The Internet and American Business

The Internet and American Business

William Aspray
Paul E. Ceruzzi
Copyright Date: 2008
Published by: MIT Press
Pages: 608
  • Cite this Item
  • Book Info
    The Internet and American Business
    Book Description:

    When we think of the Internet, we generally think of Amazon, Google, Hotmail, Napster, MySpace, and other sites for buying products, searching for information, downloading entertainment, chatting with friends, or posting photographs. In the academic literature about the Internet, however, these uses are rarely covered. The Internet and American Business fills this gap, picking up where most scholarly histories of the Internet leave off--with the commercialization of the Internet established and its effect on traditional business a fact of life. These essays, describing challenges successfully met by some companies and failures to adapt by others, are a first attempt to understand a dynamic and exciting period of American business history. Tracing the impact of the commercialized Internet since 1995 on American business and society, the book describes new business models, new companies and adjustments by established companies, the rise of e-commerce, and community building; it considers dot-com busts and difficulties encountered by traditional industries; and it discusses such newly created problems as copyright violations associated with music file-sharing and the proliferation of Internet pornography. ContributorsAtsushi Akera, William Aspray, Randal A. Beam, Martin Campbell-Kelly, Paul E. Ceruzzi, James W. Cortada, Wolfgang Coy, Blaise Cronin, Nathan Ensmenger, Daniel D. Garcia-Swartz, Brent Goldfarb, Shane Greenstein, Thomas Haigh, Ward Hanson, David Kirsch, Christine Ogan, Jeffrey R. Yost William Aspray is Rudy Professor of Informatics at Indiana University in Bloomington. He is the editor (with J. McGrath Cohoon) of Women and Information Technology: Research on Underrepresentation (MIT Press, 2006 Paul E. Ceruzzi is Curator of the National Air and Space Museum, Smithsonian Institution, Washington DC. He is the author of A History of Modern Computing (second edition, MIT Press, 2003) and Internet Alley: High Technology in Tysons Corner, 1945-2005 (MIT Press, 2008)

    eISBN: 978-0-262-25567-7
    Subjects: Technology

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface
    (pp. vii-viii)
  4. Acknowledgments
    (pp. ix-x)
  5. I Introduction
    • 1 Introduction
      (pp. 3-8)
      William Aspray and Paul E. Ceruzzi

      When we think of the Internet, we generally think of Amazon, Google, Hotmail, Napster, MySpace, and a host of other sites for buying products, searching for information, downloading entertainment, chatting with friends, or posting photographs. If we examine the historical literature about the Internet, however, it is hardly an exaggeration to say that none of these topics is covered. This book aims to fix this problem.

      It is not as though historians and academically minded journalists have not paid attention to the Internet. Yet their focus has mainly been on the origins of the Internet in the 1960s and 1970s...

    • 2 The Internet before Commercialization
      (pp. 9-44)
      Paul E. Ceruzzi

      One popular history of the Internet begins by quoting a pioneer’s hopes that historians would dispel the myth, already prevalent, that the Internet was invented “to protect national security in the face of a nuclear attack.”¹ That such a myth has arisen is no surprise; the speed at which the Internet became a part of American society complicates an attempt to write an objective history of it. The steamboat, the mass-produced automobile, and interchangeable parts had myths about their invention, too. With careful and patient scholarship, a more complete picture of those technologies emerged. After such research, historians often realize...

  6. II Internet Technologies Seeking a Business Model
    • 3 Innovation and the Evolution of Market Structure for Internet Access in the United States
      (pp. 47-104)
      Shane Greenstein

      How and why did the U.S. commercial Internet access market structure evolve during its first decade? Neither question has a ready answer. Within the United States, the first country to commercialize the Internet, business development did not follow a prescribed road map. Events that came after the National Science Foundation (NSF) privatized the Internet—such as the invention of World Wide Web and the commercial browser—created uncertainty about market value. In the midst of diffusion a major piece of legislation, the 1996 Telecommunications Act, altered many of the regulatory limits that shaped business decisions. Technological capabilities and business operations...

    • 4 Protocols for Profit: Web and E-mail Technologies as Product and Infrastructure
      (pp. 105-158)
      Thomas Haigh

      The Internet evolved with breathtaking speed during the 1990s, from an obscure, academic system to a mainstay of the developed world’s daily routines of communication, shopping, travel, entertainment, and business. As millions of ordinary people rushed to connect their computers to the network, most were driven by a desire to use two particular kinds of programs: e-mail systems, and the World Wide Web. These were the so-called killer applications of the Internet during its commercialization: specific application programs so compelling that people were prepared to purchase an entire computer system in order to use them.¹ Both played two roles at...

