Internet Revolution

Between 1993 and 1995, the World Wide Web (www, or the Web), a user-friendly information-sharing network system, quietly came into being and began to spread. In its first fifteen years, the Web reshaped U.S.communications, businesses, and politics, fueled worldwide economic growth, and became a central feature in the daily lives of more than a billion people.

The Internet age began in the 1960s, when computer specialists in Europe began to exchange information from a main computer to a remote terminal by breaking down data into small packets of information that could be reassembled at the receiving end. The system was called packet-switching. In 1968, the U.S. Department of Defense engaged scientists to create a national communications system. Experimenting with packet-switching, the government scientists eventually linked several computers over telephone lines to operate as a single system. The system was called the Advanced Research Projects Agency Network (ARPANET).

By 1983, research scientists extended the use of ARPANET to form the early Internet, a large network connecting the internal systems of some universities and laboratories. Users were able to exchange electronic mail (now known as e-mail) and data, access computers at other locations, and communicate through newsgroups (one-topic discussion groups) and bulletin boards (message-posting sites). These exchanges demanded advanced computer skills, and the Internet remained a mystery to those without training.

Berners-Lee invents the Web

In 1989, English scientist Tim Berners-Lee (1955–) began work on a system he would eventually call the World Wide Web. His goal was to make the Internet accessible to everyone. Berners-Lee designed a standard set of protocols,

rules that create an exact format, or pattern of arrangement, for communication between systems. Hypertext Transfer Protocol (HTTP) became the standard communications language on the Web. (Hypertext is any text that can link to documents in other locations. Photos and other images, sounds, and video with links are called hypermedia.)

The next crucial step in the creation of the Web was to establish a server—the computer program that stores information and delivers it in the form of Web pages from one computer to another. The first Web server in the United States, developed at the Stanford Linear Accelerator Center in Palo Alto, California , went live at the end of 1991. Finally, to read the Web, users needed browser software, a program used to view and interact with various types of Internet resources. Berners-Lee developed a text-based Web browser in 1992. With the protocols, server, and Web browser in place, the World Wide Web was available to the public.

The Web improves and spreads

Improvements to the Web made it increasingly simple to use. In 1993, Mosaic, a browser that adapted the graphics, familiar icons (picture symbols), and point-and-click methods, became available. Mosaic caught on immediately—two million users downloaded it within a year. A year later, one of Mosaic's creators devised Netscape Navigator, a highly successful Web browser that gave users more comfortable Web access. In 1995, Microsoft entered the competition with its Internet Explorer.

Simplicity of use immediately brought users to the Web. Internet service providers such as CompuServe, America Online (AOL), Netcom, and Prodigy arose rapidly to meet the enormous demand for servers to link people to the Internet.

Most people working on personal computers (PCs) at home used dial-up connections, which were slow and tied up their phone lines. The first broadband options (meaning “broad bandwidth,” a high-capacity, two-way link between an end user and access network suppliers that provided greater speed than telephone connections) appeared in 1997, but it was not until the early 2000s that millions of homes and offices connected through broadband to the Web on a twenty-four-hour-a-day basis.

The economic boom

During the late 1990s, the United States began to experience an economic boom (upswing) largely due to the success of Web-related companies, which came to be known as dot-coms. Because of the excitement of investors in the new industry, stock prices of the dot-coms soared. (Stock is the value of a company divided into individual shares. When a company goes public, the public can purchase shares.) This caused even more investors to jump in.

In 1995, Netscape offered its stock in a public stock offering. The stock price soared to fantastically high levels, making the company's young founders instant millionaires. Other Web-related industry stocks skyrocketed as well. AOL bought CompuServe in 1998 and Netscape the following year, generating tremendous proceeds each time. In 1997, Yahoo! Inc. was nothing more than a Web search index. By 1999, so many advertisers and investors had jumped on the Yahoo! bandwagon, it had become a major media company worth tens of billions of dollars. The stock of online auction house eBay, one of a growing number of e-commerce companies, increased 2,000 percent in value in less than a year when it went public in 1998. Amazon.com, a seller of books and other merchandise online, was valued in the multibillions long before it made its first annual profit in 2004.

The dot-com bubble bursts

Many dot-com companies were founded by young, innovative people who became suddenly rich when their companies’ stock prices rose. Their employees were typically recent college graduates, lured by high salaries, fun work environments, and the promise of owning shares in ever-soaring company stocks. Dot-coms did not stick to traditional business practices. They frequently offered their services to potential customers for free, hoping to grab a corner of the future market. Profit was not a priority in the short term; in fact, many dot-coms never made a dime.

In 2000, the enthusiasm of investors decreased and dot-com stock prices stopped rising. Dot-coms started laying off their staffs; some merged with competitors. By mid-2001, many were out of business, their stocks worthless. The strongest companies reviewed their practices, cut their budgets, and prepared to compete in a new economy.

Web 2.0 and its social environments

After the dot-com bubble burst, a second wave of Web industries arose, which came to be known as Web 2.0. The leader among them was a successful search engine called Google. (Search engines are software programs that help users locate Web sites. They use programs, called “spiders” or “robots,” that go out and collect information, which is then stored and indexed in the search engine's Web site databases.) Developed by two graduate students in 1998, Google started on a shoestring. Its first offices were in a garage and it was financed by money borrowed from family and friends. The simplicity of this streamlined search engine made it an immediate success. Like most Web companies of the new century, Google added advertising to its pages in 2000, making it a highly profitable business. By 2004, it was handling the vast majority of Web searches and was valued in the billions of dollars. It became common for users to say they were “googling” something, rather than simply “searching for” something.

Many of the second-generation Web sites featured shared platforms called “communities.” Within the community, members could publicly express themselves and participate in exchanges. For example, by the turn of the century, blogs had emerged. A blog (derived from “Web log”) is an online commentary written by a nonprofessional writer in journal style that allows readers to respond. By 2006, there were an estimated sixty million blogs worldwide; by some calculations, a blog was being published every second. Among many other popular Web 2.0 environments are MySpace, a social networking Web site with an estimated 154 million members; and YouTube, a Web site on which users can display videos. Wikipedia, the free online encyclopedia written and edited by its readers, grew into a several-million-article project. These and many other Web communities are credited with changing the nature of popular culture in the United States by challenging the domain of the entertainment industry and professional journalists with the voices of ordinary people.

Web 2.0 companies generally do not follow standard business patterns. Most do not immediately make a profit. Commonly, after a new Web company emerges with something to offer, one of the larger Web companies buys it—sometimes for a lot of money. In 2005–2006, Google purchased YouTube for $1.65 billion; eBay bought Skype, which provides free phone calls via the Internet, for $2.6 billion; and News Corp. bought MySpace for $580 million. During that time period alone, the Web grew more than it had during the entire dot-com boom.

Fifteen-year view of the Web

The World Wide Web celebrated its fifteenth birthday in 2006. An estimated 210 million people in the United States and well over 1 billion people worldwide were regular surfers of the 92-million-site network, and these numbers grow daily. Most businesses conduct at least some part of their operations online. Most people use the Web for everyday aspects of life, such as checking bank balances, accessing work documents from home, donating to political campaigns or charities, and listening to music. The Web also has fueled growth in the global economy, creating new industries that profit by controlling and distributing information rather than manufacturing goods. Much like railroads and electricity in the late nineteenth century, the Web has created a new economic era.