• by Lynn Russo Whylly , February 22, 2007

As we began pulling out of the recession, experts said we would again start to see "big ideas" from the Internet. But not until the explosion of social networking and UGC models in 2006 did Web 2.0 really begin to take off. That growth is now fueling dozens of new sites and categories.

How are today's startups different? In Web 1.0, "Everyone was focused on putting up stores," says Courtney Buechert, president of boutique agency Eleven. "Today, these sites are more like media - a magazine, newspaper, or TV show where people aggregate to - and I just want to get myself in the middle of that to tell them about me."

A good example, he says, is the online dating arena, which is beginning to offer a more refined user experience. PodDater, for instance, uses iPod technology as a sifting device, recognizing that people who like Apple's version of MP3 players are a particular "type."

It's about data, not advertising, Buechert adds. "If I'm a cruise line or a resort that's advertising in the online dating arena, I'm not trying to help people date, but people who go to Match.com should index very high against people who use my service. So being able to collect that data gives me an opportunity to start a dialogue with them."

"Where I'm seeing the most interesting perspective are these mash-ups - combinations of music and video and photos and content," says Mark D. Kvamme, a partner at Sequoia Capital. "Podshow.com, which we invest in, is a good example. I think they do two things very well: They provide tools for independent content producers to quickly create programming. Then they provide a platform for getting the word out."

Should you advertise with startups? To make that determination, Doug Powell, chief integrator at Maiden Lane, asks these questions: Are they playing in a space that seems to have a lot of traction? Are they really focusing on solving a user challenge or issue? As people use it, does it get better?

"Most of the new Web sites haven't really figured out what their advertising models are," admits Jeff Marshall, senior vice president at Starcom USA. It can often depend, he says, on whether a site was started by entrepreneurs, or by people pursuing their own interests. "Both could end up equally successful, but they'll take different paths to get there."

In the old days, says Marshall, "I might have asked, do you offer a way for me to get my message in front of men 18 to 24? Today, the conversations often hinge on the depth of knowledge you have about your audience and the ability to get more creatively involved with your audience."

Marketers also need to be savvy about sifting through the fluff. "There are a lot of 'me too' sites now," says Brian Haven, senior analyst at Forrester Research. "Those that come in and redefine what we're talking about will survive. Those that simply reiterate what we're talking about will not. It's got to be a 'wow.' "