebook issued a mea culpa and made the program completely opt-in, putting the dark saga behind them (we think) .

Yahoo!'s 100 Days of Futility

Okay, that headline may be bit a harsh, and things might indeed be looking up in Sunnyvale following a strong Q3 earnings report in October, but 2007 was definitely not Yahoo!'s year.

In June, Valleywag noticed just how many members of Yahoo!'s management team had left the company -- a trend that would continue all year. Indeed, a couple of weeks after the Valleywag post, Yahoo! announced that CEO Terry Semel was out and co-founder Jerry Yang would replace him. In his introduction as CEO, Yang laid out his infamous 100 days strategy:

"Looking ahead, we want to dramatically improve our performance and capture the major growth opportunities we see ahead for the Internet. I intend to spend the next 100 days or so focused on mapping out a strategic plan for the long-term success, working with our teams to put the right organization and the right people in place, and making any necessary changes.

We are well on our way with a top to bottom review of our business in order to effectively address the company's challenges and capitalize on our many great opportunities."

But with the 100 days now long gone (the last day was a couple of months ago), not too much has changed at Yahoo! They trimmed a little fat and their earnings looked a little brighter for the quarter (though it seems unlikely that the CEO switch had much to do with that), but there were no major reorganizations or strategy changes. As Kara Swisher snarkily wrote on Day 99, "But no massive cuts, no major management upheavals, no drastic shift in business, no game-changing purchases and no being acquired either. Then again, there’s still one more day to go!

Yahoo! did make a couple of major acquisitions during Yang's review time, dropping $350 million to acquire Zimbra, an open source web office company, and also buying BlueLithium, an ad network, for $300 million. But will those acquisitions be what Yahoo! needs to take on Google and Microsoft in web advertising? Is that even what they want to, or should do?

When we asked you in August "Will Jerry Yang turn around Yahoo's fortunes in 100 days?" a plurality of you (46%) responded, "Yes, Yang will sort Yahoo out and have them challenging Google and MS again." It would be interesting to hear what you think now that the 100 days is over (use the comments). For their part, Yahoo! is betting that their future (and ours) lies in social networking. Too bad they never could close that Facebook deal...

eBay Writes Down Skype Purchase

Analysts were initially mixed on eBay's 2005 $2.6 billion purchase of Skype. "I think there were much closer synergies between eBay and PayPal than Skype and eBay," said David Edwards of American Technology Research at the time. "This is definitely a significant risk and a longer-term play."

Turns out, he was right. In October, eBay announced that it was writing down $1.4 billion of its Skype purchase, which means that it was adjusting the book value of Skype because it was now seen as overvalued (i.e., they paid way too much). The writedown led to a dismal third quarter for the company which posted a $935 million loss. According to Techdirt, writing down the Skype purchase indicated that "that Skype's growth has been a lot weaker than the company had hoped." Oops.

edgeio Folds

edgeio was a "edge-feeder" that aggregated classifieds from all over the web into a single place using RSS feeds. The company raised $1.5 million in angel money and then in October 2006 closed a $5 million series A funding round from Intel Capital and Transcosmos Investments. By December of this year, the company was dead, having run out of money. The company's assets were sold earlier this month to LookSmart for $280,000.

In and of itself, this isn't a huge story. Startups fail all the time, and edgeio just burned through $5 million, not $360 million like Amp'd Mobile. The only reason edgeio makes our list is because of who was behind it. Many startups came and went this year, but not a lot that were co-founded by the man who the San Francisco Chronicle calls "'Mr. Web 2.0, a kingmaker among Silicon Valley entrepreneurs." That man is Mike Arrington, who runs the wildly popular TechCrunch blog.

Though Arrington says his involvement with the company has mostly been as a board member, it is hard not to notice when a company co-founded by one of the most influential men in Silicon Valley fails.

AOL Buries Their Digg Competitor

In June 2006, with Jason Calacanis at the helm, AOL relaunched Netscape.com as a competitor to social news site Digg. The site never really caught on, but as TechCrunch notes, the rebranding to Propeller was even worse.

From it's peak of 305 million page views per month in November 2006, Netscape saw a drop in traffic of 55.1% over the next 9 months to 137 million page views in August 2007. But when AOL decided to move Netscape to Propeller, the site only managed to capture just under 10% of their August Netscape audience (Propeller had 13 million page views in November of this year, according to comScore).

In that same period, Digg's traffic has increased 318% and Reddit has also seen growth.

Windows Live Branding Mess

Seriously... what? One only has to look at "The List" from the LiveSide blog (which displays all of the Windows Live products) to understand just how impossible to understand Microsoft's branding strategy is. Often times it seems like Microsoft just slapped the "Live" name on all of their new web services (and some offline ones) without any thought as to how they might fit together.

In February we wrote about how confusing Windows Live as a branding strategy was. At the time Richard MacManus wrote that "Windows Live is a good enough brand, signifying Microsoft's set of Internet-connected software and services. But right now the name is being applied inconsistently and is also leading to unwieldy brand names (Windows Live for Windows Mobile being the latest example)."

Things are not any more clear at year's end. Let's hope 2008 brings a more easily traversed Microsoft product line. But really, don't hold your breath.

Near Miss: Twitter Down for Nearly 6 Days in 2007

According to Royal Pingdom, Twitter was down for almost 6 days (5 days and 23 hours to be exact) in 2007. For any other company, this might spell doom, but not our LittleCo of the year! If anything, the service has gotten more popular in spite of the frequent down time. Those with "Twitterdiction" may have suffered through some nasty withdrawal when Twitter went offline for extended periods of time, but abandon the service they did not.

So check out our predictions for '08 and please contribute your own in the comments. Also you may want to review our track record for 2007 Web predictions.

1. Semantic Apps will become popular in 2008, due to their ability to get better content results and make better data connections. Think search engines like Hakia and Powerset, wikipedia-like efforts like Twine and Freebase, and apps that use semantic technologies under the hood (such as AdaptiveBlue and Snap).

2. In tandem with #1, Google will experiment more with Semantic Apps in '08. The Knols project, although not overly semantic, is a hint of this direction.

3. Web Services platforms will be a fierce battleground in '08, with Amazon, Microsoft, Google, Mozilla and others competing to provide 'Web OS' and online storage to consumers. Unfortunately this may spell the end of a number of startups in this space.

