Here is my three-line summary of what has been happening to the internet. Repeat after me:
The internet is diverging in many new applications. This divergence creates many new products and business opportunities. Many of these new markets leverage the fact that the internet connects millions of people that want to learn, communicate, and have fun.
It really is that simple. Web 2.0, user generated content, the collective intelligence, the long tail, and social networks are just phenomena (and buzzwords) that illustrate this compact summary.
My one-line summary reads:
The internet is becoming less of an information retrieval system and more of an entertainment platform.
The same happened -- or is still happening -- with radio, television and telephony (mobile phones).