Geoffrey Handley

Geoffrey Handley

You know a revolution is under way when Time magazine votes you and me, all of us, its person of the year and puts a computer screen on its cover rather than some charismatic world leader.

That revolution is the second coming of the internet, Web 2.0, a move away from simply taking traditional businesses online to empowering web users to make their own content and share it.

Web 2.0 services exploded in 2006, on a scale of dotcom boom proportions. But there seems to be an unwavering confidence in the internet industry that this is no flash in the pan. The ideas and technology are better than last time and consumers have responded like never before.

Brands such as Flickr, Blogger, Del.icio.us, YouTube and Wikipedia have come to epitomise this new way of thinking.

New Zealand internet companies are scrambling to join the Web 2.0 party. But observers say they'll have to change their thinking to make their mark worldwide.

"There's a mindset holding New Zealand back," says Stefan Korn, of Wellington consultancy Igniter, which advises businesses on their web strategies.

"There's a lot of focus on entrepreneurs here. The one thing missing is for those people to take the leap and sell their products and services overseas. That's where people fall over."

Korn, who has been in New Zealand for two years, struggles to name any Kiwi technology companies that could make a big impact on the web abroad.

And that $700 million sale of auction website Trade Me to newspaper publisher Fairfax was both a "blessing and a curse" for the local internet industry, he says.

"Great sale, but people have to move past Trade Me and look at what they can do themselves. What people can do in this space is almost endless and the beauty of the internet is that development can take place anywhere. I see it as liberation,a way for people to forget about geography."

Wellington technology entrepreneur Rod Drury explained recently on his weblog why it was unlikely a YouTube-type web service could emerge from New Zealand.

"Because of our lack of broadband we are unlikely to see the innovation that comes when you are used to having big pipes.

"More likely from New Zealand in the consumer space we'll see innovation around trickling and caching video content because our puny bandwidth encourages being clever over small pipes."

The one exception, according to Drury, is Christchurch search engine provider Eurekster, which has a huge addressable market.