Check out Businessweek.com's article "The Next Small Thing" The small thing they refer to is a widget. To the uninitiated, a widget is a small application that you can drop onto your blog or other page to provide some particular functionality. We've all seen the clocks and weather reports. That got old fast. But widgets promise much more.
The ability to create your own 'world' of functions lets you be a programmer and content producer. You can provide functionality for something you think compliments the space its on. Or to be more specific, it allows you to place your ads, software, videos, etc. where customers can more easily find them.
Regarding widgets, Netscape and Ning founder Marc Andreessen is quoted in the article as saying , "I think the Internet is going through a major, major shift," "Concepts are now able to spread on a million Web sites. It's super exciting because you can get huge scale very quickly. The big widgets have the potential to become the new networks." When Facebook started to allow widgets, they were taken aback by the avid response.
Coming next is Part 2. Widgets and Toolbars