4. Zoho and/or ThinkFree will be acquired by big companies wanting to leapfrog into the Web Office space.

5. The online advertising market will consolidate, after the spate of acquisitions in 2007. CPM will continue to dominate for media brands and CPC for niche sites, although there will be experimentation in VRM and other forms of highly specific targeting of ads. Privacy issues will prevent the latter from becoming mainstream though. The much-hyped CPA (Cost per Action) will continue to be a pipe dream, because publishers simply don't want it.

6. The big Internet companies will surprise us all by embracing open standards, and attempting to compete with each other with features instead of data lock-in (OK, this could just be wishful thinking!).

7. The most interesting innovations on the Web in 2008 won't happen in Silicon Valley, but in Asia (China, Japan, Korea). At least one startup from China will break through in the US market with Twitter-like success in 2008 - and it will almost certainly be a Mobile Web app.

Marshall Kirkpatrick, Lead Writer, ReadWriteWeb:

1. Twitter will be acquired.

2. Most ad networks will start producing their own content to advertise against; and some content companies today will get acquired by ad networks.

3. Online video will become so ubiquitous, including live and mobile, that everyone will wonder how the internet existed without it. It won't feel like a big deal, though.

4. A handful of big companies will let you start logging in with an OpenID associated with your account.

5. The value of recommendation engines will become all the more clear; the era of data will be celebrated.

6. People will rebel against Google, at least a little bit. Maybe.

7. People engaged in the new web will do some really awesome stuff that we'll all be in awe of.

Josh Catone, Lead Writer, ReadWriteWeb:

1. Tumblr will be acquired.

2. Privacy will be a growing concern in the mainstream, but ultimately people won't really take any action and for the most part, things won't change. Some companies and groups (think Mozilla) will push for better privacy controls for users, while others (think Facebook) will continue to push the envelope and continue down a slippery slope. Users will eventually push back, but I am hesitant to say that proverbial "straw that breaks the camel's back" will come in 2008.

3. OpenID will be adopted by more startups and larger web companies, but most people (mainstream users) still won't use it - that's a couple of years off.

4. Facebook will continue to grow and their platform will be adopted by other large social networks. Google will sweat.

5. Mobile web usage will be a big story in 2008. It's already big in many parts of the world; and Westerners are about to get hooked. With new mobile devices that makes web surfing less painful, people will be more and more connected away from their computers.

6. Mainstream media coverage will be a catalyst for the adoption of Web Office apps by consumers; and Microsoft will eventually be forced to change their Web Office strategy and offer a fully online office suite (but that latter won't happen in 2008). Offline mode (Gears, AIR, Silverlight, etc.) will be what really tips the scales and causes mainstream users to to embrace the as-of-yet unfamiliar world of Web Office applications.

Alex Iskold, Feature Writer, ReadWriteWeb:

1. 2008 will be slow and cautious, with the first half dominated by recession or fear of recession.

2. Facebook is going to see the same kind of decline in popularity in 2008 that MySpace saw in 2007.

3. Digg is going to be acquired by one of the mainstream media conglomerates.

4. Implicit applications, which monitor our habits and automatically infer our likes, will rise.

Emre Sokullu, Feature Writer, ReadWriteWeb

1. Facebook will acquire companies that do the following, in order to strengthen their advertising unit: personalization, behavior tracking, image recognition (Riya?)

2. Facebook will release a browser.

3. However, despite all that... Facebook will decline.

4. Google OpenSocial will be a failure; Google will try to create its own social networking empire by making acquisitions in this space.

5. Microsoft will become more aggresive and buy many popular companies at once (remember Ballmer's quote). Candidates include SixApart, Technorati.

Sean Ammirati, Editor, ReadWriteTalk (our podcast show):

1. Google will really start looking vulnerable in 2008. While the 'one trick pony' comment by Steve Ballmer drew sarcastic responses, this will begin to look prophetic. While they'll maintain market share in the search industry, the lack of traction in any other of their other initiatives will start to cause frustration. Plus, they will increasingly be perceived as the 'evil' company in many of these new initiatives.

2. Closely related, Yahoo's Hack strategy (see ReadWriteTalk's podcast with Bradley Horowitz) will start to bear fruit and things will look much more optimistic in Sunnyvale this year.

3. Facebook will start to feel pressure from two trends that will emerge on the web: distributed social networks and distributed commerce systems. For distributed commerce systems, look to see a first proof of concept from the VRM project. Chris Messina's diso project with Wordpress will be a great proof of concept for distributed social neworks.

4. Non-search advertising on the web will increase in value significantly. This will be done through a lot of innovation in the ad targeting systems (both behavioral and contextual) and new metrics being adopted by Madison Ave beyond CPC and CPM.

5. There will be a lot of innovation in the hyper-local space, putting the final nail in the newspaper industry's coffin. This will include companies like Outside.in and Yelp moving toward widespread use and new web properties (from both startups and big Internet Cos) emerging.

6. Finally, a 3G iPhone! OK, I don't know if this is a prediction, but I really really want it to be true :)

Charles Knight, Editor, AltSearchEngines (RWW network blog)

1. In the 1st Q 2008, the true "Google Killer" in search will be in Stealth Mode. In 2nd Q 2008 the first prototype will begin in closed Alpha mode. In 3rd Q 2008 it will be ready for the final closed Beta testing. In 4th Q 2008 it will launch and "Rock and Shock" the world!

2. The classic Vertical Search Engines (Job Search, Health, Consumer Electronics, Shopping, Video, People, more...) will continue their dominance over all other Search Engines in their various niches.

3. The Alternative Search Engines will pick up the pace of partnerships and cooperation, for their solid mutual benefit.

4. Mainstream Media interest in the Alts will increase until it begins to rival coverage of the five major search engines.

5. The trend towards 'widgetization' of the Alts will continue. Approximately 2 in 10 Alternative Search Engines (20%) have widgets now, and that number will double in 2008 to 4 in 10 or 40%.

Conclusion

Now it's time for you to tell us your Web predictions for 2008. Please leave a comment or trackback below!

Crystal Ball image by Blue Cubic Electron Syncrony, via Flickr

While the market for Internet TV is growing steadily — survey after survey shows that people are consuming more video online than ever before — as 2007 draws to an end, Google-owned YouTube is still the number one video destination site.

This isn’t just true in terms of traffic but also in terms of “mind share”; when people talk about online video they often refer only to YouTube. As a result, a number of hardware companies have added YouTube support to their devices in 2007, such as YouTube-compatible cameras and mobile phones capable of viewing and publishing video to YouTube.

