It’s been almost a month since Raghu Kakarala and I discussed widgets together at a Lunch seminar, and there’s been enough interesting news since then that it warranted an update on this topic. The take-away points were: widgets are here to stay (in other words: not a fad), they can be either extraordinarily interactive or simple (so build one if you haven’t yet). and widget distribution is key (because it will extend the footprint of your website’s reach).

Now that you’re all caught up, here’s your widget update for December:

Widget vs. Gadget Debate

We found it interesting that widgets go by various names. For instance, Yahoo and Apple use the term ‘widgets’ whereas Google’s iGoogle and Microsoft’s Live Spaces use the term ‘gadgets.’ According to Widgets Lab, the distinction between widgets and gadgets is that gadgets live in a specialized web environment (also referred to as an ecosystem). Unfortunately, Google has recently made their gadgets interchangeable between the web and the desktop sidebar so this naming convention will likely go by the way side.

Monetization of Widgets Debate

As widgets have become increasingly popular, technology pundits have challenged the widget community to show them that widgets have real monetary value. News broke last week that GoodWidgets, a widget company that offers a slideshow widget, is up for sale for $10k. While this is “small potatoes” in comparison to other widget makers like Slide (Slide is Pitching For A $200 Million Valuation. Or Not.), it demonstrates that widgets are evolving into a “product” that can be sold. This comes on the heels of news that Clearspring has rolled out an ad network for widgets which lets users monetize their widget traffic. So while we’ve still got a long way to go, there’s at least monetization momentum.

e-Commerce Widgets Become More Seamless

In our presentation, we talked about eBay’s listings widget that could feature items from eBay stores. The idea was that famous listings can garner more attention. In other words, now your blog post on the recent Britney Spears Birthday Bash could include the listing for the half-eaten chocolate cake from the party. Well, it seems that PayPal is taking that same concept a step further by offering a PayPal storefront widget with a shopping cart. So now blog owners can create a store, add merchandise that’s relevant to their posting, and post the store to their blog. The neat thing about this concept is that only the financial portion of the transaction has to be completed on the PayPal site.

Again, it is another step for widgets becoming more useful and a part of the mainstream web.