Every year, technology and innovation seem to grow at an increasingly rapid rate, with each year bringing about more and more innovation. This year was no different. 2010 has seen innovation occur at break-neck speeds. And during this month when everyone and their brother does Top 10 lists, here’s my take on some of the biggest things happening in technology during 2010.

1) Continuous Rise of Facebook

2010 has, of course, seen a continued and steady rise of Facebook to new and greater levels of dominance on what seemed like a daily basis. They have become so large that they have affected nearly every person on the planet, often for the better, and have also managed to become a threat to nearly every other company on the Web, making numerous enemies. One thing is true about Facebook: they are a very innovative company. They have not rested on their laurels and have been consistently trying improve their product. They are quickly moving into every other large technology company’s space. They are the biggest threat to Google and rumor has it that the Facebook phone might be coming out in 2011.

[login]While Facebook is a great company, more and more people have been forming the opinion that no company should be as big and as powerful as Facebook is quickly becoming. While there are many larger companies in sheer size or revenue, Facebook in particular has a track record of not always being kind to others. It’s a company to keep a careful eye on.

2) Rise and Tail Off of Twitter

Twitter has for some time been thought of as the only major threat to Facebook in the social space.  In 2010, Twitter has faltered in a very important area where Facebook has managed to succeed: curbing marketing spam from brands and companies. That has made a big difference and has slowed the adoption of Twitter by non-brands. Facebook, on the other hand, has done a lot to shield their users from marketing spam and has nearly solved the problem of brands over-spamming people.

It feels like the early strength of Twitter, which was to get people to listen instead of speaking, is disappearing by the minute because of all the spam noise out there that Twitter has not been able to slow down. It makes listening more difficult, and speaking pointless because few people can hear one another through all the noise on that platform.

3) Continuous Rise of Mobile

In 2010, Google has become a major competitor to the iPhone, but that is just the beginning of the mobile story for the ending year.  Possibly a bigger phenomenon have been companies like Gowalla, FourSquare and a slew of others.  These companies have been able to take the maturing GPS technologies on the mobile phones and use the GPS to create new types of businesses where people can use their phones to engage with various venues or other attendees of events they are visiting.

4) Pressure on Google

In the last 10+ years Google has never been as threatened as it is currently threatened by Facebook. The danger to big G is not just in technology.

Facebook has blossomed in Palo Alto, which is just a 10 minute drive from the offices of Google. Both of these companies are fighting for employees, and Facebook has been heavily recruiting Google employees, giving them strong bonus packages to jump ship from Google to Facebook.

Google is also facing challenges in technology. Google has always known the most about all the sites on the Web. Facebook now knows the most about people on the Web. Knowing about people has shown to be more powerful than knowing more about websites. Google has still been able to show strong revenue growth by making changes to their search to show more sponsored listings, but they are also jeopardizing the simplicity of their interface which was something that played a key role in making them successful in the first place. 2011 will be an interesting and trying year for Google.

We are in for some interesting developments in the tussle between Google and Facebook.

5) Groupon Phenomenon

While Apple, Google and Facebook get much of the attention, a new type of phenomenon has swept the Web. Groupon, which boasts one of the simplest business ideas you could ever realize in hindsight, has experienced tremendous growth during 2010.

By offering a really nice daily group coupon in every major city in the United States, and buying enough advertisement to drive tremendous traffic to the business which offers that ad, Groupon has grown to earning about $2 billion in revenue and earning a buyout bid from Google for $6 billion, which Groupon ended up rejecting.

Since the Groupon business model is so simple, there have been tens of other, smaller companies, which offer a spin on the Groupon model, either by focusing on specific types of coupons, or locations where Groupon has not been strong.

6) Rise of Angel Investors

The past few years of technology innovation and prosperity has led to many of the entrepreneurs of yesterday to become the investors of today. Additionally, tech investing has become dirt cheap. A typical seed or angel investment round is commonly under 50k and is quite often as low as 20k. Modern Web startups have nearly no hardware costs, marketing costs can be minimal as well, and so can the labor costs. That allows the small investment sums to go a long way in growing the company. The past year has also been a confirming year for seed programs like Y-Combinator or TechStars. These seed-round incubators tend to invest around 20k, provide mentoring, office space, access to free PR, and often even housing. During 2010, a number of the early companies who have graduated from such incubators have become strong players in the start-up scene and the web industry overall. As an example of some of the success of the Y-Combinator companies, just 2 days prior to the day of me writing this article, Cloudkick (a Y-Combinator company) was ackuired by Rackspace.

7) The Startup Boom

It may sound like a broken record, but 2010 has further defined how much capital it should take to bring a product to market for a startup. It takes very little funding, which means more and more people who want to become entrepreneurs, can now do so. That low barrier has given rise to many new startups that seem to pop up daily from garages from across the country.

Additionally, startup education and access to information for sound practices for how to create and run companies has become widely distributed and is now accessible to anyone who wants to learn.

8) Complete Takeover of Social Web

If it wasn’t clear before, it should by now be completely clear that, moving forward, just about everything that we’ll engage with on the Web will have a social component to it. The social aspect of the Web has far more reaching affects than just Facebook. Companies realize that leveraging friend recommendations and referrals is the cheapest and best-converting type of traffic they can attract.

Personal interaction makes sites more interesting and engaging. Companies try to get people to do more while they’re visiting the site by interacting with other site members.

Chess.com is a great example of leveraging the social component of their niche. Although they started by simply enabling people to play chess, their users can now join online chess clubs and teams, make friends with other chess players, and join personal or team tournaments. They even allow people to compete for their country in a world chess league, which has quickly become one of their most engaging features.

9) Mainstreaming of The Check-in and Badge Phenomenon

Does it seem like every site out there has started giving out virtual badges, stickers, trophies, points, and even virtual dollars? FourSquare was probably the first company to truly leverage the phenomenon of people willing to do seemingly anything to earn a virtual badge. Many companies followed the path laid out by FourSquare in creating their own versions of virtual currencies and rewards. Even Chess.com has virtual trophies that people can win or award to one another. Many people get very excited about earning badges and trophies.

In their quest to win the badges, some people can get to nearly obsessively use of the site. Site owners love this because higher usage levels usually translate to making more money earning more friend referrals.

Soon there will even be check-ins to TV shows. A company named GetGlue is becoming the main player in entertainment check-ins, so look forward to that in 2011 as their service becomes even more mainstream.

10) Uncertainty For the Future

While the tech industry has seen very good growth through 2010, there has been an underlying feeling of uncertainty in where the greater economy is going. Additionally, a number of technology, innovation, and entrepreneur-friendly political movements have not gotten any traction with the current administration. One particular example that alienated the tech world was the “Startup Visa” initiative which was a way to get potential entrepreneurs and founders of companies into the United States with the hope of creating thriving companies which
would in turn create jobs for Americans.

So with the great momentum in innovation, cautious outlook on the economy, and the current administration, we head into 2011. Lets make it a great year!