    • 5 The Webʹs Missing Links: Search Engines and Portals
      (pp. 159-200)
      Thomas Haigh

      As a dense but disorganized jungle of information, the Web has always relied on automated search engines, human-compiled directory services, and what came to be known as Web portals to steer its users toward the material they seek. Unlike other electronic publishing systems the Web had no central directory or integrated search function, so these services played an integral role in establishing the Web as a useful publishing medium. Search engine firms such as Excite and Lycos were among the first Internet companies to make initial public offerings, fueling the boom for dot-com stocks during the late 1990s. Although the...

    • 6 The Rise, Fall, and Resurrection of Software as a Service: Historical Perspectives on the Computer Utility and Software for Lease on a Network
      (pp. 201-230)
      Martin Campbell-Kelly and Daniel D. Garcia-Swartz

      The idea of Software as a Service (SaaS) seems to have taken the computing world by storm. Although many different meanings have been attached to the SaaS concept, the basic one involves software that resides on a server and is accessed through the Internet on a subscription basis. More specifically, for software to be delivered according to the SaaS model, at least the following has to hold: first, companies have to be able to access noncustom software through a network; and second, the management of that software has to be network-based also.¹

      The revolution that SaaS is allegedly bringing about...

  7. III Commerce in the Internet World
    • 7 Discovering a Role Online: Brick-and-Mortar Retailers and the Internet
      (pp. 233-258)
      Ward Hanson

      Physical retail outlets, brick-and-mortar retailers, have been slow to adopt e-commerce. This may seem surprising, given the close contact that retailers have with consumers, and the wave of publicity and interest in all things Internet during the last decade. Brick-and-mortar retailers might have embraced Internet selling enthusiastically, moving quickly to provide online information, conduct commerce, and offer both pre- and postsales services. Established retailers possess inherent advantages over retailer entrants, such as existing vendor networks, category familiarity, retailing experience, and a local presence. Instead, the most important online retailing innovations came from elsewhere.

      It was venture-backed dot-coms and small firms...

    • 8 Small Ideas, Big Ideas, Bad Ideas, Good Ideas: ʺGet Big Fastʺ and Dot-Com Venture Creation
      (pp. 259-276)
      David A. Kirsch and Brent Goldfarb

      In September 1998, Jeff Pape founded in the Chicago suburb of Franklin Park. His strategy was straightforward. In the sporting goods industry, wrestling gear represented a small, seasonal market. Every fall, young wrestlers went to local sporting goods retailers expecting to be frustrated. Limited local demand meant that stores carried only limited inventory. Few alternate retail channels existed. A former wrestler, Pape remembered this frustration only too well. With the arrival of the Internet, he saw the possibility of helping tens of thousands of wrestlers get the gear they wanted without having to settle for what local retailers happened...

  8. IV Industry Transformation and Selective Adoption
    • 9 Internet Challenges for Media Businesses
      (pp. 279-314)
      Christine Ogan and Randal A. Beam

      Murdoch, the entrepreneurial media baron who controls News Corporation, has a track record of placing savvy bets on ventures he believes in and making them pay off handsomely. In the mid-1980s, he surprised television industry analysts by stitching together ninety-six local stations, creating the FOX television network.¹ Few of those analysts thought the FOX network would be around at the end of the century. But it’s still here and has, in itsAmerican Idolfranchise, the two most popular shows on television.² Murdoch had doubters again when he launched the FOX News Channel on cable in 1996, facing off against...

    • 10 Internet Challenges for Nonmedia Industries, Firms, and Workers: Travel Agencies, Realtors, Mortgage Brokers, Personal Computer Manufacturers, and Information Technology Services Professionals
      (pp. 315-350)
      Jeffrey R. Yost

      The Internet and the World Wide Web have become ubiquitous throughout the industrialized and increasingly the developing world, inspiring substantial and ever-growing interest in the impact of these technologies on economics, management, politics, and culture. Though the Internet and American business is a topic that has attracted widespread attention, often scholars, journalists, and others have written about it unevenly. Certain topics—the rise of e-commerce, “the dot-com collapse,” intellectual property, and corporate “e-strategies”—have been examined frequently. In business journalism, the transformation of media firms and industries has been a common subject, while the more specialized trade press has focused...

