How the Internet Happened: From Netscape to the iPhone

by Brian McCullough

They wanted computers that responded to them directly, without intermediaries. They wanted personal computing. And so, they made it happen. Steve Jobs, Steve Wozniak, Bill Gates, the Homebrew Computer Club—the hobbyists created the personal computer category (originally, they were called microcomputers) and thus, the PC Industry.

In the era of the command line, you almost needed to have read the manual cover-to-cover or have previously mastered a computer language even to use the damn things. You had to know how to use a computer before you could use a computer. This problem was solved by the invention of the GUI, or graphical user interface. Computers were humanized by graphics, by colors, by friendly icons and drop-down menus and a cute little tool called a mouse. Now when you sat in front of a computer, you could grab the mouse and just—click. You didn’t have to know anything beforehand. You could learn how to use the machine by using it. Invented by Xerox, popularized by Apple Computers and the Macintosh, and then mainstreamed by Microsoft and its Windows operating system, the GUI was the evolutionary leap that would eventually make computers friendly to the average user.

THE INTERNET, AND ESPECIALLY the World Wide Web, finally brought computers into the mainstream. The Internet is the reason that computers actually became useful for the average person. The Internet is the thing that made a computer something you check in with daily, even hourly. And that is what this book is about: how the web and the Internet allowed computers to infiltrate our everyday lives.

Computers were first hooked together in a meaningful way in 1969. This was the ARPANET, the grandfather of the Internet,

The ARPANET was a blue-sky research project that, ostensibly, would allow for greater (and more resilient) communications among decision-makers during a nuclear strike.

The ARPANET evolved into the Internet we recognize today not as a populist or mass-market communications system, but as an electronic playground where a priesthood of academics could play and exchange ideas.

The Internet, in short, needed its own GUI revolution, that application/user interface innovation that would make the Internet user-friendly just as the graphical user interface had done with computing itself. The World Wide Web arrived just at the right time, and provided this exact paradigm shift just when it was needed.

It is well known that Tim Berners-Lee invented the web while he was employed at CERN, the great multinational scientific research institution in Switzerland. As the Internet was born in the midst of a great scientific effort to win the Cold War, the web was born in the midst of a great scientific effort to reveal the secrets of the Big Bang.

Berners-Lee himself had coded the first browser back when he had invented the web. But, as a part of his new crowdsourcing efforts, he had thrown the door open to anyone who wanted to try their hand at coding a better one. Dozens of developers around the world accepted the invitation, and several of them turned out to be students around the same age as Andreessen.

By the end of 1994, it was clear that the World Wide Web was rapidly taking over the Internet at large. For the millions of Mosaic users, the web almost was the Internet. But then, those millions of users were not exclusively the academics and researchers the web had been designed for. Increasingly, they were also home computer users; business computer users; the uninitiated; the uninvited; the riffraff. Mosaic had become the most successful project in computer science by leaving the computer scientists behind and appealing to the mainstream.

This is only the obvious path to modern minds because of the “something else” that Marc Andreessen would do in 1994: cofound Netscape, the first true Internet company, the first real “dot-com.” At the time, there was no template for Marc Andreessen to do a web startup, because Marc Andreessen hadn’t created that template yet.

Thanks to the Internet, users could download your product, give you feedback on it, and you could release an update, all in the same day. In the web world, development schedules could be measured in weeks. It was this new paradigm for product development, more than anything else, that was Netscape’s first contribution to the modern idea of “a startup.”

Throughout the Internet Era, company after company would become obsessed with the idea of creating or owning a platform. If you are a platform, you can create an ecosystem of developers and software and apps all dependent on the underlying platform. To own a platform is to own the ball field, the rule book, the turnstiles, and the broadcast rights.

The final question was an important one: how to make money? Andreessen and Clark eventually settled on a seemingly radical strategy: the product would be free. Well, in a winking, knowing sort of way. Upon release, the web browser would be available for anyone to download so-called beta versions (“beta” means an early version of the software; a work in progress). However, if you wanted to own the standard version of the software—the final one, with all the bells and whistles and customer support—it would cost $39. (Even this was fungible. Anyone would be able to download the full version of the software on a trial basis for ninety days. After that, you were supposed to pay up.)

