The internet

The rise of the internet is well documented across the internet itself. However, I feel it would be a good start to understand some of the transitions technology has had over the last 50 years in order to get to the data-rich age we live in today. The internet was preceded by the invention and the spread of devices like transistors, the telephone, radio, and computers. An attempt to connect computers to share and broadcast information and collaborate was what led to the internet. It all began with the ARPANET.

The ARPANET

In 1962, J.C.R. Licklider of MIT wrote a series of memos describing the interactions that could happen on a network and termed it the Galactic Network. The other breakthrough in thinking happened when Leonard Kleinrock at MIT, came up with the theory that communication using packets instead of circuits was the way forward. This inspired the work of Lawrence G. Roberts, who developed the plan for ARPANET and published it in 1967. As a result, in 1969, Kleinrock's Network Measurement Center at UCLA hosted the first node on ARPANET. Stanford Research Institute (SRI), UC Santa Barbara and the University of Utah joined the network as subsequent nodes. The first message between the hosts happened between Kleinrock's laboratory and SRI.

ARPANET expanded very quickly as more and more hosts were added to it. However, it was only after Network Control Protocol (NCP) was implemented in 1971-72 that ARPANET users could develop applications. Using NCP, users could access computers remotely and send files. It acted as a transport layer and defined the process to connect two computers. Further reading: https://www.internet-guide.co.uk/NetworkControlProgram.html

The year 1972 was significant as the first email program was launched where users could read, forward, and respond to messages. In the micro-messaging world we have today, emails are primarily used in formal communications. In the history of the internet, however, email was a critical step.

TCP/IP

ARPANET paved the way for communication within a network using packet switching. However, interoperability and connecting to other networks using different technologies happened when the Transmission Control Protocol/Internet Protocol (TCP/IP) was developed by Bob Kahn. TCP/IP as it was called later, has become the bedrock protocol for the internet that we use today. TCP/IP is a specification for how data interactions happen over the internet and how data should be broken into packets, transmitted from the source, and received at the destination. TCP defines how application channels can be created over a network (in this case the internet) and IP provides an identifier or an address for the packets' destination. The following figure describes the architecture of the internet using TCP/IP:

Figure 1: TCP/IP architecture

The Network Layer is where data gets moved in packets across physical wires, cables, or fiber optics. The Internet Layer identifies the host using what we call the IP address, and spots the router closest to the destination. The Transport Layer is responsible for the end-to-end transfer of data irrespective of the underlying network. It also takes care of error handling, flow control, and congestion control to avoid a lot of data being sent through the same router. The Application Layer covers the protocols that we use for applications like emails, file transfers, and websites.

The development and evangelizing of the TCP/IP protocol was a significant phase in the evolution of the internet. ARPANET subsequently moved from NCP to TCP/IP after a few years of planning, and the transition was surprisingly smooth.

In 1989, a British scientist called Tim Berners-Lee came up with the concept of the World Wide Web. This meant Uniform Resource Locators (URL) could be a space to hold information. These URLs could be interlinked and accessed using the internet. By 1990, Tim also came up with HyperText Markup Language (HTML), the language that was the bedrock of the web.

The boom, the bust, and the boom

Several firms incorporated the TCP/IP protocol through the 1980s. However, it was only in the 1990s that the mainstream adoption of the internet took place. Several internet-based businesses started to shape up through the 1990s, and personal computers started to become common place. As the convergence of these two innovations (the internet and PCs) happened through the mid-90s, there was a boom in the internet market. Several firms saw a growth of about 500% in two years' time. For example, AOL (America Online) grew from $70 million at IPO in 1992 to over $150 billion in early 2000.

Thanks to the irrational exuberance of the late 90s, the Venture Capital (VC) industry splurged money into start-ups at will. Valuation models used by these VCs to assess investment opportunities were fundamentally flawed, and in many cases there were no valuation exercises performed. Several firms without sound business models got funding at crazy valuations, resulting in a bubble and a bust (described as follows). This is a classic example of how history repeated itself, as the dot net bubble repeated itself, though at a smaller scale, with the Blockchain/cryptocurrency industry in late 2017/2018. Key events through this boom and bust can be timelined as follows:

The Boom

• Aug 1995: Netscape began trading, marking the launch of the internet era
• Apr 1996: Yahoo went public and saw a doubling up of share price on day 1
• May 1997: Amazon went public and saw a 30% increase in share price on day 1
• Jan 1998: NASDAQ opened the year at 1574.10, registering a two-year gain of 50%
• Sep 1998: Google was founded by Larry Page and Sergey Brin
• Sep 1998: eBay went public and its share price closed at 163% on the opening day
• Mar 2000: NASDAQ hit a peak of 5132.52

The Bust

• Mar 2000: Three days after its peak, NASDAQ lost 4.5%
• Apr 2000: NASDAQ lost 25% of its value in a week and the bubble had burst
• Dec 2000: eBay shares traded at a low of $2.81 (the first day close was at $47.35)
• Dec 2000: NASDAQ ended the year at 2470.52, a 52% loss from its peak in March
• Mar 2001: eToys shares were worthless. The firm exhausted $800 Million in three years and filed for bankruptcy.
• April 2001: TheGlobe.com shares slipped below $1.00, and got delisted from NASDAQ
• Nov 2001: Amazon shares hit a low of $5.51

The Recovery

• Q1 2003: Amazon reported its first annual profits of $35 million
• Aug 2004: Google went public and its shares rose 18% on the opening day

As the sun set on the internet empire in the early 2000s, most firms lost value within weeks. Many firms went bankrupt and investors lost their capital. However, after a painful few years the dust settled. Several of the other internet/technology companies recovered from the dot com bubble burst. However, it was a slow process. Microsoft shares didn't get back to their highs of December 1999 until October 2016. The popping of the dot com bubble identified firms that went on to define the future of computers and the internet. The survivors of the dot come bubble went on to build the framework for what we know today as social media.