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At Web 2.0 Summit, the party's back on

At the annual O'Reilly Media event, tech industry leaders hinted not-so-subtly that they're ready to get back to business instead of contemplate the realities of a bad economy.

Facebook chief operating officer Sheryl Sandberg has something to smile about at the Web 2.0 Summit (onstage with conference organizer John Battelle). James Martin/CNET

SAN FRANCISCO--That was quick.

The hardcore optimism was back, and so were the open-bar parties, at the annual Web 2.0 Summit event this week--where a ticket price of over $4,000 for the three-day O'Reilly Media and TechWeb event hadn't fazed the sold-out crowd. Just about every big player on the Web had a high-profile executive speaking (well, except for Yahoo, because CEO Carol Bartz cancelled her Wednesday keynote, citing the flu), and the mood was clear: Economic recovery is on its way, and we're going to be ready.

Are we really past last year's financial crisis, or are we just sick of hearing about it? Or perhaps, with the Web 2.0 Summit's focus on the biggest of the big, did the industry come across as healthier than it actually is?

Sure, in a talk on Thursday morning, economist Austan Goolsbee cautioned conference attendees that the country is "still in a fairly deep recession." But gone were the do-gooderism and dreamy futurist thinking of last year's Web 2.0 Summit, where speakers like former Vice President Al Gore and cyclist-activist Lance Armstrong addressed an audience shell-shocked both by the economy's downward spiral and the once-unthinkable election of Barack Obama, something that left the liberal-leaning Valley set simultaneously thrilled and overwhelmed. The Web 2.0 Summit this year was not about vague possibilities of the future, or solemn acceptance of difficult times, but about everything good happening right now.

Dramatic unveilings ruled the show. On Wednesday a parade of announcements took over the conference stage--Facebook and Twitter partner with Microsoft's Bing! MySpace launches a music video portal! Google has a social search project!--and on Thursday, Google co-founder Sergey Brin strolled into the conference venue for an unexpected talk. AOL CEO Tim Armstrong seemed to want to hop on the big-surprise bandwagon, too, assuring that the company has been readying "a fairly substantial shift in our technology" but declined to say much more.

It didn't stop there. Morgan Stanley analyst Mary Meeker, a Web 2.0 Summit regular--not to mention someone who took a lot of heat for overhyping tech stocks during the dot-com boom--gave a presentation about the health of the industry where she painted the tech industry as a bright spot in the still-faltering economy and talked up the huge potential for growth in the mobile space. Tom Hale, chief product officer at "Second Life" manufacturer Linden Lab, essentially laughed in the face of critics by pulling out the numbers: the virtual world, which many in the mainstream press have long since written off as a haven for bizarro-world subcultures, expects to chalk up $500 million in user-to-user transactions this year and its membership recently reached 1 billion hours collectively spent "in-world."

"The Linden dollar has been very stable compared to the U.S. dollar, which is very unstable," Hale joked.

The good-times-are-coming-back attitude extended to the after hours, too. A Microsoft party celebrated two of Redmond's latest hatchlings: the Bing search engine and the Windows 7 operating system. A MySpace-hosted concert hailed the social site's music-centric revamp with a performance by Weezer; the downtown Regency Ballroom flooded with young hipsters who quite likely didn't know how to tie their shoes when the band released its debut album in 1994. And an official Web 2.0 after-party on behalf of venture firm Canaan Partners, which has backed the likes of DoubleClick and, appeared to be celebrating the fact that in the tech industry it's OK for adults to throw back glasses of champagne and play with orange Silly Putty and glow sticks. (Both of those, as well as copious amounts of alcohol, were distributed at the soiree.)

But it's not over yet. Two of the big companies with executives in the Summit lineup, MySpace and AOL, have yet to prove that their much-talked-about reinventions will actually be successful. Audience members whispered to one another that Twitter's "fail whale" error message was rearing its head on occasion during the conference, a sign that the mega-hyped poster child of the real-time Web still has a few kinks to iron out.

The Web 2.0 Summit is by nature a tableau of bigwigs: CEOs, politicians, big-think inventor types. And the whiz-bang announcements emerging from it came from the likes of Microsoft, News Corp., and Google--and they were, for the most part, deals rather than legitimate technological innovations. With a few exceptions--red-hot geo start-up Foursquare, well-connected dictionary project Wordnik--there was very little at the Web 2.0 Summit that came from legitimately new companies and ideas. There wasn't much of a presence at the conference, whether in the audience or on stage, for the small- and medium-sized businesses that are responsible for so much of Silicon Valley's spirit, the ones who keep the tech industry a whole lot more interesting than boardroom suits.

It's worth noting that small companies aren't sitting on $22 billion in cash or have Steve Ballmer's phone number on speed-dial. And some of them might have a very different song to sing with regard to the health of the industry. Venture dollars are still closely guarded, and ad-supported business models don't look anywhere near as sunny as they did in 2006.

Where were the start-up guys? Playing poker, apparently. Julie Blaustein

Where were the small players? Probably at their offices conducting business as usual. A handful chose to indulge in a $150-a-head event on Monday night that featured a dinner, networking mixer, and poker tournament at one Valley investment banker's Tudor mansion in nearby Los Altos Hills, organized by the SF New Tech Meetup group. The crowd, a mix of small-time start-up guys, a few perennial scenesters, and a handful of legitimate dot-com era veterans, largely wasn't planning to attend Web 2.0 Summit later in the week. It's not all that relevant to start-ups anymore, some commented over the pre-poker dinner.

Others expressed outright scorn at the idea of ponying up four grand for a conference. "Never underestimate how much money is squandered simply because there was someone borderline sociopathic managing it," remarked one who asked not to be identified.

Vocal opposition to the big-ticket conference circuit isn't anywhere near universal, of course. This year, with the impressive speaker roster and barrage of announcements, it seemed like an especially productive affair, and talk of economic recovery kept things buoyant. But after everything the industry's been through in the past year, sometimes talk can just seem like, well, talk. You fork over a few G's, you watch a bunch of billionaires chatter about innovation, you exchange some business cards or LinkedIn contact requests over lunch, and sometimes you get so caught up in it all that you aren't even really sure what you paid for.

"I'm completely exhausted," said a consultant who'd flown in from the U.K. for the whirlwind event, a few yards away from the open bar at the Web 2.0 Summit closing cocktail reception on Thursday afternoon. Gesturing to the glass of wine in his hand, he added, "I'm just trying to get the last of my money's worth."