Internet - Business in United States of America

Definition: Worldwide computer network, driven by shared protocols allowing different systems to exchange information

Date: Internet protocols published December, 1974; implemented, January, 1983

Significance: As the Internet has expanded, it has fostered an explosive and self-generating wealth of textual, audio, visual, and multimedia resources that have made possible an exceptional rise in U.S. labor productivity.

At the middle of the twentieth century, computers were large, standalone machines for data processing. If connected, however, their productive capacity increased considerably. During the 1960’s, efficient and economical means for connecting them emerged using packet switching. Designed by scientists in the United States and Great Britain, this method operated in digital rather than analog mode. A distributed system of nodes transmitted messages that a sender broke down into packets of data-bits and a recipient subsequently reassembled.

Within the U.S. Department of Defense, the Advanced Research Projects Agency (ARPA) operated. It funded a project that by the end of 1969 connected four computers at research centers in California and Utah. Named ARPANET, within a decade the project included nearly two hundred hosts in and outside the United States. This network formed the original backbone of the larger network dubbed the Internet. Further increases in size prompted division of the network into “domains,” such as .gov, .edu, .org, and .com. Financial speculation in the latter domain provoked a recession at the end of the twentieth century due to a dot-com bubble.

The most popular feature of ARPANET was its ability to transmit electronic notes or messages, later known as e-mail. Additional networks emerged in the United States and various countries. A commercial network, CompuServe, appeared in 1975 as a publicly traded, timeshare service company. The network was changing fundamentally. From a publicly funded, data-processing operation at specialized institutions, it was becoming a commercial information and communications medium with a mass market.

A new challenge arose, the interconnecting of these networks through an “internetwork.” ARPANET developed a set of transmission and reception protocols for such internetworking, beginning operation in 1983.Whenadapted to “internet” protocols, computers could enter the system and access machines similarly adapted. A vehicle for accessing networked information, “the Internet” came also to mean the totality of this information.

Internet Access and Usage, 2006

Number of adults who

  • Have Internet access at home: 142.1 million 
  • Have Internet access at work: 80.6 million 
  • Used the Internet in the last 30 days at home: 123.1 million 
  • Used the Internet in the last 30 days at work: 69.1 million

Source: Data from the Statistical Abstract of the United States, 2008 (Washington, D.C.: Department of Commerce, Economics and Statistics Administration, Bureau of the Census, Data User Services Division, 2008)

Popular Diffusion

The physical attributes of computers radically changed. From large, hugely expensive machines operated by specialists, they became smaller, relatively less costly, and more amenable to a wider number of users. During the late 1970’s, microcomputers appeared, often as kits for assembly. In 1977, Apple Computer (later known as Apple) launched a desktop computer with a user friendliness that made it widely popular. The iconic form of a “personal” computer emerged: a television monitor set on a processor, operated by an attached typewriter keyboard. To compete with the growing market for microcomputers, International Business Machines (IBM), a behemoth of the old-style machines, marketed its first PC (personal computer) in 1981. 

The creation of smaller computers, inaugurating a radical increase in the number and extent of users and networks, was due to microprocessors. Tiny transistor chips replaced older, cabinet-sized processors. Over three decades, from the early 1970’s, the bit capacity of computers doubled every decade, greatly magnifying operating capacity and radically reducing production costs. Intel was a leading innovator in ever-denser chip capacity. Throughout the 1980’s, computer production, use, and networking achieved a global reach. The IBM-PC supported further networking, because it used an operating system licensed from Microsoft that penetrated most national and international markets. During this period, commercial Internet service providers, such as Netcom and UUNET, appeared.

Global Profusion

Ever smaller devices (laptop, hand-held) at steadily declining prices expanded the number of computers worldwide to over one billion in the first decade of the twenty-first century. Advanced in developed and developing countries, the Internet achieved a global scale, economic impact, and cultural dimension never imagined. The Internet activated a self-generating wealth of textual, audio, visual, and multimedia resources. Its technologies prompted an exceptional rise in U.S. labor productivity. 

A key to this enrichment was the World Wide Web (WWW), released in 1992 by the Geneva-based European Organization for Nuclear Research. Using “markup” language, it created enriched or hypertext documents that embedded various media. Web browsers emerged to find and use such documents. The most prominent browser became Microsoft’s Internet Explorer. Search engines indexed Web content, allowing subject keyword searching. Initially, Yahoo! led in this service. However, in 1998, Google improved “hit” accuracy by tracking frequency of site connections rather than text phrasing. A magnet of advertising revenue, the company capitalized more than a billion dollars in its initial public offering. 

The Defense Department eventually discontinued its connection with the Internet. In 1990, the National Science Foundation Network (NSFNet) replaced ARPANET as the Internet backbone. The administration of the Internet has remained resolutely no centralized and emphatically participatory. Open standards develop via deliberations of the Internet Engineering Task Force (IETF), founded in 1985, which is part of the Internet Society, a professional association. The Internet Assigned Numbers Authority (IANA) is managed under contract from the U.S. Department of Commerce by the Internet Corporation for Assigned Names and Numbers (ICANN). 

Within a quarter century of its beginnings, the Internet was operating throughout the world. Its speed and economy wrought a socioeconomic impact similar to those of automobiles and electricity. Generating exceptional increases in productivity, the Internet became the lifeblood of globalization. From it has arisen a global culture that emphasizes egalitarian, participatory, and enterprising values.

Edward A. Riedinger

Further Reading

  • Abbate, Janet. Inventing the Internet. Cambridge, Mass.: MIT Press, 1999. Narrates technical developments of the Internet and its creators, examining its design and use as a product of varying sociocultural contexts. Includes bibliography. 
  • Burman, Edward. Shift! The Unfolding Internet: Hype, Hope, and History. Hoboken, N.J.: John Wiley & Sons, 2003. Views the creation and application of the Internet within the framework of “paradigm shifts” that result from scientific revolutions. The consequences are as penetrating as the development of aviation, wireless communication, cinema, television, and electricity. 
  • Hillstrom, Kevin. The Internet Revolution. Detroit: Omnigraphics, 2005. Provides a seven-chapter overview of Internet history followed by biographies of principal personalities involved in its technical development and social diffusion. Includes a chronology, illustrations, and bibliography. 
  • Poole, Hilary W., ed. The Internet: A Historical Encyclopedia. Santa Barbara, Calif.: ABC-Clio, 2005. Consists of three volumes comprising, respectively, biographies, issues, and chronology. Includes illustrations, glossary, list of acronyms, and article bibliographies. 
  • Schell, Bernadette H. The Internet and Society: A Reference Handbook. Santa Barbara, Calif.: ABC-Clio, 2007. Reference work with entries on technical, socioeconomic, cultural, political, and legal consequences, issues, and controversies related to the Internet. Includes organizations, case histories, and chronology. 

See also: computer industry; eBay; Bill Gates; NASDAQ; Online marketing; telecommunications industry.

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