You've heard the magic "Web 2.0" buzzword thrown around like it's the second coming of pre-sliced bagels. But while scrollable maps, real-time stock quotes, and live article recommendations are nice and all, the whole Ajax/Flex platform hasn't changed our online lives very much.

That may be about to change, in a very real way. Computer graphics and electronic document specialist Adobe Systems (Nasdaq: ADBE) is thinking about releasing a free, ad-supported, and fully 2.0-ified version of its industry-leading Photoshop suite. It would be an entry-level variant, designed for simple, everyday image editing tasks that are beyond the capabilities of other free tools available today, but don't inspire the average user to shell out between $80 and $600 for the real thing. It's not hard to imagine a healthy market for that sort of product.

Adobe already has a stripped-down video editing tool in the same vein in the works, waiting to roll out early this month. CEO Bruce Chizen says that the two applications face very different programming challenges, so the still-image tool might take a while to come to fruition. And when it does, Chizen expects Google (Nasdaq: GOOG) to be hard at work on a similar program of its own.

It's interesting that he didn't mention other logical rivals, such as Microsoft (Nasdaq: MSFT), Yahoo! (Nasdaq: YHOO), or Apple (Nasdaq: AAPL). All of those companies have some photo-sharing services today, and some of them are already dipping a toe into the image editing pool. But Chizen thinks that Google's Web development talent makes it the competitor to watch here.

Be that as it may, Adobe has an intrinsic advantage here, in that it controls the development of former Macromedia flagship product Flash after acquiring that company a couple of years ago. Flash is the "FL" part of Flex, which has become a leading platform for complex online tools like video sharing, interactive charts, and other graphically intense tasks. Google, Microsoft, and Yahoo! all use it for some or all of these things today.

It's a case study in the symbiotic benefits of online competition, I think. Adobe has long been content to sell shrink-wrapped software meant for local installation, and it has done very well at that. Companies like Google have shown that advertising can generate profits, too, sometimes using the very tools Adobe developed (or acquired). So now the tide is flowing the other way, and the graphics master wants to show the kids how it's done.

Go for it, guys. As a consumer, I love competition. As a shareholder, it can be a scary thing, but it's a healthy process that weeds out the weaklings and leaves the real innovators stronger than they would otherwise have been. And I think both Google and Adobe are strong enough to remain standing when this round is over and Web 3.0 starts to shape up.

By Anders Bylund
March 2, 2007
Motley Fool