The Biggest Tech Surprises and Disappointments in 2010

Facebook far exceeded even the most optimistic expectations for the year.At its core, the technology industry is one of innovation, in which people work to create something new that has a significant impact on the world. Creating something new is the easy part; much harder is being able to predict if and when those novelties will make their mark, rather than fade into oblivion.

But with 2010 now over, examining its biggest surprises and disappointments can yield some lessons about the latter. We took a close look at some of the innovation that drove the technology industry and shaped our everyday lives -- and some that didn't. Here are four of the biggest tech surprises in 2010, and three of its biggest disappointments.

Top Tech Surprises

1. Facebook's stunning success: The surprise here isn't that Facebook had a good year, but that its success far exceeded even the most bullish expectations. A year ago, observers predicted the social-networking site would bring in $1 billion in 2010 -- and that forecast seemed optimistic considering that nobody had ever made that much money from a social network before. Instead, Facebook may see $2 billion in revenue this year. The company worked hard to bring big brands to its site, and to get users to "friend" them. CEO Mark Zuckerberg became a household name that was mentioned more frequently in news stories than even Apple (AAPL) CEO Steve Jobs.

2. The iPad: Not that Jobs had a bad year. In the months before and after he unveiled the iPad, many tech pundits predicted the tablet would be a bust. Some dismissed it as a supersized iPhone. But 10 million iPads later, those naysayers may be wishing they had stayed quiet. An even bigger surprise that the iPad's soaring sales has been the power of its apps to do things few could have dreamed of a year ago.

More surprising than the iPad's sales is the potential of its apps to do things few dreamed of a year ago. Netflix made movie viewing more intimate than ever; Magic Piano let us brush up our music skills; Epicurious brought thousands of large-print recipes into our kitchens; and GoSkyWatch helped us stargaze on the go. And media companies have redesigned their content around the iPad.

3. The decline of glitz games: For decades, video-game makers strived to create a virtual-reality effect through realistic graphics and 3-D images, which kept the bulk of the industry's control in the hands of big companies that could afford those big development costs. In 2010, the balance of power tipped dramatically in the other direction. The hottest game, Angry Birds, showed how to immerse players with back-to-basics graphics. Online games went mainstream too, not through graphics-intensive titles like World of Warcraft, but through much simpler Zynga titles like Farmville.

4. The rise of Groupon: Thanks to Amazon's (AMZN) success, a lot of commerce has moved online. But there has been one glaring exception – the mom-and-pop retailers and restaurateurs, which never previously leveraged the power of the Web to draw new customers. Groupon changed this seemingly overnight. The company combined e-coupons and group buying to send droves of new consumers to businesses that signed up to offer daily-deal discounts. Groupon's success allowed it to rebuff a $6 billion bid from Google, which was quickly followed by a private investment valuing it as high as $8 billion.

Big Disappointments

1. The demise of privacy: The longer you have been online, the better you understand that privacy is at most an illusion. It's no longer true that, on the Internet, nobody knows if you're a dog. It's only a matter of time before you are outed, and soon plenty of websites will start serving you ads for dog food. In 2010, the fight for privacy lost even more ground. Even after Facebook suffered huge privacy fiascos, most users apparently have remained content to have their intimate personal data shared with advertisers. It's come down to privacy versus ad revenue – and the money side is winning.

2. Location and augmented-reality apps: Early in 2010, many were expecting big success stories around apps that use geolocation and augmented-reality technology to create mind-blowing new features. That didn't quite happen. While location became an added feature in apps like Facebook, others that relied heavily on it – like Foursquare and Gowalla – failed to find mainstream appeal. And we're still waiting for a killer app that can turn a big crowd of smartphone users on to augmented reality. Instead, the best selling apps were largely games.

3. Google Buzz: For years, Google (GOOG) has had to contend with criticisms that it's a one-trick pony. While search is a nice pony to have, the company needed to break into newer Web areas like social networks. Buzz was supposed to change that, but it stumbled out of the gate. Maybe 2011 will bring Google greater success in moving beyond search into the social Web.

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