Comparing the online experience today to web surfing of five years ago is like comparing World of Warcraft to the original Atari game system. During the web’s earlier days, Mayfield backed a wide variety of Web 1.0 startups, including affinity portals like PlanetOut and Military Advantage, financial site Motley Fool, e-commerce sites such as textbook seller Varsity Group and digital media provider Snapfish. The arrival of Web 2.0 has ushered in a raft of new companies built around ideas like content file sharing, blogging, social networking, wikis, multi-player online gaming, and targeted search. Today startups are tapping the collective intelligence of web users to build new business models in a world increasingly focused on community building and enabling tools.

Here are some industry trends that are influencing our digital media and consumer investments today.

The third inning of search. We’ve only seen the beginning of the search industry’s potential.  Today, organic search results from the major search engines are indistinguishable from each other.   New companies will face the challenge of providing better context and relevance in an era of information overload.

The collision of enterprise applications and the web. This clash has helped create new applications that help make businesses more productive. Web 2.0 companies are using wikis to build a range of productivity applications that sell to large and small businesses, as well as consumers. New online services offer busy professionals tools to let them better schedule and manage their most precious resource: time.

The creation of next-generation, new media content management systems. Online publishers, e-commerce retailers and consumer companies are all trying to figure out how to include user-generated content and community functionality on web sites to engage customers in brand-building conversations. “Every major web site will have a set of community-building capabilities within a few years,” says Mayfield Managing Director Allen Morgan.

An ongoing shift of advertising dollars from traditional media to the web. This shift has created a demand for better infrastructure and measuring tools to track ad revenue and click habits. “The media industry is undergoing a disruptive transformation that will result in a number of  new media properties, technology platforms and delivery methods,” says Mayfield Managing Director Raj Kapoor.

The rise of the teen/tween market. This web-savvy youth market is focused on self-expression and social networking and presents a new set of marketing challenges for startups.