The Internet is a limitless boundary of free exchange of digital information and profit.

That’s why it rose quickly in the mid and late 1990s. People believed the Internet would create the next industrial revolution and make mincemeat of the traditional industries. Mincemeat it did make-Of itself.

The Internet dream fell like dominoes in the fall of 2001. Its fall was as dramatic as its rise world over. The burst of the dotcom bubble was a turning point for the web. People in the industry concluded that the web was over hyped, when in fact bubbles and shakeouts are a part and parcel of all technological and industrial revolutions. Shakeouts typically mark the point at which a fledgling technology is ready to take its place center stage. The real success stories show their strength, and there begins an understanding of where the industry has gone.

This lead to the inauguration of Web 2.0, the arrival of the Internet with vigor and more inherent strengths. Today the Venture Capitalists are as interested in this space as they were during the initial days of the Internet. Such has been the power of Web 2.0 that a search on Google throws up 7.86 million citations. Dale Dougherty, a web pioneer noted that far from having ‘crashed,’ “the web is more important than ever, with new and exciting applications and sites popping up with surprising regularity.”

Such exclusiveness from the entrepreneurs has led to renewed VC interest in the web arena. In 2005, VCs in the U.S. invested $376.78 million in web 2.0 companies. Though this was much lesser compared to the VC investment during the pre-dot com boom, it is better than the previous years. “There has been tremendous excitement in the VC community for the Web 2.0 space but as in the first generation, only a few companies will be wildly successful,” says Vivek Mehra, partner August Capital. Jeff Clavier of Softtech Venture Capital says VCs are too excited with the re-emergence of the web.