And then there’s the strong relationship between Google and Apple, which this year has led to YouTube support being added to both the AppleTV and iPhone, with a change in the video format to boot. Apple successfully persuaded YouTube to start re-encoding its video catalog to the much higher quality (and Apple-preferred) H.264 codec.

Not one to rest on its laurels, YouTube introduced a number of new features of their own, including a redesiged player, the introduction of interactive overlay ads, better copyright filtering, and — like many Google properties — improvements to its mobile offering.

What can we expect in 2008?

Coinciding with improvements to the quality of Flash video, YouTube co-founder Steve Chen has said that the company is currently testing a version of its player that detects the speed of the viewer’s Internet connection and serves up higher-quality video if the user wants it. According to Chen, we can expect to see higher-quality playback on YouTube as early as February 08.

Also in part related to an upgrade to Flash Lite (Adobe’s version of Flash for mobile devices) that adds full support for Flash video, along with the launch of Google’s mobile phone-oriented OS called Android, 2008 will likely see YouTube being offered on an ever greater number of mobile devices.

On the content front, with Google stepping up its monetization options for YouTube, including expanding its ad-revenue share scheme with independent producers, 2008 may well see more professionally-produced video being offered on the site.

Television networks and movie studios reluctantly experiment

In 2007 we’ve seen a large amount of online experimentation from the television networks (both in the U.S. and UK) and, to a lesser extent, from the major movie studios too. The problem, however, is that many seem to have been doing so with their hands tied behind their back.

In September, we took an extensive look at what the U.S. television networks, ABC, CBS, NBC, Fox, and The CW, were offering on their own websites. Dan Langendorf wrote at the time:

The good news: Major U.S. television networks continue to embrace Internet technology and are putting their shows on the Web for online viewing, just like they did last year.

The bad news: Their online offerings remain sporadic; their Internet strategies feel like “we have to” rather than “we want to”; and — worst of all — they still haven’t embraced the idea that we are living in a new digital world, with different rules, participants, and expectations all around.

This year also saw a number of new efforts by the U.S. television networks to offer their content elsewhere on the Web (not just through their own sites), embracing both ad-supported models and paid-for rental and to-own.

On the ad-supported front, the big news was the launch of the much awaited video destination site Hulu, a joint venture between News Corp. and NBC that offers streaming video of both companies’ television and film content along with offerings from other studios such as Sony Pictures Television and MGM. While many industry pundits were skeptical of Hulu’s chances, upon viewing a Beta version of the site, early reactions have been positive.

NBC, who in some ways seem the most willing to experiment, also launched a Beta version of NBC Direct, an Internet-based catchup TV service. We came away unimpressed by NBC’s thinking, however, noting that shows are only available up to seven days after broadcast, and once downloaded, expire after 48 hours.

With regards to paid-for downloads of television shows, 2007 was also the year in which NBC and Apple’s iTunes divorced. Following a very public spat, NBC chose not to renew its partnership with Apple and is instead selling downloads through Amazon’s UnBox, Sandisk’s Fanfare, and Netflix, among others.

In July we took a look at the Internet TV offerings of the five major UK television broadcasters, noting that the then yet-to-launch iPlayer from the BBC looked the most promising.

However, when the iPlayer finally launched it wasn’t without controversy. The BBC was accused of being corrupt due to the iPlayer’s reliance on Microsoft technology and its lack of Mac/Linux support, and UK ISPs were reportedly critical of the application’s use of peer-to-peer technology and potentially high bandwidth costs. Answering the former, in October the BBC announced it had partnered with Adobe to develop a streaming version of iPlayer based on Flash that will be compatible with Windows, Mac and Linux PCs, and possibly mobile devices in the future.

In the movie download space we compared eleven download stores, concluding that “it’s still very early days in the paid-for video download space, where so far, greater competition hasn’t produced nearly enough innovation in terms of pricing and convenience — particularly in relation to copy-protection.”

What can we expect in 2008?

There’s evidence to suggest that watching full length TV shows online is becoming increasingly popular, in part due to higher broadband penetration rates but also because the studios are making more of their content available on the Web. Encouraged by this, we hope to see the television networks and movie studios take greater risks, although don’t expect the constraints of traditional scheduling and release dates or geographical territories to go away anytime soon.

One likely possibility is that iTunes will start to offer online movie rentals, putting Apple in direct competition with Netflix.

In the UK, broadcasters, BBC, ITV and Channel 4 have announced an initiative to develop a combined service for accessing their on-demand and catch-up services. The new service is currently known under the working title “Kangaroo”, and if approved by the BBC’s governing body, could emerge in 2008.

Internet TV comes to the desktop

The year 2007 is definitely the year of the desktop Internet TV application, with a number of companies launching products that aim to combine a TV-like viewing experience with the best of the Web.

Joost, founded by the team behind Skype, is the most high profile, along with Italian billionaire Silvio Scaglia’s Babelgum. Add to list VeohTV, Zattoo, Livestation, Next.TV (backed by HP), Adobe’s Media Player, and Microsoft’s Internet TV, and it becomes clear how crowded this space has got in 2007.

What can we expect in 2008?

The jury is out on whether people are really willing to leave their web browser and use a number of separate desktop applications in order to get their Internet TV fix. A big question mark also remains around whether the various desktop offerings will be able to secure enough compelling content in order to compete with the Web as a whole.

PC-to-TV and set-top box ambitions

Admittedly we at last100 are more obsessed with PC-to-TV and Internet connected set-top boxes than most industry watchers and consumers alike — 2007 has been a fairly busy year for these type of devices.

The biggest launch was that of the AppleTV, which at the time Steve Jobs hailed as the final piece to Apple’s digital lifestyle strategy, since the device bridges the gap between the PC and the television. However, the AppleTV has been far from a smash hit, with worldwide sales reportedly as low as 400,000 units, a dwindling amount of video content following the NBC Universal loss, and Jobs himself repositioning the device as the company’s “hobby”.

In comparison to the AppleTV, which feels far too tied to the iTunes store, in 2007 TiVo added numerous third-party web services to its line of broadband-enabled DVRs.

This year saw the launch of the Vudu set-top movie box and accompanying download store.

Microsoft and its partners’ unveiled the latest Windows Media Extender devices, with new functionality including higher-speed wireless and DivX support.

Sandisk also entered the PC-to-TV space, with the launch of TakeTV and download service Fanfare.

