A significant part of the prosperity of the 1990s came from new technologies such as cellular phones and genetic engineering. But the most important was the development of a revolutionary form of communication: the Internet. Developed in the 1970s by U. S. military and academic institutions to coordinate research, the Internet initially proved an awkward means of linking information. Data in one computer did not readily relate to that elsewhere. The Internet was a communication system that lacked a common language.
That was remedied in the early 1990s by Tim Berners-Lee, a British physicist working at a research institute in Switzerland. He devised the software that became the grammar—the “protocols”—of the Internet “language.” With this language, the Internet became the World Wide Web (WWW), a conduit for a stream of electronic impulses flowing among hundreds of millions of computers.
The number of Web sites increased exponentially. In 1995 Bill Gates’s Microsoft entered the picture with its Windows operating system, which made the computer easy to use. It created a Web browser— Microsoft Internet Explorer—and embedded its software in the Windows 95 bundle. This provoked howls of protest from Netscape as well as from other service providers: America Online, CompuServe, and Prodigy. Microsoft, they complained, was threatening to monopolize access to and use of the Internet. (A federal judge concurred, ordering that Microsoft be broken up; his ruling was overturned on appeal in 2001.)
In the meantime, Jeff Bezos dreamed of using the Internet to sell books. In 1995 his company, Amazon. com, sold its first book. Within six years, its annual sales approached $3 billion. Bezos became one of the richest men in the nation.
If Bezos could use the Web for selling books, others imagined they could sell everything from pet food to pornography (eBay, an Internet auction house, had an online catalog consisting of three million items). Many start-up companies (dot-coms, in the slang of the day) consisted of little more than the hopes of the founders. “Venture capitalists,” independent investors seeking to fund emerging “tech” companies, sensed a glittering new economic frontier somewhere down the Internet superhighway, and they poured billions into start-up dot-coms. In 1999 some 200 Internet companies “went public,” selling shares in the major stock exchanges. They raised $20 billion easily. The prices of dot-com stocks kept on climbing though few generated profits; some lacked any revenue whatsoever.
In the spring of 2000, with the stock market still surging, a selling wave hit the tech stocks and spilled over to other companies. Stock prices plummeted. In all, some $2 trillion in stock funds disappeared. As the 2000 election approached, many feared that the economy was nearing a recession.
World History
