• CNET, Thursday, December 13, 2007 10:45 AM

The Web 2.0 movement is in its third season, and while business models are still "fuzzy," tech startups and software developers continue to receive the backing of VC and private-equity firms. Online video might have been the story of 2006, but social networking recaptured center stage in 2007, thanks mostly to Facebook's landmark innovation to open its software development kit to outside developers. Since then, just about every one of its competitors has followed-suit.

Yahoo's acquisition of "Ajax-heavy" Zimbra, an email provider, and Adobe's announcement of Photoshop Express were clear signs that 2007 would be the year of Web-based applications. Microsoft, meanwhile, took measured steps toward offering its desktop software services on the Web, introducing Office Live Workspace, which lets people share Office docs online. Google also supplied an enterprise level version of Google Apps.

But Facebook's open platform announcement was the story of the year. Providing application programming interfaces for Web-based software is nothing new, but giving software developers access to the social network's rich user data was unprecedented. Later, MySpace, Bebo and LinkedIn released "open" platforms of their own, but Google took it a step further by opening a set of APIs that would let applications run on many social networks, instead of one.

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