Against this background Europe’s publishers are debating in London. And it’s an interesting debate; on the one hand they share their own common strands of being powerful brands, enjoying vast heritages, owning rich content. Yet they also share many other common strands that go against the very grain of Web 2.0: inflexible corporate structures, inflexible financing, no experience in application development, discomfort with decentralized or democratized content development.

Martin Nisenholtz, SVP at The New York Times Company, kicks off the panel of Web 2.0 evangelists, explaining that the challenge of how to organize your teams is key. “Platforms both enable and scale. They enable something significant and they scale as the audience swells. They have characteristics that allow for rapid growth”.

At a time when four major portals are taking 88% of online revenues in the US, there is no debate about the success of platforms. But Neil Rimer, General Partner of Index Ventures, is conscious that the hunger for new platforms is creating a rich environment for new businesses to develop. “We’re looking for early stage businesses that can transform the economy. And that can do this with no dependents”, he says, citing Skype as a good example. “They were leveraging peer to peer architecture to offer a very compelling value proposition to users”. For Rimer, the key challenge is often ‘how large can this business be’.

Yahoo has been acquiring Web 2.0 companies, allowing it to fast-track innovation. Simon Levene is responsible for the strategy for international acquisitions and sees Yahoo firmly as a ‘platform’ business: “The question is to whether build or buy. “In the last 12-18 months we’ve put a lot of emphasis on user-generated content. Buying small start ups like Flickr and Delicious reflects the importance of giving users the power to generate their own content, which creates a scaleable solution”

But not every media group has the same deep pockets. Many need to organically innovate to get the take-up they need. Dr Marcel Reichart, Managing Director of Hubert Burda Media is clear that taking editorial content online should be only the start: “We need to go beyond print, but as an industry what we lack so far is the technology capacity. We should all think about how we build up web platforms and online communities. One thing is clear: we can’t copy our content model and move it to the web. So how we leverage our print brand into online is still a real challenge”

Why do almost all the scaled platforms emerge from outside media companies? Rimer is clear that “it’s easier for us to take three people and build a business around it than to take a large media company and grow it. I can’t explain why”.

Levene sees the key difference as being the scale of the vision: “When a company like Yahoo or a start up approaches a problem, they invest in a technology or team that is approaching this not from a national perspective, but from a much larger perspective. At Yahoo we have to look at ‘build’, ‘buy’ or partner approaches. We know that we can’t always do everything ourselves”. His view is that “if someone gets out there quickly and has momentum”, then it’s often smarter to acquire. “Our pitch to that entrepreneurial team is that we offer a much larger canvass on which you can do this. It may take us 6-12 months to catch up if we do it ourselves, and even then we can’t guarantee that we’ll do it at the same level”.

Acquisition doesn’t guarantee success, but Levene has some tips: “When we make these acquisitions we keep them outside the main structure and allow them to run autonomously. We have an explicit and upfront conversation about how long the team will stay, and in several cases we manage to keep them longer than they were contracted to because they want to stay. A lot of the value for us is in the team itself. We recognize that there are a lot of things we’re not going to do ourselves and that’s why we are interested in partnerships with traditional media”. Levene is clear that the relationship between what is inside the business and what is in the hands of the users is now very different, and that the philosophy of Yahoo is not to have a walled garden.

For the developers coming together to create new Web 2.0 businesses, the longterm roadmap looks different. Thinking about the exit strategies for these young digital firms, media companies are clearly now viable exit partners. The era of IPO has been replaced by what Rimer describes as simply “building sustainable businesses”, and he’s conscious that the venture community “is being pre-empted” by the offers from media groups, both traditional and digital. “Buying a business and integrating it can be a more viable route.”

While the behaviour of the media industry represents myriad ways of approaching the problem, everyone we spoke to shared one common stumbling block - the challenge of access to talent and the challenge of keeping good people.

Digital has developed a Web 2.0 workshop for publishers which is available as an in-company briefing for senior executives refining their web strategies.