But perhaps the two companies who best positioned themselves in 2007 to eventually solve the PC to TV problem, along with getting Internet content into the living room, are Microsoft with the XBox360 and Sony with its PlayStation 3.

What can we expect in 2008?

While the market for PC-to-TV devices will remain modest, getting Internet content directly into the living room will remain the pursuit of many companies, particularly Apple, Microsoft and Sony. For example, we’re pretty confident Apple will take a second stab at the AppleTV, and Microsoft and Sony will ramp up their efforts to offer more video and other content through their respective game consoles. Also expect TiVo to continue to add more web services to it DVRs.

Other companies to watch in 2008, in relation to set-top box activity, are Netflix, DivX and possibly Joost.

DivX support is everywhere

Another trend in 2007 was an increasing number of devices supporting DivX video, most notably Microsoft’s Extenders for Media Center and XBox 360, as well as forthcoming DivX support on the Sony PlayStation 3. Additionally, DivX has developed a reference design for its own DivX enabled set-top box, and Sandisk added DivX support to its Sansa line of portable media players.

What can we expect in 2008?

More of the same.

Social Networking

Social networking has been making headlines for the past few years. In 2005, News Corporation made a huge splash in the social networking market when its Fox Interactive Media division purchased MySpace for a cool $580 million. However, though MySpace remains by far the largest social network on the web, it has been new kid on the block Facebook that has been stealing all the headlines since fall of last year when it opened up beyond the college audience that had been its bread and butter. 2007 was an especially good year for Facebook and the company has made a number of moves that pushed the entire social networking market.

According to Compete, MySpace actually saw traffic fall this year, while Facebook enjoyed a 111% up tick in monthly unique visitors (in the "people count" metric, Facebook showed similar growth). Facebook nearly caught up with its rival in search volume, and overtook MySpace in press mentions by the end of the year.

To what does Facebook owe their amazing growth? In part, perhaps, because of the launch of their platform in May. The platform allowed outside companies to hook into Facebook's massive user base. Almost immediately we began to hear the success stories, such as iLike, whose application was added by 10,000 users in the first 10 hours of the platform's existence and by nearly 5 million in the first two months.

Facebook now has over 100,000 application developers working on platform apps, and over 85% of their users have added at least one app to their profile. The success of Facebook's platform initiative compelled other social networks to consider their own platform strategies. The rumors started to fly. First LinkedIn was getting a platform (which they have finally made good on). Then it was MySpace's turn. Finally, and most impressively, the world's second most valuable technology company announced their plans to compete with the Facebook platform.

Google's OpenSocial arrived in November with some of Facebook's biggest competitors as launch partners: Ning, LinkedIn, Hi5, Friendster, orkut, bebo, and the big daddy of the them all, MySpace. However, many of those companies have continued to build out their own platforms and Google's initiative has so far failed to deliver anything very concrete. Facebook may have had the last laugh when it announced last week that it was opening up its platform architecture. Facebook's first partner? bebo, an OpenSocial participant.

So influential has Facebook been on the Internet in 2007, that Microsoft agreed to invest $240 million in the company for what amounts to about a 2% stake. This deal shot Facebook's paper valuation into the stratosphere and gave it the cash it needs to take on competitors like Google and MySpace.

But not everything is rosy for Facebook. Following the launch a controversial new advertising system last month, Facebook faced a backlash from the media and consumer advocacy group MoveOn.org. Even though it appears that Facebook put the issue to rest with an apology and policy change, as Danah Boyd notes, this is the third time in the past couple of years that Facebook has pushed the envelope on privacy issues. They are practicing a form of "slippery slope" software development, she says, and users may not continue to stand for it.

Look for social networking to continue to play a major role in our lives in 2008 as the platform war brewing between Facebook and Google (and the others?) heats up.

Personal Publishing

The other area in the vast consumer application space that was extremely influential this year was that of personal publishing. No one company has been more disruptive than our top LittleCo, Twitter.

A pioneer in the area of "microblogging," Twitter is, as Alex Iskold recently wrote, a natural evolution of personal publishing that fills the gap between blogging and social networking. Twitter really picked up steam at the SXSW conference last March and has since become something of a phenomenon. In fact, people are even talking about "Twitterdiction" to describe how passionately some users feel about the service.

As we wrote when naming Twitter our best LittleCo of the year, the company truly "stands out as being something that has captured the imagination and become a new hybrid of chat, social networking and blogging." But perhaps one of the most interesting things that has come out of Twitter, is how it has pushed the creation of an entirely new type of personal publishing.

Probably the second-most talked about microblogging app after Twitter (which some might not really classify as a microblogging app at all -- but lets leave semantics aside for now), is Tumblr. Tumblr takes the traditional blog form, and strips it down to a sort of stream of consciousness inspired state in which posts are meant to be short and to the point: a single photo, video, quote, link, or thought. Tumblr certainly wasn't based on Twitter (it was based on "tumblelogs" like projectionist or Anarchaia), but Twitter's success really opened the door for more microblogging apps to be developed.

These tools are important because they are highly accessible. Microblogging apps like Tumblr and Twitter are pushing personal publishing into the mainstream in ways that probably hasn't been done in the past. Though disputed, Forrester Research reported that 6% of US adults use Twitter regularly. That's remarkable for such a young service (and one that actually has something of a learning curve to really "get").

Just how important is this new form of personal publishing? Important enough for Google to purchase Twitter rival Jaiku in October for an undisclosed sum.

Other

Facebook and Twitter weren't the only things to happen in consumer apps this year, just the most disruptive and influential.

IPTV: Another of the most anticipated and talked about startups of the year was Joost. Founded by Janus Friis and Niklas Zennstrom (you know, the Kazaa and Skype guys), Joost is an IPTV service that delivers streaming, on demand television over the Internet using P2P technology. Though they have signed a number of major content deals, including Adult Swim, Warner Bros. Records, the National Basketball Association, and CNN, Joost has yet to really capture the attention of the mainstream. See our full review of Joost, which compares the service to competitors Babelgum and Zattoo and be sure to check out last100's 2007 Internet TV review.

Politics: Also in 2007, web 2.0 began to play a big role in US presidential politics. Following the trail that Howard Dean blazed in 2004 with his innovative use of blogs and Meetup.com to mobilize grassroots support, this year saw candidates utilizing social web apps as never before. Having a profile on top social networking sites became almost mandatory -- almost every major party candidate had a presence on MySpace and Facebook, and some also utilized LinkedIn, Twitter, and others. YouTube held candidate debates with CNN and MySpace got in on the act with their Candidate Dialogues. Some candidates even began broadcasting live on UStream (like Dennis Kucinich or Chris Dodd, for example). The use of consumer web apps in politics is only likely to heat up in 2008 as applications continue to reach more mainstream Americans and the presidential races progress in the United States.

