How the Internet Happened: From Netscape to the iPhone

by Brian McCullough

Bill Gross had stumbled upon one of the greatest advertising models in the history of the world. Paid search represents a uniquely powerful nexus point for advertisers to insert themselves into.

An important component of this entire process was the ability to “pay per click” —as opposed to paying based on the number of people who (theoretically) viewed your ad, as every other online advertiser did in the dot-com era. This was the second key innovation: with the GoTo model, an advertiser only “paid for performance.” If no one clicked on your ad, you paid nothing.

It’s not an exaggeration to say that Overture and paid search saved the portals and the search industry in general. Lucky for Google, there was now a very lucrative new advertising model it could copy, and what was more, this new form of ad had proven the immense value of search, Google’s crown jewel.

The new version of AdWords had advertisers bid against competitors’ ads, but Google’s system was not strictly pay-for-placement. Ever enamored with math and the power of algorithms, Google introduced an important new ranking factor for the ads that it called a “Quality Score.” In essence, Google’s system took into account how often that ad was actually clicked on, in addition to how much an advertiser was willing to pay per click.

This prevented deep-pocketed but ultimately irrelevant advertisers from dominating every keyword. You could no longer guarantee to rank high just by being willing to pay the most. Your ad also had to be clicked on the most in order to rise up the rankings. Successful advertisers paid less per click, but ranked higher.

From a searcher’s perspective, the ads felt less annoying the more relevant they became. To a certain extent, Google’s AdWords began to seem almost as useful as the organic search results for certain keywords, because the quality score kept them germane to the searcher’s original query.

Overnight, Google’s fortunes were transformed. Led by a new hire named Sheryl Sandberg (later, more famous for her leading role at Facebook), AdWords became the blockbuster success that Google had been looking for all along. It helped considerably that Google had what Overture didn’t: its own highly trafficked search destination.

The web and the Internet itself are now so big that without decent search, it’s easy to imagine that the whole edifice would have collapsed under its own complexity by now. But by improving on Overture’s pioneering work with paid links, Google was able to achieve something just as amazing: it made the Internet profitable at scale and for the first time. Paid search would prove to be the greatest advertising engine yet devised by man. Furthermore, algorithmically served ads would support nearly every product Google would release subsequently: Image Search, Google News, Gmail, Google Maps, Google Books.

This digital economy didn’t just flower on the marketing side of the equation, because Google had developed a way to monetize content as well. This was AdSense, which Google launched soon after AdWords. Google engineers dreamed up ways to syndicate text ads not just to major search sites and portals, but to the entire web itself. “The idea of putting ads on nonsearch pages had been floating around here for a long time,” Google executive Susan Wojcicki said later. Google already had basically the entire web in its index, so if it could find a way to match relevant ads to the content on other people’s web pages (just as it had matched relevant ads to search queries), Google could, in Wojcicki’s words, “change the economics of the web. You do the content and leave the selling of the ads to Google.”

Cunningham installed a subpage on the site called WikiWikiWeb. The “wiki” (the term came from the Hawaiian word for “quick”) constituted a series of pages that could be edited by any user. So, a given user might post some code patterns to the wiki, and another user might come behind him and add to those patterns, change them, even completely replace them. But all edits were stored, and the page could revert to previous versions if any user chose to do so. It seems counterintuitive that such a system could work, but Cunningham learned that, given enough input from enough interested users, his Wiki system worked quite well. Cunningham is famous for coining “Cunningham’s Law,” which finds that “the best way to get the right answer on the Internet is not to ask a question, it’s to post the wrong answer.”

In frustration, on January 10, 2001, Wales installed a descendant of Cunningham’s original wiki software on Nupedia’s server. This “Wikipedia” was merely intended as a separate feeder service to speed up the Nupedia submissions process. Articles would be collectively written and edited on Wikipedia, then fed into the existing peer-review editing process. Almost immediately, however, Wikipedia overtook Nupedia not just in the quantity of articles that were created, but in the quality as well. The first article created, on January 15, was on the letter “U” and investigated the origins and usage of the twenty-first letter of the English alphabet.6 It was comprehensive, it was well written, and it was—to the surprise of Wales and his team of editors—accurate.

Wikipedia was often accurate and authoritative in near-real time, and it had the infinite space and resources of the Internet to play with, so it could serve what became known as the “long-tail” of content.

Wales instead made the site into a nonprofit enterprise. To this day, it is supported by contributions from the public and is thereby an open-source counterweight to the proprietary “answer engine” that is Google.

YouTube was fortunate in its timing. By 2005, broadband Internet adoption continued to increase, and consumer video cameras were becoming common. Even some cell phones allowed you to shoot video by the time YouTube launched.

It was the “share-yourself, share-anything!” ethos of the moment combined with the ubiquitous distribution platform of the web that led to what we now call “virality.”

