21st: No boom, no bust

No boom, no bust: Forget the paranoia. Ignore the Pollyannas. 1997 was the year that reality dawned on the Net. Salon 21st reviews the year in technology and the online world. By Andrew Leonard and Scott Rosenberg.

Published December 24, 1997 8:00PM (EST)

"If the Digital Revolution is accompanied by ways to ensure that everyone has the chance to participate, then it could spark an unprecedented millennial boom, global in scope but empowering to each individual, marked not only by economic growth but also by a spread of knowledge and freedom and true community."

Quick -- which Net-crazed periodical spouted this starry-eyed optimism in its year-end issue: Wired, right? Nope -- that's Time magazine, which, like much of the media this year, started out techno-paranoid ("Computers will burn porn into your kids' retinas while they rip off your credit-card numbers!") and finished off as techno-Pollyanna. Why take a middle road when the extremes are so much more dramatic?

For most of us, though, 1997 was the year in which the Web, the new institution at the heart of the digital revolution, slowed down and settled down. (For more on this counter-intuitive argument, see the accompanying essay.) We finally stopped worrying that the whole thing, with its shaky economics and rickety technology, might just evaporate one morning. We accepted that its promises of deep economic and cultural transformation were not going to happen at T1 speed. We settled in for the more mundane long haul.

Fantasies of boom and bust are both flip sides of the desire to escape the slog through everyday ups and downs. But 1997 reminded us that the logic of history is different from the logic of circuitry: It's not binary. More often than not, reality takes a meandering middle road. These, then, were some of 1997's more memorable twists and turns:

Microsoft |ber alles

Two years ago, Microsoft bashers exulted in criticizing the Redmond, Wash., behemoth for missing the Internet boat. Today, the conventional wisdom is that Microsoft is on the verge of taking over the Internet. Well, maybe not quite -- the Department of Justice may have other plans. But there's no question that 1997 was a big year for Microsoft on the Net: Its free browser, Internet Explorer, continued to chip away at Netscape Navigator's market share, and its Windows NT operating system began making serious inroads in the Web server market. Microsoft also extended its tentacles into cable television with huge investments in leading cable companies, and bought high-flying Internet companies like WebTV. Arrogant, cruising for an antitrust bruising and widely feared, Microsoft demonstrated in 1997 that it still has plenty of world-dominating gusto. (A.L.)

The humbling of MSN

Microsoft did experience one crushing defeat. Heading into 1997, the folks at the Microsoft Network crowed that they were spearheading the transformation of the Web into something more like TV, with lots of "channels," original "programming," tons of on-screen animation and a bunch of Hollywood people calling the shots. Unfortunately, most of this stuff barely worked -- and when it did, it was boring, pointless or stupid. By the end of the year, nearly all of the "programs" had been canceled, and a chastened Microsoft was repositioning its network in the direction of services and transactions. Meanwhile, AOL grew to the vicinity of 10 million members -- most of whom still seemed to be either hanging out in chat rooms, sending e-mail or complaining about the service. (S.R.)

Push fizzles

1997 was supposed to be the year "push" broke big. A grab-bag term grouping together a disparate array of Net-broadcasting techniques, "push" referred specifically to the idea that Net-based content providers would target packages of data at Net users in an active fashion, rather than wait passively to be discovered by roaming surfers. But the concept of push has yet to take off with the general Net public. Perhaps the idea was too "pushy" -- or even more likely, too vaguely defined for anyone to grasp. Even as the hype fades, though, behind the scenes there's plenty of pushiness going on. Targeted advertising based on demographic information (you're 27, female and live in Dubuque? This ad's for you!) is the essence of push -- and it's growing like crazy. Net entrepreneurs will keep pushing as they strive to figure out ever more polite, and effective, ways to shove messages in your face. (A.L.)

