The article is wildly wrong:

The Web? On the whole, it is wildly 'innovative'. Moreover, it is a huge aid to economic productivity and, thus, standard of living and quality of life.

Search engines? On the whole, they are wildly innovative and productive because they help solve a huge problem on the Internet -- finding stuff.

More in search engines? Yes, needed because the only search, discovery, recommendation, curation engines that work well are the ones based on keywords, and they work well for only about one-third of the content. How to get a search engine that also works well for the other two-thirds? That needs some 'innovation'!

A better search engine will likely have to make progress with how humans understand 'information' and 'meaning', and that will need some 'innovation'.

The author views 'innovation' mostly just in terms of what happened in the first half of the 20th century. Innovation is in different areas now. The author is also missing that to support the new approaches to innovation, Intel is now making 3D transistors with 22 nm feature sizes, and that in itself is history-making innovation.

Ads? So far the Internet is heavily supported by ads. Why? Because it's important to connect people with products and services. Why important? Because a key part of a higher standard of living is having people better allocate their limited resources, and key to this is getting people the information they need for such better allocations. One way to get the information is to have a person use a search engine to find the products and services. Another way is to have a vendor of products and services use ads to find the people. So far both ways are important.

The article wants to assume that ads are bad, and this is not good. There must be something very important about ads since they support nearly all of TV, radio, professional sports, just say, old media, and now the Internet. Pro basketball players? Basically they are in the ad business.

One reason entrepreneurs are rushing to Web x.0 companies is that's where the money is. And the money is not just in the US: The US companies that lead in this work rapidly become successful internationally. It's foolish to say that all this activity, internationally, is bad.

But not everything has to be international: The US did just fine, thank you, from about 1850 to 1950 growing mostly just internally and with relatively little role for foreign trade. So the claim in the article that there's something wrong with the US selling to itself is wrong: The better standard of living we want is from getting the work done, and we get it done by specialization with one person selling to another. All this does better when there is more efficiency, and the information via the Internet is a key here.

More information? Currently the US and more important world economies are in a Great Recession. The core reason? Bad information. Thus much of the solution will be better information. Generally information is just crucial for higher standards of living. The best thing that's happened for information so far is just the Internet.

Internet blogs are important, too: They can clear up misunderstandings caused by confused people!

But for some of the innovation the author seems to be dreaming about, that's coming: The foundation is Moore's law, the Internet, and infrastructure software. Broadly the path to more economic productivity is to automate, that is, have the machines do the work. Yes, we want the machines building houses and cars, growing crops, tending livestock, manufacturing boxes, bottles, and gadgets, making fiber, thread, cloth, and clothes, analyzing data needed for progress, yes, including in medicine, etc. It's coming.