Last year $1.34 billion was invested in so called “Web 2.0 deals.” Of that, Facebook accounted for 22 percent. The second largest investment was for Ning, Marc Andreessen’s startup that has generated a lot of buzz and has been experiencing continued growth. While it was a record year for Web 2.0, growth slowed especially in the Bay Area but outside of the Bay Area growth exploded. Web 2.0 investments are a small portion of total investments though because the companies are relatively cheap.

According to one report, the media deal size for Web 2.0 investments was $5 million, far behind the $7.6 million industry media for venture deals. The average company is also being given a $10 million pre-money valuation. That’s a far cry from the $15 billion valuation granted to Facebook.

It would be interesting to see the breakdown of these various investments in terms of the segment of the web they are targeting. For instance, the extremely popular Etsy company has received substantial investments and is being hyped as the next eBay. Companies looking to profit from the rapidly transforming social web have accounted for a small yet increasing portion of Web 2.0 investments.

As a side note, if venture capitalists aren’t big fans of buzzwords such as “Web 2.0″ why are their investments being classified as “Web 2.0 investments”?