"None of this makes the Internet any less revolutionary. But it’s created a cultural revolution more than an economic one. Twitter is not the Ford Motor Company; Google is not General Electric. And except when he sells our eyeballs to advertisers for a pittance, we won’t all be working for Mark Zuckerberg someday."
Part of what Douthat, Taylor Cowen, Matt Yeglesias and gang are saying is true. There is enormous component of Internet Economy, so called Web 2.0, which is much less about 'value' addition in human life materially than running after quarter Trillion Dollars Advertising market. That market can only increase in proportion to 'real / total' economy; not any faster.
Not for a reason why so many in Silicon Valley have then disdain for Facebook and many other such Web 2.0 companies. Cisco, Juniper make routers and switches and all the infrastructure on which this Internet runs (apart from host of chip companies which essentially power these equipments). Of course they have to solve real problems of 'physics' and they cannot be content on providing a simple 'timeline or friending button' on the Website. Make no mistake, no-one is down playing the algorithmic complexity of problems like Facebook or Netflix type of companies are solving. And for sure that component of these companies is real value addition to human endeavor.
Point is there are real companies in Silicon Valley which make all this Internet and Cloud make happen on your computer screens. My favorite example is VMware, essentially a division of EMC. How many of these critics like Douthat know of companies like VMware? How much of homework these folks have done to understand the 'real value addition' by such companies and what those companies do? What about the path breaking work Google is doing for 'automated driving car' and all the value it brings along with ubiquitous Web 2.0? How much of all these 'out side tech' folks know or have taken labor to understand? Even company like Yahoo - what do people know about the value of 'Hadoop' which it has given to Tech world? Same goes for many things like 'Trift Technique' and so on which were developed at Facebook.
I believe there is bit of superficiality to analysis and criticism by these folks. I wish these folks are more informative and careful in their dismissal of Web 2.0 as well as lot more appreciative about many companies which are doing rock solid work to advance our state of technological competence. Deriding Facebook as Web 2.0 company is very easy; but do not ignore so much of breathtaking work which happens behind the screen; all in the service of truly advancing human race.