The internet evolves

Google Reader was revealed during the Web 2.0 conference, and I suppose I should say something about that hot little catchphrase while it is still trendy.

From Tim O'Reilly: What is Web 2.0
(Yes, that O'Reilly. This article is highly recommended if you want to know what to expect from the internet in the next decade.)

Google, by contrast, began its life as a native web application, never sold or packaged, but delivered as a service, with customers paying, directly or indirectly, for the use of that service. None of the trappings of the old software industry are present. No scheduled software releases, just continuous improvement. No licensing or sale, just usage. No porting to different platforms so that customers can run the software on their own equipment, just a massively scalable collection of commodity PCs running open source operating systems plus homegrown applications and utilities that no one outside the company ever gets to see.
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Google's service is not a server--though it is delivered by a massive collection of internet servers--nor a browser--though it is experienced by the user within the browser. Nor does its flagship search service even host the content that it enables users to find. Much like a phone call, which happens not just on the phones at either end of the call, but on the network in between, Google happens in the space between browser and search engine and destination content server, as an enabler or middleman between the user and his or her online experience.

BitTorrent thus demonstrates a key Web 2.0 principle: the service automatically gets better the more people use it. While Akamai must add servers to improve service, every BitTorrent consumer brings his own resources to the party. There's an implicit "architecture of participation", a built-in ethic of cooperation, in which the service acts primarily as an intelligent broker, connecting the edges to each other and harnessing the power of the users themselves.

If an essential part of Web 2.0 is harnessing collective intelligence, turning the web into a kind of global brain, the blogosphere is the equivalent of constant mental chatter in the forebrain, the voice we hear in all of our heads. It may not reflect the deep structure of the brain, which is often unconscious, but is instead the equivalent of conscious thought. And as a reflection of conscious thought and attention, the blogosphere has begun to have a powerful effect.

Discussion:

1) Is this a legitimate paradigm shift? Or is it just the next stage of maturation of the internet?

2) For that matter, should this primarily be seen as a reconceptualization of the internet by corporations, or a developmental stage of the internet in its own right?

3) Is Web 2.0 primarily a change in the structure of applications and services on the internet? Or is it better seen as a shift in the way the internet is used? Consider: Google does not need to target a passive audience, but active users of its service.