This paper discusses and highlights the potential of Web 2.0 in the context of libraries. Internet in general and Web in particular are playing a vital role in computer-mediated scholarly communication. The objective of this study is to identify the purpose, characteristics, support system in research and changing environment as a result of using Web 2.0 technologies and tools. The findings of the study acknowledge the strength of Web 2.0 tools in improving library services for users. Really Simple Syndication (RSS), Instant Messaging (IM) and Blogs are popular in webbased libraries. The paper concludes by offering best practices for implementing Web 2.0 tools for new web-based libraries. Thus, these emerging web-based features (Web 2.0) are opening up new avenues and giving libraries the ability to offer the improved, customer-driven services to the user communities.