Web Office: Another hot area in the consumer apps space in 2007 was the web office. Because Richard MacManus already wrote a detailed year end wrap-up of that entire market, I'll be brief in my comments. With the continued maturation of online office suites, especially Google Apps and Zoho, and with Microsoft finally starting to show its online office hand, web office is a very hot sector. And while enterprise customers are who the real battle will be fought over, many of the current crop of offerings are mature enough for home use. Consumers already have access to fairly reliable, fairly complete online word processing, spreadsheet, presentation, and email applications. Be sure to check out Richard's write up for a more detailed overview of what went down in the web office this past year.

iPhone: Finally, I will take a moment to mention the Apple iPhone. No other product launched this year has captured the imagination of the press and the public like the iPhone, and with good reason. The iPhone has the potential to be a truly game changing gadget that forces other mobile device manufacturers to make a quantum leap in cell phone functionality. One of the areas that the iPhone can make the largest impact is in the adoption of the mobile web via its ability to so elegantly bring the entire Internet to your pocket. Be sure to read Alex Iskold's list of reasons he loves his iPhone as well as his follow up wish list for the device.

Your Turn

What do you feel were the most impactful consumer apps of 2007? What service or product did we leave off of our wrap up (and there were many!) that you think we really should have paid more attention to? What do you think will be the big trends of 2008? Let us know in the comments below.

Originally we planned to pick the most promising Web company for 2008. But in the end the ReadWriteWeb team decided to follow the example set by Time magazine last year, when it named "You" as its 'Person of the Year'.

We've seen many examples of the open source movement ramping up on the Web this year:

- Web browsers; Mozilla's Firefox web browser is perhaps the best example, having made significant ground on Microsoft's proprietary browser in '07. And just this week Opera picked a legal fight with Microsoft in Europe, citing lack of open source standards as one of its complaints.

- Social networks have begun to open up; Facebook's platform, followed by Google's OpenSocial (a set of common APIs for building social applications across the web) and now seemingly every social network is opening their platform. None of these are completely open, but the trend is for that to eventually happen.

- The drive towards open standards on the Mobile Web; Tim Berners-Lee and the W3C continue to push for this. And as Rudy De Waele wrote on this blog, mobile 2.0 is about "open standards, open-source development and open access - creating more options for the user, not enclosing them in the walled gardens currently (still) used by operators."

It's worth mentioning Android Mobile OS here, the open-source mobile operating system that Google announced in November this year. Android will be available for any phone manufacturer to install and build on top of. It will allow for extensive use of Google applications, mashups based on those applications combined with third party apps and will in time live on portable devices other than phones, like car navigation systems.

- Microformats, the Web community's open standards for structured data, has a lot of promise - expect to see them implemented in not only Firefox but IE and the other browsers next year.

- The distributed group of developers working on the Open Authentication spec OAuth recently released what they hope will be the final draft of their 1.0 version. The OAuth spec will create a standardized way for applications to request permission for access to user info from other applications and for info-holding services to communicate clear rules and options for accessing parts of the data they hold.

- The open identity system OpenID 2.0 was launched in December (see Marshall Kirkpatrick's review) - this will hopefully be the catalyst for more Internet companies to adopt it in 2008.

- An open ad network is a viable alternative to Google Adsense. We reviewed a new initiative called OpenAds in June, so this will be interesting to watch in 2008.

Conclusion

We could name more open source opportunities for the Web in 2008 (and please add them in the comments), but Alex Iskold summed up the potential for 'open data' with this diagram:

As Alex wrote here: "The old perception is that closed data is a competitive advantage. The new reality is that open data is a competitive advantage. The likely solution then is to stop worrying about protecting information and instead start charging for it, by offering an API."

So overall, we think 2008 will be a bumper year for the Open Source movement on the Web. What do you think? What other parts of the Web are ripe for open source initiatives next year?

These picks are something we do every year, this being the 4th year. Last year's Best LittleCo was YouTube, with Sharpcast selected as Most Promising. In 2005 37Signals was Best LittleCo and Memeorandum (now Techmeme) and Digg were joint Most Promising. In 2004 Ludicorp, creators of Flickr, was Best LittleCo and Feedburner was named Most Promising.

And the Winner is...

As with the BigCo selection, the Read/WriteWeb authors were unanimous in our decision. The Best LittleCo of 2007 is Twitter, Inc. Already this week there has been a lot of analysis about Twitter, with some people embracing it and others critical. Our own Alex Iskold summed it up well in his post entitled The Evolution of Personal Publishing, when he described Twitter as a kind of mix between social networks and chat. The term for this has come to be know as microblogging. Here is how Alex described it:

"Social network publishing is very terse, blog publishing is verbose. Is there a form of publishing which is on one hand as easy as social networking, but as sequential as regular blogs? Twitter and Tumblr have recently emerged to define this new category of microblogging."

The simple idea of Twitter is to express what you are doing right now, in 140 characters or less. Admittedly Twitter is still very much a niche, geek activity. Earlier this year I witnessed a fellow Web 2.0 Expo attendee twittering on a mobile phone while walking down a busy San Francisco road with a group of us - and she tripped up and fell. Which kind of sums up Twitter for the early adopter, geek crowd: it is addictive, distracting, and not really necessary.

However RWW did highlight some real-world uses this year - e.g. Amazon uses it to promote its products; and Burmese bloggers used a similar product to Twitter, a lightweight messaging service called CBox, to post very short updates from inside the country.

Twitter is undoubtedly new and disruptive. In a year in which you can count on one hand the number of disruptive Web products (iPhone would be another), Twitter stands out as being something that has captured the imagination and become a new hybrid of chat, social networking and blogging.

One of the most important things Twitter has done is open up an API to outside developers (this is an argument that co-founder Biz Stone made to us in September). According to Twitter, the API has seen such incredible growth, that just months after it was released it is already getting 10 times the traffic of the Twitter web site. For examples, check out our Top 10 Twitter Apps from July; and Marshall Kirkpatrick's comprehensive RWW Guide to the World's Most Popular Twitter Clients.