Waiting for bandwidth

For all the hoopla about ISDN (great if you can afford it and make it work), cable modems (great if you can persuade your cable company to provide them in your neighborhood) and 56K modems (great if you can actually get 56K bps speed and if your modem talks the same kind of 56K as the one at the other end of the line), the sad fact is that most of us ended 1997 cruising the Net at the same speed as when the year started. 28.8K and 33.6K modems are OK for many things, but not for the kind of multimedia-heavy Web experience the industry keeps promising the public. As it stands today, the only location where most people can access Web content on really fast lines is at work -- which is precisely the wrong place to listen to music, watch video and generally entertain oneself. The Web will never become an entertainment medium until it remedies this disjunction. (S.R.)

WorldCom |ber alles

It would be hard to imagine a better fictional name for an evil cyberpunk transnational conglomerate hell-bent on world domination than WorldCom. Well, 1997 gave us the real thing. For years, this small telecom services provider has been gobbling up bigger companies and establishing a stranglehold over the Internet's infrastructure. WorldCom topped off its rise this year by offering to buy MCI, the second largest long-distance phone company in the world and a leading supplier of basic Internet connectivity. So far there's been no squawking from antitrust officials -- but there should be. Earlier this year, execs at one of WorldCom's companies, UUNet, made no secret of their desire to end the consumer-friendly structure of flat-rate Internet-access fees that is currently the industry norm. WorldCom is one of an ever-concentrating number of corporations capable of dictating changes to the Net industry. Remember that name: Cyberpunk-style corporate overlordship may yet become a reality. (A.L.)

It's all lunatics and liars
While millions of everyday people got online for the first time this year for mundane purposes like sending e-mail and booking flights on the Web, some media outlets stuck to their old line: The Web is a haven for weirdos. When Marshall Applewhite and his Heaven's Gate followers performed their bizarre and sad mass suicide last spring, some commentators -- particularly on TV -- jumped at the discovery that the cultists had run a Web-design business as proof of the medium's inherent lunacy. A few months later, the "beware the Net" crowd jumped at the news that a little-known journalist's commencement-day address was circulating online under the byline of novelist Kurt Vonnegut: further proof, they crowed, that you can't trust everything you read on the Net. Well, duh! (S.R.)

Raise your standard high
Java started the year as the programming language that promised to bring true cross-platform compatibility -- allowing the creation of software products that developers could "write once, run anywhere." By the end of the year Sun was running ads touting its version of Java as "100 percent pure," while Microsoft proceeded with its own different-enough-to-cause-problems version. As with the browser war between Netscape and Microsoft, Java's looming disintegration reminds us of a sad truth in the technology biz: Everyone wants universal standards. Everyone loves competition. The two concepts, alas, always seem to be at war with each other. (S.R.)

Sex sells -- or does it?

The most ironic story of 1997 was the dramatic growth in the availability of online pornography, both for free and for fee. The surge can be traced directly back to the judicial override of the 1996 Communications Decency Act, finalized by the U.S. Supreme Court in June. Before the CDA, nobody knew what was legal and what wasn't, and sex merchants kept a low profile. But the attempt to outlaw all "indecency" ended up clearing the path, for now, for the online sex biz. A million sex sites bloomed, as did a million mainstream news stories all making the same point -- that the first sector of the Net economy to show a profit would be the age-old sex industry. But the proliferation of sex sites has proved to be the business's worst enemy: Too much competition has engendered a cut- throat market full of scammers, cheaters and decreasing profit margins for everyone. Ain't capitalism great? (A.L.)

The Net economy gathers steam

The attention devoted to how sex sells on the Net might make one think that nobody else is making any money at all. But 1997 was the year in which online commerce began to show real signs of strength. Led by innovators like Amazon.com, online stores found that they could build real businesses selling stuff online -- and that customers would even use their credit cards on the Net. Meanwhile, advertising dollars spent on the Net rose from quarter to quarter. The total dollar figures are trifling compared to the offline ad biz, but the growth curve is sharp enough to give encouragement to Web sites trying to build businesses around ad revenue. (A.L.)

Check out our new low prices!

