Let me preface this post by saying I dislike the versioning of the web, especially the “Web2.0” term, however I do feel the web has gone through evolutionary stages. Also for all intents and purposes, this historical analysis starts in 1995.  This post is inspired by a chat that Alex and I had last fall, and which was brought back up a few days ago

So where did it all start?
The first iteration of the web was all about the connecting of documents to each other. This was the basis of the hyperlink. Hyperlinks were designed to interlink files and documents by specifying their locations.  Think Yahoo directories, and Netscape 1.0.

So now we’re building things
The second iteration or evolution of the web was all about building tools for people to create these documents. One could argue that started with geocities, tripod, angelfire, and all the other personal homepage tools of the mid nineties.  This is the user generated phase of the web. This is what I think of when I think of “Web2.0.”

But how do we socialize?
The third generation/iteration/evolution was less about creating content, but more about linking the content creators together (previous generations tools were by now commoditized to the point they were functions, not the focus). So this was the social network phase if you like.  Users were now being connected directly to each other, and the finding/discovery of new content was shifted from a machine controlled aspect to a social function.

They’re my friends, not yours
The fourth stage is where we see the tools to let us create our own links between people and take these links wherever we choose.  This is the advent of portable social networks and personal social networks.  Of all the “graphs” we have interconnecting us today, email is quite possibly the easiest system of connections we have to port.  This is a big huge play on the parts of Microsoft, Google, and Yahoo, the three kings of email.

So what does this all mean?
Well in a nutshell, it means that we’ll be seeing a number of players adopt or propose their own standards for data portability. Either true data portability, email portability, ID portability, or something else will get a likely boost in the near future.  The prize it seems is in controlling the creation of these networks and tracking them all (think observing how swarms of insects or schools of fish behave).

I waited a week before writing this, why? Well I was busy, and I wanted things to settle a  bit before I kicked up the dust again. But the AOL buy of Bebo is a much bigger deal than we are all realizing or giving AOL credit for. So the $850 Million might seem like an obscene price to some (lest we forget some other large purchases of the last few years make this pale in comparison), and to others it is simply confusing. How could AOL plunk down the equivalent of $20/user on what is ultimately a 3rd place network in the US?

Why the numbers make sense.
AOL’s mostly cash deal gives them an instant boost on the social network scene where their AIM pages project died after not receiving much if any fanfare (AOL seemingly didn’t bother informing their AIM users about it).  It gives AOL a big foothold overseas, where it is still weak compared to its competitors. It also gives it a big chance to cross promote its newly acquired service via AIM, AOL.com, netscape.com and the hundreds of other content properties they own.  For AOL it might be a challenge to recoup the initial investment fast, but they have a much better ability to monetize those page views than most of the players.

Remember AOL owns advertising.com and its whole PlatformA initiative encompasses many advanced ad targeting services that were just waiting for access to billions more in page views to data mine.

What you are all missing.
So AOL now owns 40 million user profiles, now what? Well one thing that people are forgetting is that Bebo has built a fairly robust representation of the social graph on their site. This data which is a goldmine for marketers is probably the second best set of social graph data on the web behind Facebook’s.  So if you think about it, they got a data set about half the size of Facebook’s for about 1/15th the cost.

Stop looking at the battle, and focus on the war.
Folks, the issue isn’t about social networks directly, its about behavioral advertising. Understanding what people want by observing them and then serving both contextual and targeted advertising to them as they search/surf through their properties.  We as a collective whole keep forgetting this about Yahoo (don’t forget they have 400million user profiles, maybe more) being one of the kings at this, but thats another story entirely.  The behavioral battle is being waged on all fronts, but what it ultimately needs is enough  page view inventory to be truly useful to the data crunchers, and thats what a few billion page views a day will give you if you’re AOL/Bebo.

So where do we go from here?
Well I really see AOL trying to promote the heck out of Bebo, and hopefully working on improving their infrastructure substantially. But the first thing we’ll see is Bebo beating the 2008 earnings estimates they had set forth simply by having AOL up their CPM rates from $.50 to $2.  If Time Warner wasn’t such a bad fit with AOL, I would almost recommend buying AOL right now, but then again, maybe AOL + Platform A will be spun off, which would definitely change the game.