It turned out that Google made one simple calculation when it purchased YouTube: in the broadband era, video was likely to become as ubiquitous on the web as text and pictures had always been. YouTube was already, in essence, the world’s largest search engine for video. In fact, it would eventually become the second-most-used search engine, period. With its stated mission to organize all the world’s information, Google simply couldn’t let video search fall outside its purview. Google was able to come up with sophisticated automated systems that quickly and efficiently took down copyrighted videos when the rights holders alerted them.

This staggered growth also allowed the company to expand within its financial means. In true Web 2.0 fashion, Thefacebook was run frugally, using free open-source software like MySQL for the database and Apache for the web servers. Even by the time users were in the tens of thousands and Thefacebook was live on dozens of campuses, it was only costing $450 a month to run the site off of five Manage.com servers.

Whether by accident or design, the self-enforced exclusivity of focusing on colleges was key to Thefacebook’s early success. We are never more social than we are in college; our network of friends and connections is never more vibrant and vital than in those years.

Thefacebook was only fifteen months old, but had gotten one of the richest private valuations in Silicon Valley history.

Again, Facebook didn’t invent tagging. It was one of those big ideas floating around the Web 2.0 zeitgeist. But combining tagging of photos with Facebook’s unique network of real social connections proved impossibly potent. We’re monkeys that like to talk to each other—that like to see and be seen. When someone tagged you in a photo, how could you help but look? Again, the primary way Zuckerberg measured the success of Facebook was by monitoring how often users returned, and how much they clicked on when they did so.

Users seemed to be most interested in learning what was new. Heck, every time a user simply changed their profile picture, Facebook’s engineers could see in the logs that that led to an average of twenty-five new pageviews.61 If Facebook’s key value proposition was the ability to find out what was up with your loved ones, then maybe they could design a better delivery system for this information. This would become the News Feed. Again, the News Feed built on ideas that were already out there. Every user’s profile page would function as a glorified RSS feed, and the News Feed would collect all the updates, photos and status changes that your friends made in one central place—just like a feed reader collected blog posts. You wouldn’t have to visit profile page after profile page individually, you could just log in and Facebook would tell you what was new.

But the News Feed was never shut down, even temporarily, because, again, Zuckerberg was watching user behavior and, despite the ruckus, he could see that people were actually using the News Feed as he had intended. In August, before the News Feed, Facebook users viewed 12 billion pages. In October, après News Feed, pageviews were 22 billion.66 People might claim to hate the feature, but Zuckerberg could see they couldn’t stop using

OPEN REGISTRATION WAS LAUNCHED on September 26, 2006, mere weeks after the News Feed debacle. Prior to open registration, new users were joining at a rate of about 20,000 a day. A few weeks after opening up Facebook to everyone, that number had changed to 50,000 a day, and rising.71 Growth in Facebook’s user numbers began to look like a hockey stick going only steeply upward. Over the next year, Facebook would rocket past 25 million registered users, and around 6 million of those would be older-than-college-age users; 200,000 of those would even be people over age sixty-five.72 If you were a postcollege adult during this period, you might remember this moment. One day, Facebook was just a thing you had heard of. The next day, everyone you knew was on it. Some day after that, your mother and even your grandmother were members.

After open registration, the social-networking wars were over. Myspace, and every other social network, would become distant memories.

But in this burgeoning world of electronic devices that were competing for room in your pocket, there was only one undisputed king: the cell phone. Other devices might be able to capture the imagination of certain market segments, but cell phones were seemingly for everyone. There were 100 million cell phone users worldwide as early as 1995. By 2001, that number surpassed 1 billion.

The entire computer, electronics and technology industry was converging on one singular device, one transcendent product that would seemingly be everything to everybody. And yet, few people seemed to care. All of these new features, all of these new technologies and computing innovations were converging inside the cell phone, pointing to a world of always-on, always-connected, always-updating information,

Wary of working with the carriers directly, but looking to protect the iPod/iTunes franchise, Apple dipped its toe into the cellular waters by partnering with one of the existing handset makers, Motorola, in early 2004. Apple would merely license the iTunes software, while Motorola would design the hardware, and—most important—deal with the carriers.

But instead of producing a music-enabled RAZR, Motorola ended up delivering the clunky ROKR. Motorola took eighteen months to deliver this candy bar–style device and it was fatally, almost ridiculously, flawed. It reeked of a handset that was designed by committee, something antithetical to everything Apple stood for. It could hold only one hundred songs, making it the most limited MP3 player Apple had a hand in producing. Within a month of going on sale, customers were returning the ROKR at six times the industry average for a cell phone.