    • 11 Resistance Is Futile? Reluctant and Selective Users of the Internet
      (pp. 351-388)
      Nathan Ensmenger

      “Happy families are all alike; every unhappy family is unhappy in its own way.” This famous opening line ofAnna Karenina, suitably modified, might apply also to the study of the Internet and its influence on American commerce. It is relatively easy to describe the shared characteristics of those markets and industries that have readily embraced Internet technologies. We can do so using the seemingly imperative logic of economic rationality: reduced transaction costs, efficient distribution channels, disintermediation, and economies of scale and scope. Understanding why some users and industries might resist the Internet, or at least adopt it reluctantly or...

  9. V New Technology—Old and New Business Uses
    • 12 New Wine in Old and New Bottles: Patterns and Effects of the Internet on Companies
      (pp. 391-422)
      James W. Cortada

      Discussions about the role of the Internet in businesses are often loud, passionate, and indeed strident. Not since the deployment of computers across the U.S. economy in the 1950s and 1960s, or even personal computers in the 1980s, has there been so much attention and gushing hubris devoted to an information technology as Americans have experienced with the Internet. A search on Google for businesses and the Internet, or any other combination of similar terms, can generate anywhere from a hundred thousand “hits” to well over a million. The word Internet alone spins off nearly 2.5 billion citations. Every major...

    • 13 Communities and Specialized Information Businesses
      (pp. 423-448)
      Atsushi Akera

      This chapter focuses on the opportunities afforded by the new Internet-based businesses and services that cater to communities. On the one hand, this domain has been occupied and studied by researchers and practitioners who comprise the emerging field ofcommunity informatics, which defines itself as a group concerned with “the use of Information and Communications Technologies (ICT) for personal, social, cultural or economic development within communities, for enabling the achievement of collaboratively determined community goals, and for invigorating and empowering communities in relation to their larger social, economic, cultural and political environments.”¹ Yet a quick look at how the notion...

  10. VI Newly Created or Amplified Problems
    • 14 File Sharing and the Music Industry
      (pp. 451-490)
      William Aspray

      This chapter tells the story of the use of the Internet to share music.¹ It is a story of business interests, legal prohibitions, artistic expressions, and consumer desires. The most famous episode in this story is the use of Napster between 1999 and 2002 by millions of people to share music freely with one another—freely in both the sense of sharing with anyone connected to the Internet and also in the sense of sharing at no cost—and the ultimate destruction of the original Napster through the efforts of the music establishment using legal means. However, the story is...

    • 15 Eros Unbound: Pornography and the Internet
      (pp. 491-538)
      Blaise Cronin

      Noël Coward thought pornography was “terribly, terribly boring.” Tens of millions of Americans disagree. At least it would be difficult to conclude otherwise given the billions of dollars spent annually on legal sex goods and services in this country—a point made, I believe, by Nadine Strossen, president of the American Civil Liberties Union: “Of the $10 billion sex industry, it’s not ten perverts spending $1 billion a year.” And she might have added, it is not just the United States; nor is it just what might be termed the Internet effect. By way of illustration, in Finland, a small...

  11. VII Lessons Learned, Future Opportunities
    • 16 Market and Agora: Community Building by Internet
      (pp. 541-556)
      Wolfgang Coy

      In the beginning for academia, the Internet could be seen as an extension of the public library, enhanced by data files, access to distant computers, and a new communication path called e-mail. Though the use of distant computing services to access prevailed, the use of e-mail and file transfer protocol demonstrated the usefulness of the Net also to scientists and students outside computer science or particle physics. The Net was initially just another, albeit new, example of scientific communism, the liberal sharing of resources among “those that had access” as part of academia.¹ This idea of a sharing community is...

  12. 17 Conclusions
    (pp. 557-564)
    William Aspray and Paul E. Ceruzzi

    When the journalAnnals of the History of Computingwas founded in the late 1970s, its editorial board established a rule that it would not publish accounts of computer history unless the events described occurred more than fifteen years before publication.¹ The contributors to this volume, many of whom have also contributed to that journal, have obviously relaxed that rule. Of all the chapters, perhaps only chapter 2 would satisfy theAnnals’fifteen-year rule; some would not even satisfy a fifteen-day rule! When we began this project, we knew that we would be unable to get historical distance from the...

  13. List of Contributors
    (pp. 565-568)
  14. Index
    (pp. 569-596)