The idea was to hook users on the free beta version, and then to ask them to pay up for the finalized product, a “pro” version. If corporations wanted to get into the act, they would have to pay up—to the tune of thousands of dollars—for the servers to make the web work within their organizations. Being free would help the browser gain market share, which was the sine qua non of his platform strategy.

Netscape Navigator was a generational improvement over the other browsers then available. Navigator was fast, even working under the constraints of the slow modem speeds that were standard at the time. By some measurements, Navigator could load a webpage ten times faster than Mosaic.

Where were these sales calls coming from? Well, corporate America, just as Marc Andreessen had hoped. The “sort of free” strategy backed up by official licenses was paying off.

Another key enabler of the Netscape IPO was the fact that Wall Street was buying into Marc Andreessen’s platform strategy. The investing community believed Navigator was building a platform on the web, and therefore, Netscape could become the next Microsoft.

TVs were going to become interactive. More than a decade before our phones got “smart,” the tech gurus and the big-money guys were convinced that televisions would become “smart” and that would be the innovation that would really change everything.The

He simply could not envision that computer networks would be able to deliver this anytime soon. And even if they could, “you’re not going to watch television on a little monitor. You’re going to watch it on a big set. That’s what you’ll use when you want entertainment, and you’ll use the PC and keyboard when text is more important.”

Gates was not alone in chasing this interactive television dream. If you read business and technology magazines from the period, all the way through the summer of 1995, the articles were all about the information superhighway, the convergence of telephony, television and computing, and which corporate conglomerate would come out on top.

Once all the kinks were worked out, Microsoft would swoop in and overlay its next-era platform on top of everything and take a generous cut for doing so. It was a strategy that had worked for Microsoft time and again in the 1980s: let others do the hard work of proving a market, then come in and dominate it once the dust had settled. Various industry estimates said that true broadband wouldn’t become common in North America until the turn of the century (an accurate prediction, as it turned out.) Gates believed he had time to wait.

It all came down to this: no one in tech, no one in media, no one from Bill Gates to Jerry Levin to Hollywood ubermogul Barry Diller had realized what Marc Andreessen and Jim Clark had realized: the information superhighway was already here. The Internet and the World Wide Web were the information superhighway. The revolution was now, and it was being delivered not by the television, but by the computer.

What Gates missed most crucially was how the latest iteration of the Internet, the World Wide Web, was different. It was, in fact, more user-friendly, and more robust than anyone realized at the time. Gates simply missed that the Internet had undergone the equivalent to the personal computer/GUI revolution that Microsoft itself had delivered in computing. The web could deliver on all of the promises of the information superhighway,

The web, by contrast, allowed users to consume content, and create it. Any user. Anywhere. Any kind of content. And anyone could do so outside the control of a major media corporation or gatekeepers like the cable companies or Microsoft.

To Gates’s mind, the biggest question of all was how Microsoft could make money on the Internet. Seemingly everything on the Internet was free. This was not a small point to overlook. Gates could see how Microsoft could make money on the information superhighway, by serving as the gatekeeper and toll collector. But the freeware, ungoverned, unsettled Internet didn’t seem to offer a similar opportunity.

So, Microsoft did what it had to do: it cut corners. Having lost BookLink to AOL and having been rebuffed so arrogantly by Netscape, Microsoft was forced to turn to the most logical remaining choice: Spyglass, Inc., the company approved by the University of Illinois to commercialize the original Mosaic web browser.

Bill Gates had one more favorite trick up his sleeve to level the playing field quickly. On its release in August 1995, Microsoft announced that Internet Explorer would be free. Not kinda-sorta free, wink-wink free, like Navigator was. But 100% free to anyone and everyone, even corporate users.

The intention was to bundle Internet Explorer as a component of Windows 95. Microsoft wanted users to think of Internet Explorer as a core function of Windows.

Having Internet Explorer piggyback on Windows 95 was therefore a powerful strategic move. The Internet was still very young, and plenty of users would encounter it for the first time via Windows 95. The first versions of Internet Explorer were not very well reviewed, and compared poorly to Netscape Navigator when it came to features and performance. But Internet Explorer was right there automatically on every Windows machine. To get a copy of Navigator, conversely, you had to search it out and download and install it yourself—not an easy feat for Internet newbies.

