Over the last several years, a variety of Web 2.0 applications has been widely adopted by individual users and recently has received great attention from organizations. While an increasing number of organizations have started utilizing Web 2.0 applications in hopes of boosting collaboration and driving innovations, only a small number of different theoretical perspectives are available in the literature that facilitate a further understanding of the phenomenon of organizational adoption of Web 2.0 to drive innovation. In this paper, we propose a theoretical model explicating this phenomenon from the perspective that Web 2.0 use enhances knowledge transfer by fostering the emergence of informal networks, weak ties, boundary spanners and social capital. This model conceptualizes the process through which organizations drive innovations by utilizing Web 2.0 applications. Based on this perspective, suggestions for organizations to facilitate this process are also provided.