One of Twitter's cheif rivals, Jaiku, was acquired by Google in October. Other similar products that impressed us this year included (but not limited to): Tumblr, Kyte (a video twitter), Soup, Pownce, and the 10 microblogging tools we reviewed in September.

See Also: Evolution of Communication: From Email to Twitter and Beyond

Nominations? Most Promising Web Company for 2008

So there you have it, Twitter is our Best LittleCo this year. Now we turn our attention to what is the most promising Web product or company for 2008 - and we need your help! Let us know in the comments what is most promising for you, and why. We'll announce this very soon!

Last year's Best BigCo was Google, an honor it also won in 2004. In between, in 2005, Yahoo was adjudged Best Bigco. So can Google win the title for a third year - and become the Internet equivalent of the Chicago Bulls in the 1990's? Or will one of Yahoo, Microsoft, Amazon, eBay, Facebook or another BigCo take the silverware (metaphorically speaking)? Read on to find out...

And the Winner is...

The Read/WriteWeb authors were unanimous in our decision, but it was a close contest between two BigCos. You can probably guess that one was Google, because it's been another bumper year of innovation and acquisitions at the Googleplex. All through the year we've been delivering the Weekly Wrapup of Web tech news, reviews and analysis - and seemingly every week there was something new about Google. But there was another company that really came of age this year; and more importantly it was the catalyst for some important Web trends. Last year this Silicon Valley based company was not among our BigCo list - it was shortlisted for Best LittleCo! In 2007 that all changed though. And by the end of the year, it had done enough to even trump Google as a big influential Internet company. The winner is:

Things started to get interesting for social networking company Facebook on May 24 this year, when it announced a new "open" platform - a system enabling 3rd party companies to integrate their services inside of Facebook user pages. The new platform went beyond the ability to post media from outside into Facebook and beyond the previous Facebook API (a read-only API). With the new platform, outside companies were for the first time being allowed to deploy advanced functionality inside the Facebook site. For the social networking industry as a whole, it was a significant move - because up till then it had been a relatively closed system that was tightly controlled by the hosts (MySpace, Facebook, et al). Simply put, no other Internet bigco had opened its platform to such an extent before.

Although Facebook's platform wasn't quite as open as initially claimed, it nevertheless gained immediate traction. Many startups integrated their products into the Facebook platform and over 2007 Facebook's user growth ramped up and became mainstream. Also the Facebook platform had a major influence on its competitors. Google followed up on 1 November with OpenSocial, a set of common APIs for building social applications across the web. MySpace, Facebook's main competitor, joined the OpenSocial alliance that same week.

In November Facebook announced a controversial new advertising system, nicknamed Beacon. It was an attempt at conversational marketing, where users become product promoters and are encouraged to spread the word about things they buy and use among their group of friends and contacts. It had major privacy issues though and the company later added a privacy control that allows users to shut off the program completely. Even after all that, Beacon is a pointer to the future of online advertising - where your personal and social 'attention' data will influence the ads you see. At around the same time, MySpace announced a similar advertising program it called "HyperTargeting," which uses profile data to target ads to users.

Google

We mentioned above that it was a busy year for Google. The Mountain View company has undoubtedly been the most influential Internet company of the 'web 2.0' era - and you could fairly argue that Google's actions were far more wide-ranging and influential than Facebook's this year.

In 2007 Google made moves in the Web Office market, acquired a number of companies (such as Feedburner and DoubleClick), launched OpenSocial, released an open-source mobile operating system called Android, ramped up its personalization efforts (more info here), built up its Gadget ecosystem, launched voice search, Google Gears, Street View Maps, Universal Search -- and a lot of other Web initiatives.

Despite all of this, we concluded that Google didn't shake up the Web industry this year as much as Facebook. For example, on closer inspection OpenSocial wasn't as innovative as it was hyped up to be by many bloggers and commentators. Plus it was almost certainly a reactionary move against Facebook. We're interested in your feedback though - do you agree with our choice of Facebook over Google? It was a close call.

Honorable Mentions

Apple continued its golden run with the iPod/iTunes combo, racking up monster sales and bullying major record labels. And of course who can forget the launch of the iPhone, certainly the year's biggest product launch and a catalyst for a lot of new Mobile Web development activity. Yes, it was a great year for Apple and they are arguably the most innovative Web bigco around currently (even though Web is not their main focus as a company).

Pic: Shht!

Amazon also continued to innovate. At the end of last year it rolled out its WebOS stack, including EC2 and S3. It continued to build out that system in '07 and its recommendation engine impressed too. Then late in the year Amazon announced an e-book reader called Kindle, which may shake up this long sought after market.

Adobe was another bigco to have a good year - its RIA (Rich Internet Apps) strategy began to pay dividends with the launch of Apollo in March (later re-named AIR). Standing for 'Adobe Integrated Runtime', AIR is a cross-operating runtime developed by Adobe that allows developers to create Rich Internet Applications for the desktop. 2007 was a year when desktop apps made a bit of a comeback, with the combo of Web access and slick UIs proving popular. For example Adobe Media Player, released in April, is a desktop app that enables consumers to view high quality video whether they are online or offline.

Mozilla, although not strictly speaking a bigco (it's an organization), had a good year in 2007 too. Firefox continued to make ground on IE in the latest browser wars - they also seem to be pushing innovation in browsers forward, with microformats and offline functionality amongst other things. More areas where Mozilla impressed this year: Prism, an application that takes web apps to the desktop; new commitment to Mobile Web; Add-ons; and a new organization to develop Internet mail and communications software (under the Thunderbird umbrella).

Also Rans

Yahoo, Microsoft, eBay, AOL all were either flat or downright disappointing this year. At least in terms of Web products.

90's Internet star Yahoo had a year to forget - it got caught up in sticky peanut butter, missed out on buying Facebook, saw its stock price fall, and dismissed its CEO. It's not all bad news for Yahoo, because its user base is still huge and there is a lot of brainpower in the company. Plus new CEO Jerry Yang has re-focused the company since taking the reins in June. We hope to see more of the same spark in 2008 that made Yahoo our top bigco in 2005.

"Um Tom, unfortunately I'm going to have to fire your ass..." (pic by Maximum Mitch)

For Microsoft, it has been 'steady as she goes' in Redmond - with the next generation of Windows Live launched, interesting new products like Surface, and other efforts to compete with Google and Adobe (Silverlight) in motion. Mostly promising initiatives, especially Silverlight. However, we were disappointed to see the Windows Live brand continue to flounder this year and there was no innovation on the Web Office front. In 2008 we're hoping to see more product evidence of the undoubted ability of Ray Ozzie and co to innovate on the Web.

