Online Business History In a Nutshell – Part 1/2

Can you imagine your life without Dropbox, cloud storage, email or online business as a whole? Eight years ago you could.

We live in a fast-changing world, and we’re bombarded by tons of information each day. We communicate with people from all around the world instantly, discoveries and tech progress seem to happen faster than ever, and all this because of the internet. In this fast paced world there are things we take for granted such as Facebook or Instagram, but we sometimes forget that not too long ago they did not exist.  

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This article is a brief two-part history of the online business environment. It can be an interesting read, but it might also help you connect the dots so you can become the next Zuckerberg. So let’s see how the Internet got to where it is today.

online business

The Beginning (1962 -1989)

Active Websites by 1989: 0

Active Internet Users: 0

J.C.R. Licklider, from MIT, was the first to mention social interactions over a network. In 1962 he sent memos, discussing the idea of a “Galactic Network”. He wanted users to access any information through connected computers. In October 1962, he was spearheading the computer research program at DARPA.

In 1966, Lawrence G Roberts, a researcher at MIT, became convinced of Licklider’s concept.  He went to DARPA to create the first version of the internet called ARPAnet.

Designed for use on university campuses, ARPAnet proved the efficiency of network data transfers. By the 1970’s the network had enough computers connected, that researchers started developing applications.

There was still a long way to go, however, before the internet as we know it would emerge. Before the World Wide Web project came online, Electronic Data Interchange (EDI) was the next big thing. This platform replaced document exchange processes such as mailing and faxing. One of the most notable uses of EDI was at the Heathrow Airport, London, UK, in 1971. The system allowed agents to input information directly into the Customs processing system. This reduced the time needed to manually process paperwork. EDI allowed the transfer of data quickly and efficiently without human intervention.

It wasn’t until eight years later, in 1979 when the first online business was created by Michael Aldrich, an English inventor, and entrepreneur. He modified an ordinary TV and connected it via a telephone line to a computer enabled shop. Aldrich named the invention “teleshopping”, thus establishing the first ever form of e-commerce.

online business

First Steps (1990 – 1999)

Active Websites by 1999: 3,177,453

Active Internet Users: 280,866,670

The internet we know and use today was created by Tim Berners-Lee, a former employee of CERN. In 1990, along with his friend Robert Caillau, he proposed the creation of the “World Wide Web”. Later that year he created the first web server and hand-coded the first browser.  Soon after that, he made the Internet publicly available on August 6, 1991. The next advancements he made were developing URL, HTML, and HTTP.

The first version of the Internet looked very different than what we have today. It was just a series of text documents bound together by links.

The use of E-commerce was blocked on the internet at first. The National Science Foundation considered it hazardous for internet users to engage in online business over the network. In 1991, however, the ban was lifted, and unprecedented growth followed.

By 1995, NSF began charging a fee for registering domain names. At the time, only 120.000 domains were registered. In three years time, that number would grow to over 2 million. The NSF had realized, at that point, that it had lost control over the internet.

For many industry experts, E-commerce represented a new frontier. It made reaching and convincing customers to spend money on wares and services an easy task. That possibility soon became reality when Netscape adopted Secure Socket Layers (SSL) in 1994. This protocol encrypted user data and allowed transactions to be made online without exposing sensitive information. Browsers reinforced the technology, given that they could detect if sites had SSL certificates, thus establishing trustworthiness to potential buyers.

To this day, SSL is one of the most powerful internet security protocols out there. It has become a vital and integral part of the online community and businesses.

online business

The Bubble (2000 – 2004)

Active Websites by 2004: 51,611,646

Active Internet Users: 910,060,180

Known as the Dot-Com Bubble, it was created by investors over-spending on the stock market. The name comes from the popular “.com” that followed the names of the businesses.

In ten years from conception, the Internet was gaining new users at mind-blowing speed. From 2,738 users in 1995, it had gone to over 17 million by the year 2000. Given this huge growth, wild speculation and investing took place. The business possibilities this new and fast growing market provided drew in many eager investors. The hype and novelty of what was going on caused them to throw caution and business strategy to the wind.

The bubble eventually popped in 2001, as many businesses and investors went bankrupt. The early 2000s saw an economic recession, after trillions of dollars were lost. The main reason for the outcome was prioritizing growth over profit. Businesses presumed that by just increasing their customer base, they would turn a profit. The result was an all-out war for the domination of the market for specific products and services.  

Join us tomorrow to find out how today’s E-commerce giants managed to find a way out of the aftermath of the bubble. Part two of the article will also cover what you should expect to see in the near future as business on the internet

Until then, tell us in the comment section below what you found most interesting about this article.

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