The Year Online

The business of social networking, cloud computing, and a flaw in the fabric of the Internet top the most notable stories of 2008.

Socializing Networks
Our collective obsession with social-networking sites continued in 2008, as did their search for a viable business model. (See "Social Networking Is Not a Business.") Although economic conditions have been grim for the industry in the past few months (see "Are Social Networks Sinking?"), enthusiasm for the sites continues to run high. Twitter, a popular but non-money-making poster child for the whole Web 2.0 industry, spawned an ecosystem of competitors, knockoffs, plug-ins, and add-ons (see "A Brief History of Microblogging"), some of which struggled to stay afloat as the site strained under the ever-increasing amount of data produced and requested by its users. (See "Twitter's Growing Pains.") Users themselves struggled to manage information overload from multiple social-networking services, prompting some companies to come up with ways to streamline by sharing data. (See "Who Owns Your Friends?") However, one of the biggest networks, Facebook, took a different approach: it carved out a position apart from its competitors. (See "A New Divide in Social Networks.")

Sharing data: Joseph Smarr, chief platform architect at Plaxo. Credit: Toby Burditt

Into the Cloud
Amid the economic turmoil, some good news was that Web companies became cheaper to start than ever before: they could simply lease access to computer power from a growing list of "cloud computing" providers. (See "Cheap Infrastructure.") On the other hand, since many infrastructure services are offered by large companies such as Amazon and Google, this raised questions about smaller companies' increasing dependence on these giants. (See "Web App Writers: Rejoice, Beware.") Amazon's popular storage service also began functioning as a way to draw companies into relying on more and more of Amazon's offerings. (See "Amazon Aims at Content Delivery.") And a variety of open-source solutions jumped into the mix, hoping to make it easier for companies to understand how these infrastructure services work, while, in some cases, also grabbing a bit of market share for themselves. (See "Reaching for the Clouds" and "Opening Up the Cloud.") Meanwhile, the old guard rushed to catch up. Apple's MobileMe stumbled initially, and few people seem to understand what Microsoft's LiveMesh was supposed to do. (See "Lost in the Clouds.") But Microsoft is pushing hard to realize a plan in which cloud computing augments software rather than replaces it. (See "Craig Mundie's Cloud Vision.")