Dance band Gnarls Barkley has reached number one in the singles charts with Crazy, purely on download sales. That was the fun fact of last week, but of little relevance to most businesses outside the music industry, right? Perhaps, wrong.

The story is as much about marketing as it is about the decline of the CD. The success of Crazy is linked to the band’s presence on MySpace.com, now the second busiest site on the internet by some measures. Acquired last year by Rupert Murdoch’s News Corporation, MySpace is a networking site that is now deeply embedded into the social life of millions of young people.

It is classic Web 2.0: entirely server-based, with features including easy web authoring and blogging, a shareable personal calendar, web email, groups, forums, and a focus on independent music. The Gnarls Barkley number one shows how such sites have an economic and social significance.

Still, the Web 2.0 hype does feel like a bubble, fascinating for a small minority of internet obsessives, but not important to the average business. I put this argument to Web 2.0 guru and publisher Tim O’Reilly, the man who first popularised the term.

He insisted this view was wrong. “The internet and the consumer phenomenon on the internet are really predictions from early adopters about the future,” he said. So how is it affecting business? “Take a look at eBay, for example. It is already creating new competition for many businesses. The market in used books on Amazon is probably changing the landscape of publishing more than electronic publishing.”

O’Reilly sees the trend extending to manufacturing. “You’ll be able to put together pluggable supply chains at a much lower level. I would be very surprised if we don’t end up with an eBay for manufacturing, where people match up supply and demand over the internet.”

Another area is comparison shopping. “There’s a bunch of research projects where you can point your camera phone at the barcode on an item and get consumer ratings on it. The democratisation of information will let you get information about products and figure out whether it’s a good price or not. That will affect every retailer in the business.”

O’Reilly is right and there are many implications. One is rather obvious, which is that the web is becoming both a primary source of information and the preferred means of conducting transactions, especially among young people of the MySpace era, who will take that culture on into their business lives.

In this light, it is surprising how many businesses still treat their web presence as little more than an online brochure, with a phone number or a contact form, for prospective customers.

Another facet is interactivity, or what O’Reilly calls harnessing collective intelligence. The PHP web application language has the best documentation in the business for one simple reason – every online entry is richly annotated by users. Again, it is surprising how many web sites fail to give their customers an easy way to share their knowledge. It is not hard to grab some Web 2.0 goodness.