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The Growth and Development of Online Commerce: Early Privatization and Commercialization

By Sammy J. Chapman Jr.

Early Privatization and Commercialization

The internet was not conceived as a commercial platform; nevertheless, commerce has become a significant activity there. Several works chart the path of the internet, from a military research project to a privatized tool for commerce. In How the Internet Became Commercial, Shane Greenstein asserts that a rare combination of events—chiefly government policies, economic incentives, and rapid adoption—led to the commercialization of the internet. Another important history of the early internet is Jante Abbate’s Inventing the Internet, which lays out the history of early government networks before they formed what we now refer to as the internet. Abbate’s book focuses on the cultural and social factors within government agencies that led to its development. Abbate explains that although diverse groups and networks that predated the internet had conflicting objectives, they were able to come together to agree on standards that allowed for its creation of the internet. While Abbate focuses on agencies and nations, A History of the Internet and the Digital Future, by Johnny Ryan, focuses more on the leaders of these organizations. Ryan’s conclusions suggest that through the overarching goals of leaders such as J. C. R. Licklider and Vint Cerf, the internet moved from a centralized command and control network to a network that was user driven and open, thus becoming a centrifugal force within society.

Entrepreneurship is a popular theme among many books on the early days of the internet. Pelkey, Russell, and Robbins’s Circuits, Packets, and Protocols: Entrepreneurs and Computer Communications, 1968–1988 explores the initial boundaries between markets and governments. This work is based on a collection of oral histories of technologists and the founders of networking equipment and data communications companies. Taking a broader scope, Thomas Streeter’s The Net Effect: Romanticism, Capitalism, and the Internet is a cultural history of the development of the internet. In the author’s opinion, today’s internet results from the cultural beliefs that America possessed during the development of the personal computer and computer communications technologies from the 1950s to 1990s, showing some similarities to Ryan’s analysis. Streeter argues that the computer shifted away from being a purely scientific tool in the 1950s to a more romanticized mode of self-expression and rebellion in the 1990s. Along with the romanticism of the microcomputer during this period was the rise of neoliberalism during the 1980s. The personal computer played an important role in the entrepreneurial narrative of that decade, which gave networked computers both political and economic meanings.

While much of the history of the internet focuses on events in the United States, some writings highlight the early internet in other parts of the globe. Even before any internet business or consumer commerce activities occurred in the United States, France and the United Kingdom had established digital communication systems that connected directly to consumers’ homes, which could be used for news, communication, and commerce. Three books detail these approaches: Michael Aldrich’s Videotex, Key to the Wired City, Mailland and Driscoll’s Minitel: Welcome to the Internet, and editors Goggin and McLelland’s The Routledge Companion to Global Internet Histories. In the United Kingdom, the system was called Prestel, which the UK Post Office Telecommunications developed during the 1970s and launched in 1979. The government saw this system as beneficial for citizens and private enterprises because it promoted economic and job growth and a better-informed citizenry. Videotex, Key to the Wired City details the videotex technology that made Prestel interactive and allowed citizens to purchase items through the system. Prescient in its discussion of the applications of digital networks, this book offers some of the earliest writings on e-commerce, working from home, and electronic office applications. In France, the digital communication was called Minitel, and it was very popular from the mid-1980s until the early 1990s. Minitel had more users than either CompuServe or America Online. Minitel: Welcome to the Internet chronicles the many innovations in France that were far ahead of the United States during the 1980s. Online banking, grocery delivery, and advertising were already daily activities on Minitel. This work also offers an analysis of Minitel as a platform, allowing comparisons to modern internet platforms such as Amazon, eBay, and Facebook. The Routledge Companion to Global Internet Histories offers many cross-country comparisons of how the internet evolved in different regions around the world.

Reading these histories, one becomes aware that government policies and culture are significant determinants of internet development. Parallel to the events in France and the UK in the 1980s, the internet developed in a different fashion in the United States with the adoption of home microcomputers, which connected small decentralized groups. The development of these Bulletin Board Systems (BBS) is detailed in Kevin Driscoll’s The Modem World: A Prehistory of Social Media. Passionate hobbyists created BBS in decentralized local groups—very different from Minitel, with its strong centralized structure. However, some of the same activities found on Minitel occurred on BBS, including shareware distribution, which made money for many early independent software developers.

Privatization came quickly to the internet. In Profit Over Privacy: How Surveillance Advertising Conquered the Internet, Matthew Crain goes down a path of analysis similar to Ryan’s to show how government policy was a handmaid to private sector interests during the birth of the internet. The general belief was that the private sector should take the lead in developing the internet. This resulted in lax regulation and the government’s lack of interest in developing data protection laws and internet advertising markets. Nikos Smyrnaios’s Internet Oligopoly: The Corporate Takeover of Our Digital World looks at political policies, such as deregulation and neoliberalism, that were popular during the formation and early growth of the internet during the 1980s and 1990s. The author traces the internet from ARPANET to the current internet oligopoly, which controls the internet. The author points to several ideas that were percolating in society during this time, such as the information society, the postindustrial economy, and the “New Economy.” These ideas help to create the current internet oligopoly.

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