But as straightforward as the concept was, iPod+phone simply didn’t pan out in real-world use cases. The problem was that the iPod’s vaunted click wheel—while a brilliant user interface breakthrough when selecting songs from a list of albums—was not ideal for dialing a phone, much less inputting things like text messages. “We were having a lot of problems using the wheel. . . . It was cumbersome,”

In the Steve Jobs era of Apple, focus groups and user testing were superfluous. Only one person (Jobs, of course) decided whether products were worth producing or not.

The group was more interested in the sort of computer wizardry that had been shown off in the recent sci-fi film Minority Report. Gestural input, waving your hands around to manipulate data, etc. The group became fascinated with technology from a small Delaware technology company called FingerWorks. FingerWorks produced a plastic touchpad that allowed users to interact with data directly, in a manual, tactile way, using what was known as multitouch finger tracking.

But every so often, ideas that Steve Jobs dismissed at first could grow on him over time. One day’s stupid idea could become tomorrow’s brilliant breakthrough. “As far as I know,” says Brian Huppi, one of the engineers responsible for the Jumbotron, “Jony showed him the demo of multitouch and then it was clicking in his mind. . . . Steve does this, you know: He comes back later and it’s his idea.”21 The idea clicking in Steve’s mind was the notion that somehow the multitouch technology could be used to solve the phone problem.

But in late 2004, the word came down from Jobs officially: “We’re gonna do a phone. There’s gonna be no buttons. Just a touchscreen.”23 Apple purchased FingerWorks for the multitouch technology, and soon the phone project was split into two competing tracks. P1 (shortening the Purple designation) became the code name for the existing iPod+Phone version. P2 became this new, multitouch, shrunk-down tablet idea.

An Apple UI whiz named Bas Ording came up with the famous rubber band effect, whereby the screen would seem to bounce when a user scrolled to the bottom.

In technology parlance, dogfooding is when you test your beta product yourself, eating your own dogfood, as it were, in order to work out the bugs. Apple engineers were instructed to live on their iPhones exclusively, to catch bugs in every possible use case.

To make sure the screen turned off when a user pressed it to her face to answer a call, a proximity sensor was embedded. The problem of the phone accidentally turning on in a user’s pocket was solved when a UI designer noticed the sliding lock and unlock mechanism on airplane bathroom doors. Thus, “slide to unlock” was born.

But the biggest headache, until late in the development period, remained the functionality of the software keyboard. The problem was finger size. If you tried to type, say, the letter “e,” your finger might trigger a range of other letters instead. The solution, as ever, came from clever design. Apple engineers used artificial intelligence techniques to create an algorithm that would predict which letter a user might want to type next. For example, if someone types the letter “t,” there is a very high probability that they will want to type “h” next. So, the letter “h” would, to the naked eye, look like it stayed the same size on the keyboard when, in fact, the “hit area” for the letter h would get bigger.

Jobs rehearsed his presentation for six solid days, but at the final hour, the team still couldn’t get the phone to behave through an entire run-through.

IT WAS THE APP STORE that inspired users to adopt smartphones and make them mainstream.

But more than anything else, we have to credit the App Store for turning the smartphone from a niche category that only appealed to early adopters and on-the-go professionals into a universal computer that appealed to everyone and their mother.

But if we’re being entirely honest, there’s one specific category of app that was crucial to the iPhone taking off when previous smartphones didn’t. One of the key launch apps on the first day the App Store went live? Facebook. Social networks succeeded in making the Internet truly a personal experience. Smartphones, combined with social networks, took personal computing and made it almost intimate computing. Where would social media be without mobile computing, without smartphones: the perfect tools, always on hand to record and organize the ephemera of our daily lives? Would Facebook be at a billion users today if smartphones, in the example of iPhone, hadn’t presented the perfect vehicle for social media consumption and production? And if not for the iPhone kick-starting the smartphone revolution, whither Snapchat? Or Twitter? Much less, Uber?

And a complementary argument could be made in reverse: that the iPhone took off when other smartphones hadn’t because it arrived on the scene just when Facebook was going parabolic.

Licklider, however, put his money on cybernetics, the idea that man would meld with machine.

First, we connected all the world’s computers together. Then, we uploaded all of humanity’s collected knowledge into the virtual space that networks created. Then, we made all of that knowledge searchable. We tied our commerce systems, our financial systems, even our media and information systems, to the network. We created a world where any good, any piece of media, any piece of art, any fact or thought, any idea or meme, is available, on call, for the instant gratification of any curiosity or desire. Over the course of a decade, we learned how to behave, and then to actually live with this new networked paradigm—to actually exist in this virtual environment. With social media, we connected ourselves together just as comprehensively as we had connected all the computers. And then, we started wearing actual supercomputers on our bodies, taking them with us at every waking moment of our days, to navigate, not only the intellectual, the social, but even the physical space of modern life. And we did all this unbidden, undirected, unplanned—almost as if we were following a biological impulse, guided by some unconscious evolutionary imperative.