Collaborative learning and knowledge sharing could be a useful process for any level of education. Web 2.0 tools can provides all possible functionality for collaborative learning among the students of an educational institute. These tools could guide the students to do their projects or group assignments, finding solutions of a critical problem on the intranet knowledge base. The suitable Web 2.0 tools can generate a great learning space for the students in regard on aspects about usability, human cognition and to create a user-friendly environment. This can be done in many different areas as Web 2.0 take on many forms. The purpose of this research is to figure out different types of Web 2.0 tools which are preferred to use in an educational setting for collaborative learning. The author also evaluates the advantage of using Web 2.0 tools in collaborative learning. The educational settings acquire classroom education, distance education, research, and language learning and so on. Web 2.0 tools such as wikis, blogs, RSS and social bookmarking etc. with education process. The collaborative learning idea provides information system researchers with a deeper understanding and insight of the overall education system where Web 2.0 tools are integrated.