Point 3 of Tim O'Reilly's What is Web 2.0 article says that "Data is the New Intel Inside".  His point is that data and innovative uses of data power web applications.  Amazon is powered by the ISBN book database plus Amazons added inventory ID's plus user reviews, comments, buying patterns and other data.  Google is powered by its database indexing and analyzing web content.  Google Maps is powered by the map database that NAVTEQ geographical database.  And it goes on and on with all the distinctive web applications.

The power from data on the web so far has come from a very simple level of analysis of that data and from a very small subset of the data that could be made readily available.  The simple level of analysis in Google is searching the data and finding simple content relationships for advertising.  Amazon is based on cataloging.  Analysis tasks such as forcasting, analyzing relationships of even medium complexity, and interpolating from known data to find unknown values are primarily for the future (probably the very near future) of the web. 

The data used used heavily by web applications is either generated from the web application itself or comes from a few datasets.  A wealth of government data and data generated by private agencies is not yet widely used.  Census data, government statistics on economic measurements by region, public registrations of companys (EDGAR) and more private data sets will be used and used with more analytical power in the future.

One application that shows the transforming power of analysis with public data is Zillow.com.  Zillow can value just about any home in the country from publically available sales data on comparables and the data that is publically available on the home being valued.   Zillow gives you much of what a home estimator does for free and instantly (it doesn't make any effort to evaluate the condition of the house, only what is in the public record). Zillow is an example of analysis applied to available data creating value.  It shows a direction in web development.

Yahoo is working to increase their research capabilities in analysis.  The Wall Street Journal reports that Yahoo is Stocking Up on Academics.  Because of my background in economics I was particularly interested that they are hiring star economists.  Yahoo wants to use behavioral insights and analytical tools from economics to make better use of their data on web users behavior. 

Rounding back to Tim O'Reilly's article, he says, "The architecture of the internet, and the World Wide Web, as well as of open source software projects like Linux, Apache, and Perl, is such that users pursuing their own "selfish" interests build collective value as an automatic byproduct."  Tim O'Reilly resisted saying "as if by an invisible hand" but its clear Yahoo is doing the right thing hiring economists.

 

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