I just read a great essay by Paul Graham on the definition of "Web 2.0".
“Experts have given Wikipedia middling reviews, but they miss the critical point: it’s good enough. And it’s free, which means people actually read it. On the web, articles you have to pay for might as well not exist. Even if you were willing to pay to read them yourself, you can’t link to them. They’re not part of the conversation.”
With this and other comments, Graham really sums up nicely the fundamental reason why many organizations don’t “get” the web. They think of it as simply a new distribution channel for their existing products (magazines, tv shows, encyclopedias, etc.). They think they get it, because they recognize the increased power of this new channel, but they don’t understand that entirely new forms of existing products and new products that never existed before are now possible, and that their non-web products can’t compete.