This paper discusses the potential of learning technologies to foster competence development of students. It aims to improve understanding of pedagogical conditions that have to be met to establish a competence orientation in e-learning. We review the literature to summarise recent changes in e-learning, identify attributes of web 2.0 technologies, revisit the concept of competence and specify implications for the competence-oriented design of learning environments. By referring to Kolb's learning cycle, we illustrate this view with a case study on the use of Google Apps as collaborative learning environment and recommend how competence-oriented e-learning activities can be created. Our findings reinforce the position that web 2.0 tools enable a shift from a distributive to a more collaborative mode in e-learning. In particular, the ease of use and intuition of web 2.0 technologies allow creating learning environments, which realise activity-rich pedagogical models and facilitate competence development of students. The paper concludes that, despite the demand of firms for versatile graduates and the obvious potential of learning technologies to foster competence development of students, universities need to establish institutional strategies to make this pedagogical change happen.