Actually, I've often felt that "first comer advantage" is more of a DISadvantage, in all aspects of tech, not just Web2.0. I think that overall there are more historic examples of the first-comers not being the dominant market leaders. This goes all the way back to the dawn of the PC (CP/m vs, MS-DOS, VisiCalc vs. Lotus 123 vs Excel, WordPerfect vs. MS-WORD, etc.).
It is difficult and expensive to create a new product, and thus a new market. It takes a lot of time effort and energy to figure out what people want and how to deliver it. Almost every new technology startup has a 20 man-years worth of features and ideas that they just don't have time to implement. Similarly, they often have 20 man-years worth of work wasted on features that didn't get used or pan out the way expected.
Contrast this to a "second-comer" company who only has to look at what is currently working for the "first-comer" and look at what is missing that customers want (things on that 20 man-year long list of RFE's). This second-comer has a much more pinpointed goal, they know better what they want to develop and how it should look in the end. They also do not have to wait for a customer base to develop, or expend marketing dollars to create demand. Additionally they can piggy-back on the marketing dollars that the first-comer invested (Check out bar.org, it's like foo.com but without all the annoying baz).
It is difficult and expensive to create a new product, and thus a new market. It takes a lot of time effort and energy to figure out what people want and how to deliver it. Almost every new technology startup has a 20 man-years worth of features and ideas that they just don't have time to implement. Similarly, they often have 20 man-years worth of work wasted on features that didn't get used or pan out the way expected.
Contrast this to a "second-comer" company who only has to look at what is currently working for the "first-comer" and look at what is missing that customers want (things on that 20 man-year long list of RFE's). This second-comer has a much more pinpointed goal, they know better what they want to develop and how it should look in the end. They also do not have to wait for a customer base to develop, or expend marketing dollars to create demand. Additionally they can piggy-back on the marketing dollars that the first-comer invested (Check out bar.org, it's like foo.com but without all the annoying baz).