Regarding AOL, it has made some great moves in open platform and personalization. But it hasn't really caught the imagination of the public, yet. I'm looking forward to what they do in 2008 though. eBay hasn't done much this year, apart from making a hash of its multi-billion dollar Skype acquisition.

Conclusion

We here at Read/WriteWeb have been analyzing the above companies all year, and we're confident that our selection of Facebook as Best BigCo is something many will agree with. However we're also aware that Facebook has been accused in some quarters of getting too much attention and hype. So we await with interest your comments! Let us know below whether you agree with our choice of Facebook, or not.

Also, we'd like your suggestions for Best LittleCo of 2007. We already have a winner in mind, but it's not too late to influence the judges' decision! We also want to ensure we've considered all possibilities, so tell us which LittleCo you think is deserving of the title.

Over the next few weeks we'll be reviewing a number of Web product categories on Read/WriteWeb, summarizing what's happened in 2007 - and what to look forward to in 2008. We're starting with the Web Office, a market that underwent a lot of changes this year. Our definition of Web Office is: A Web Office suite is a combination of productivity, publishing and collaboration features. A Web Office both embraces the functionality of desktop office suites (e.g. Microsoft Office) and extends it by using Web Native features.

Probably the biggest change was that Google Apps ramped up this year, starting with the release of Google Apps Premier in February. And 2007 continued the trend of acquisitions in this market, which started in 2006 with the likes of Writely and JotSpot. In 2007 Yahoo acquired Zimbra and Google acquired a number of small startups - including GrandCentral (online telephony service) and Zenter (presentations software).

The biggest disappointment of the year in Web Office? The lack of a compelling web-based offering from Microsoft. Perhaps not surprising, given Microsoft's stranglehold on the desktop with Microsoft Office. But disappointing nonetheless.

So let's explore Web Office in 2007 in depth....

Google Apps - the Leading Web Office Suite

2007 was a very busy year for Google in Web Office. They made a number of important acquisitions, and just as importantly developed their product range and continued integration of those into Google Apps.

In February, Google released a premier edition of its Google Apps package (previously known as Google Apps For Your Domain). They also unified the product range more, including a re-designed online control panel.

Other changes during the year to Google Apps: in June 2007, email migration from IMAP email services was added. In July, Google acquired GrandCentral and then a week later it announced its acquisition of Postini - a company that offers "on-demand communications security and compliance solutions serving more than 35,000 businesses and 10 million users worldwide." Later the Postini services were integrated into Google Apps Premier Edition. In September, Google released Presently, its powerpoint competitor. In October, Google announced that e-mail storage for domains using Google Apps would be increasing - Premier accounts were raised from 10GB to 25GB each, while the Standard and Education Edition accounts were set to mirror the Gmail counter (previously 2GB, 3.77GB as of October 19, 2007).

In September, Google announced its first major partnership for Apps, with major IT consultancy and outsourcing specialist CapGemini. The agreement was for CapGemini to sell Google Apps to enterprises. CapGemini, which is also a partner of Microsoft and IBM, will keep the $50 per user fee that Google charges for Google Apps Premier Edition -- they will also make money off services. Google positioned this news as Google Apps being a complement to Microsoft Office. Even so, the news elicited an interesting response from Microsoft, which issued a 10-point list of reasons enterprises should not adopt Google Apps. It was noticeable however that the list didn't mention the word "collaboration", which is probably the key benefit of Google Apps compared to MS Office. Microsoft wasn't the only one though, Zimbra took a shot at Google Apps too (pre acquisition by Yahoo!).

Perhaps the biggest piece of the Web Office puzzle still missing from Google circa 2007 is what they're doing with JotSpot, the wiki/spreadsheet product it acquired in October 2006. There were rumors in September this year and again in December of an upcoming wiki / intranet product from Google (Google Sites?), based on JotSpot. But no official word yet.

Also noteworthy, Sun's StarOffice suite of productivity tools was added to the free Google Pack offering in August.

What's Microsoft Doing in Web Office?

Not a lot, at least not publicly. Microsoft seemed mostly content to sit on its huge lead in the desktop office software, in 2007, offering little in the way of browser-based Web Office functionality. Its Office Live product is a cobbled together service of hosting plus basic products like email and webpage creation. But to be fair, that's all Microsoft really needs to do at this point. As Emre Sokullu nicely put in a November post surveying the Web Office landscape, "Microsoft's vision [for Web Office] is evolutionary, rather than revolutionary."

However there were signs of life in October, when Microsoft announced a new online office service called Office Live Workspace, plus re-named its Office Live service to Office Live Small Business. Both moves were attempts to complement Microsoft Office, its dominant desktop office suite - rather than replace functionality present in MS Office. Also in October, Microsoft announced partnerships with Atlassian and Newsgator, two leading Web Office vendors, in a bid to make its Sharepoint product more 'web 2.0'.

In August, it was reported that Microsoft will offer a free, ad supported version of Microsoft Works, its 'lite' office suite. It will be a desktop app and it will be distributed via pre-installing it on PCs - a tried and true Microsoft business model. Adverts will run within the programs, including the flagship word processing and spreadsheet apps.

September: Zimbra Acquired by Yahoo

A somewhat surprising acquisition in Web Office this year was Yahoo's purchase of open source Web Office vendor Zimbra for $350 million, in September. Zimbra was an early force in bringing AJAX to the enterprise and adoped an RIA model in March, including both online and offline modes. So why did Yahoo!, a consumer focused company, but an office software company?

In a follow-up analysis post, we attempted to answer that question. We wrote that Yahoo is aiming to create a more open platform, using APIs and mashups across multiple Yahoo properties (e.g. Yahoo Maps). Yahoo executive Brad Garlinghouse wrote in a post at the time that he sees "great opportunities to incorporate some of their [Zimbra's] best-of-breed features (I really like their calendaring) into Yahoo!’s industry-leading communications products." We concluded that Yahoo will probably never be a full enterprise software company, as Google wants to be, but there is a lot of potential revenue in an email/calendar suite for small businesses and consumers in general.

See also our interview with Zimbra co-founder and CEO Satish Dharmaraj in October - available as a 30 minute podcast available on Read/WriteTalk (transcript included). It explores Zimbra's journey from October 2005 Web 2.0 Conference launch to September 2007 acquisition by Yahoo!.

