Web 2.0 is simply a buzzword for user generated content (Web based communities). It is not AJAX nor is it flashy Web pages that behave like desktop apps.
Although the term is less than three years old and it is sometimes described as social networking, it should be noted that one of the earliest, big, profitable companies on the Web, Ebay, was one of the first Web 2.0 companies - and it dates back to 1995.
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