Web 2.0 technology encourages lightweight business models enabled by syndication of content and of service and by ease of picking-up by early adopters.

O'Reilly provided examples of companies or products that embody these principles in his description of his four levels in the hierarchy of Web 2.0 sites:

* Level-3 applications, the most "Web 2.0"-oriented, exist only on the Internet, deriving their effectiveness from the inter-human connections and from the network effects that Web 2.0 makes possible, and growing in effectiveness in proportion as people make more use of them. O'Reilly gave eBay, Craigslist, Wikipedia, del.icio.us, Skype, dodgeball, and AdSense as examples.
* Level-2 applications can operate offline but gain advantages from going online. O'Reilly cited Flickr, which benefits from its shared photo-database and from its community-generated tag database.
* Level-1 applications operate offline but gain features online. O'Reilly pointed to Writely (now Googe Docs & Spreadsheets) and iTunes (because of its music-store portion).
* Level-0 applications work as well offline as online. O'Reilly gave the examples of MapQuest, Yahoo! Local, and Google Maps (mapping-applications using contributions from users to advantage could rank as "level 2").

Non-web applications like email, instant-messaging clients, and the telephone fall outside the above hierarchy.

In alluding to the version-numbers that commonly designate software upgrades, the phrase "Web 2.0" hints at an improved form of the World Wide Web. Technologies such as weblogs (blogs), wikis, podcasts, RSS feeds (and other forms of many-to-many publishing), social software, and web application programming interfaces (APIs) provide enhancements over read-only websites. Stephen Fry, who writes a column about technology in the British Guardian newspaper, describes Web 1.0 as:
“ …an idea in people's heads rather than a reality. It’s actually an idea that the reciprocity between the user and the provider is what's emphasised. In other words, genuine interactivity, if you like, simply because people can upload as well as download. ”

The idea of "Web 2.0" can also relate to a transition of some websites from isolated information silos to interlinked computing platforms that function like locally-available software in the perception of the user. Web 2.0 also includes a social element where users generate and distribute content, often with freedom to share and re-use. This can result in a rise in the economic value of the web to businesses, as users can perform more activities online.

her have provided additional definitions of Web 2.0:
“ …the philosophy of mutually maximizing collective intelligence and added value for each participant by formalized and dynamic information sharing and creation.[11] ”
“ …all those Internet utilities and services sustained in a data base which can be modified by users whether in its content (adding, changing or deleting- information or associating metadata with the existing information), how play them, in tent and external aspect simultaneously.