Zoho & ThinkFree Steadily Expand

Probably the two leading independent Web Office suite vendors are Zoho and ThinkFree - and both continued to expand their product range this year.

Zoho is arguably the most complete and full-featured Web Office suite on the market. In June Zoho told us that the Zoho Office Suite has "about 50% more apps" than Google Apps. Throughout the year the company announced a steady stream of new products and upgrades. Highlights included Zoho Notebook in May, offline functionality for Zoho Writer (using Google Gears) in August, a launch pad for Zoho's suite of office applications called Zoho Start in late August, and the launch of an online database in November. Also for the first time Zoho released an official suite, similar to Google Apps, called Zoho Business. This suite could hold the key for Zoho going forward, as it continues to integrate its many products and features into a compelling whole.

ThinkFree has also been growing steadily and adding new products/features. ThinkFree markets its office suite as the one with best Microsoft Office compatibility. It is also mainly a Java-based solution, rather than Ajax which Zoho and Google predominantly use. ThinkFree Online includes three applications – ThinkFree Write for word processing, ThinkFree Calc for spreadsheet management and ThinkFree Show for creating presentations.

In February ThinkFree announced they'd reached 250,000 registered users. These users are made up of small and medium business owners and their staffs, university professors, teachers, entrepreneurs, parents, bloggers and students. ThinkFree users come from more than 200 countries, but the greatest number of users come from five regions: the United States, South Korea, Brazil, the United Kingdom and Canada. In August ThinkFree announced it had hit the 1 Million mark in number of hosted documents and was up to 335,000 users. At the same point in time, Zoho had 310,000 users (but claimed a faster growth rate).

Other Big Players: Salesforce, Adobe, Facebook

Salesforce.com was busy as ever - e.g. a new product called Salesforce ContentExchange, a content management product for unstructured data such as email and html.

In late Spetember Adobe acquired Waltham, Mass.-based Virtual Ubiquity for an undisclosed sum, and in doing so officially entered the web office fray. Virtual Ubiquity were the creators of Buzzword, an online, collaborative word processing application powered by Adobe's Flex framework. It runs cross-browser in the Flash player.

Could Facebook be a platform for office apps? We listed our Top 10 Facebook Apps: Work in July, but at that time there was no way to create a cohesive groupware environment in Facebook. The best we could come up with was to use a private group to keep everyone in the loop, use 30 Boxes's Calendar app to share important dates, and Zoho's Online Office app to share documents. Hardly a Basecamp killer. However in November a new application was launched from DivShare, called Projects. Basecamp it is not, but there is hope yet for Facebook and office apps.

We shouldn't also forget other big enterprise players, like IBM, Oracle, SAP and BEA. These bigcos continue to scrap it out in the large scale enterprise space - and web 2.0 features and philosophies became increasingly prominent in their product offerings in 2007. Incidentally I just love the photo to the right, by Scott Beale of Laughing Squid, of IBM staff in red shirts at this year's Web 2.0 Expo!

Other Web Office Contenders

There are a lot of innovative and new types of Web Office products being built currently. Here are a couple we covered this year...

Clever Tools is a new online project management and extranet application suite that is aiming for a Q1 2008 launch (and a beta of at least a few of the apps in the suite in October of this year). The full Clever Tools suite will include a project management application (that includes message boards, task management, and file sharing), an invoicing app, timesheets, a CRM application, bug tracking, and a whiteboard.

Egnyte is a collaborative document sharing app that is like a mix between an online storage solution (such as Omnidrive or ElephantDrive) and a content management solution. In enterprise speak, essentially it's a knowledge management application. The company started in January 2006 and launched the Egnyte private beta in May/June '06. It launched its public beta around the time of Web 2.0 Expo, in April 2007.

There are many more apps we could mention, but way too many to cover in one post! Some other Web Office products we profiled this year: EditGrid, CentralDesktop, WebEx, ContactOffice, ShareOffice, Peepel, LiveDocuments.

Roll Yer Own Suite

As indicated above, there are multiple specialist apps that can be used instead of a suite like Google Apps. Josh Catone listed 10 Must Have Online Office Apps in late August, during Read/WriteWeb's Web Office Week. It was a kind of sequel to his Rolling Your Own Online Office post from June.

Check out Josh's choices for the best of breed online word processor, spreadsheet, presentation tool, calendar, email app, groupware, file storage, RSS reader, contact manager, and to do list.

Mobile Office

Devices like Blackberry have been used by IT departments in their office software for a while. But with the launch of the iPhone in June, it was almost inevitable that some Web Office vendors would create apps for iPhone.

For example CRM provider Etelos - which had already embraced other popular Web platforms like Google Apps, Netvibes, Pageflakes and Windows Live - announced a suite of modularized CRM tools for use on the iPhone. It already worked on the Blackberry, but Etelos' Eric Berto said at the time that "the browser for the iPhone is much better than the BlackBerry".

A Dark Horse: Meebo

As Emre Sokullu noted in November, meebo is one of the most successful online instant messaging clients, but with their announcement of a platform there now exists the potential for a lot of development to occur around their user base. By allowing third-parties to tap into meebo's communication platform and users, the company's new development platform could actually be used to create intriguing web office applications. Below is a mockup of what a meebo platform app might look like:

The picture above imagines Google Presentations embedded into meebo.

Conclusion

So 2007 has been a very busy year in Web Office. Due mostly to its bulk and money, Google has stole a march on all the small startups that first got into the space back in 2004-5. In a June poll, we asked which online collaboration platform do you use? With over 1,500 respondents, Google Apps was way out in front -- 47% of respondents use it. Basecamp was next with 18%, with Zoho on 10% and ThinkFree 8%. The two Microsoft options, Office Groove and Office Live, got only 2% each.

In 2008 we expect to see Google Apps mature into a more complete and functional suite, something that can take on Microsoft Office. Right now it isn't quite ready for the enterprise, due to issues like functionality, security and compliance - all of which Microsoft Office is better in.

Also expect to see more acquisitions in 2008, as the smaller players jostle to either get their share of the office software pie - or perhaps win a golden ticket and get acquired by Google or another bigco. Partnerships are also key with the smaller players, because of corporate IT's preference for big vendors.

The big question though is how Microsoft will counter the growinng threat of browser-based office software. They stayed relativfely quiet on this front in 2007, so maybe 2008 will be when they rise up to the challenge of Google Apps.