I'm feeling very torn about Newsweek's new cover story on Web 2.0 (possibly the worst neologism, most meaningless buzzword ever): on one hand, its good to see some of these concepts getting mainstream exposure - social networking as a form of self-expression, the "wisdom of crowds" (but no mention of its failures), organizationally efficient companies with minimal staffs, maximum content. but I'm still left with the nagging feeling they're leaving too much out, or just missing the point. reading it, all we really learn is that yahoo makes some pretty smart investments (I've been arguing that for longer than I care to remember).
instead, take a look at this article, called academic by some, but actually fairly theory-free and chock-full of practical analysis. the comparison between myspace and friendster provides much greater detail on all of the above ideas, and how encouraging user innovation is ultimately smart business - creating a culture of mutual respect. and an boyd argues, innovation (and the subsequent content, hacks, easter eggs, etc) eventually usurps more traditional notions of "productivity" and technological perfection. an excellent read on the mechanisms needed for social networking to thrive.