For millions of Americans, their aol.com address was their first experience with email, and thus, their first introduction to the myriad ways that networked computing could change their lives. Suddenly, you didn’t have to exchange letters or phone calls with relatives across the country. When you wanted to say something to a distant loved one, you could just shoot them an email. And it was free!

AOL was where Americans first wrestled with concepts of anonymity and identity in an online world. All of those dirty chatters on AOL chat rooms were at the vanguard of learning what it was like to live life in cyberspace.

“We didn’t trust Microsoft’s motives, because we knew they could emerge as a major competitor,” Case later said.

Selling consumers on the virtue of one online service over another was not as important as educating consumers on just what an online service was.

But then came Windows 95 and the MSN service that launched with it. The outlook for AOL seemed precarious.

“The fact that Microsoft has an 85 percent market share . . . and wants to hardwire their own service into it in an anticompetitive way is not a good thing,”

And then came the deal to make Internet Explorer the default browser for AOL users. After that, both AOL and the market at large knew that Microsoft’s heart wasn’t really in the online services business. Bill Gates had ceded de facto control of online services to AOL. If Microsoft wanted to neuter its own online offering, who was Steve Case to look a gift horse in the mouth?

The Internet itself hadn’t crashed, but America’s ability to access it had.

The hourly fee structure was unsustainable. MSN announced in October of 1996 that it would provide unlimited access to its service for $19.95 a month, copying the business models of the independents. AOL had no choice but to follow suit. Starting with the December 1996 billing period, AOL announced that it would switch all of its users over to unlimited usage plans for the price of $19.95 a month.

The very first day that user accounts were switched to “unlimited” pricing, member sessions leapt from 1.6 million hours to 2.5 million hours.

The entrepreneur and venture capitalist Chris Dixon has remarked that “the next big thing always starts out dismissed as a ‘toy.’

Simply by virtue of being a pioneer, and almost in spite of its own dysfunction, Pathfinder achieved a considerable degree of success in terms of audience.12 But it was also a huge money loser just as the Full Service Network had been.

Wired didn’t foresee that the digital revolution it was hawking would take the form of the World Wide Web any more than Bill Gates did. Once the web began happening, however, Wired quickly became a vocal cheerleader and tried to embrace the new platform in deed, not just in rhetoric.

Wired was a magazine flush with success primarily as an advertiser-supported operation, so, the HotWired brain trust logically turned to the notion of merely replicating the model they already knew. It was decided that HotWired’s launch on the web would be sponsored by advertisers Wired had existing relationships with from the print side of its operation.

These would be the very first banner ads.

The first banner ads got click-through rates in astronomical percentages. “People just clicked on anything to see what might lead them somewhere,” Joe McCambley says. “It bordered between the high 70s and low 80s* [in terms of click-through percentages] for about 2–3 weeks.”

To this day, most of what we do online, with the exception of ecommerce and the rare subscription service, is all advertising-supported. It’s conceptually jarring to realize that a medium and an industry that we think of as being so futuristic and technological is sustained by a business model that is centuries old. But then, one of the very first things that the web disrupted was advertising itself, because the Internet and the web promised to revolutionize advertising in ways that marketers had only dreamed of previously.

You can pay for an ad in a magazine, but you’ll never know how many readers actually flip to that page and see the ad. And if a reader does flip to the page, how do you know if he or she actually reads the ad?

Online advertising promised to make this vague science obsolete. Because a computer serves up webpages, on the web it is possible to know the exact number of times a web page—and with it, a given advertisement—is delivered to an audience. No more guesswork.

Beyond even this, there are the cookies, those little lines of software code that follow you around the Internet once you visit a website or click on a web ad. Cookies were first developed by Netscape’s Lou Montulli and included in the first versions of the Navigator browser. Cookies were originally intended to add “memory” to the web, allowing users to remain logged in to sites and to refresh content so that they wouldn’t be served the same thing every time they returned.24 But publishers like HotWired latched on to this technology as a way to deliver targeted ads to specific audiences. What users have been frequenting windsurfing websites recently? Cookies can tell you, as well as any advertisers who want to market to windsurfing enthusiasts.