Web services allow applications to communicate over the web through open standards like XML, SOAP, WSDL and UDDI. They enable modular application integration and provide advantages like reduced costs and incremental implementation. Key technologies include XML for tagging data, SOAP for messaging, WSDL for describing service capabilities, and UDDI for publishing and discovering services. Real-world examples show how companies use web services to unify communications, provide real-time access to information, and integrate applications between different platforms.