By now you've probably heard of the "Under $1,000 PC" -- the computer market's biggest-growing niche. What you probably heard was a paean to the technology industry's awesome and accelerating efficiency. Here's what you might not have heard: First, a lot of PC manufacturers snuck under the $1,000 line by the neat little dodge (borrowed from the Apple playbook) of leaving the monitor out of the price. Second, a big reason prices dropped so low so fast was that the market is flooded with low-end Pentium chips. Third, another big reason for the price drop was the sharp decline in RAM prices this year, which altered the price/performance equation across the computer-market board. Everyone loves a cheap PC -- but don't let the manufacturers get away with taking credit for this trend: It caught most of them sleeping at the keyboard. (S.R.)

Spam, spam, spam, spam ...

The problem of spam -- unsolicited junk e-mail -- became one of the defining issues for the Net in 1997. Although virtually no one enjoys receiving multi-level marketing scams and sex-site come-ons in their electronic mailbox, there is no widely accepted method for dealing with the junk. Net-libertarians decry attempts at governmental regulation as Big Brotherish infringements on cyber-freedom. But no amount of technological defense gimmickry has proven capable of stemming the spam flow. And despite a year of increasingly strident discourse on the subject, after all the shouting, there's still only one effective response: the delete key. (A.L.)

More bruises for Apple

Apple Computer's downhill trip over the last decade has been so long and agonizing that it's perilous to try to identify turning points. But in 1997 even the most diehard Mac faithful began to quail as their beloved platform took one body blow after another. They could take declining market share; they could take each new turn of the executive suite's revolving door; they could take the dwindling software selection; they could even take the news that Apple had welcomed a relatively small investment from its archenemy Microsoft. But Steve Jobs' mid-year decision to stop licensing the Mac operating system to clonemakers like Power Computing drove many of Apple's flock out the door: The move dashed the last hope that the Mac might grow its own thriving sub-universe of products and services. Think different? Think dumb. (S.R.)

Dungeons and Dragons comes of age

Online multiplayer gaming, which many analysts long considered a sure-fire "killer app" for Net commerce, has been a bust for years. But 1997 convinced many doubters that things were changing. Even while dedicated online gaming companies like the Total Entertanment Network found themselves forced to lower fees and look for imaginative ways to attract players (TEN even went so far as to inaugurate a "Professional Gamers League"), at least one company, Blizzard Entertainment, struck it rich with Diablo -- a Dungeons and Dragons style role-playing game that encouraged easy interactivity across Blizzard's own Web servers. Diablo reigned at the top of the game charts for most of 1997, sending a clear signal to the rest of the industry that there are bona fide ways to make money from multiplayer gaming. (A.L.)

Communities for sale

At the start of the year a book called "Net.gain" told online entrepreneurs that if they expected to make money in the new medium they had to do more than produce content or sell stuff -- they had to build community. A buzzword was born. But while high-minded and creative attempts to build real online communities (like Howard Rheingold's Electric Minds) floundered for lack of a clear business plan, pseudo-communities sprouted across cyberspace like so many company towns. "Net.gain" left out one crucial point: It never told the businesspeople that community and commodity aren't interchangeable terms, and in fact are typically at odds. You can promote a community all you want -- but try to sell it and it will disintegrate. (S.R.)

Net punditry overload

The publishing industry woke up to the Web in a big way this year and shoveled out vast numbers of volumes explaining, extolling or damning the brave new online world. Many were worthless, clueless or pointless. Occasionally, something of value would stick out from the crowd -- typically, when the author was not a prominent scientist or pundit or mogul but just somebody who's worked at ground zero in the digital field and knows how to write. The best "computer books" of 1997 -- like Ellen Ullman's "Close to the Machine" and Steven Johnson's "Interface Culture" -- didn't surf trends or dabble in future scenarios; they digested real human experience in thoughtful ways. (S.R.)

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

MORE FROM Andrew Leonard

By Scott Rosenberg

Salon co-founder Scott Rosenberg is director of MediaBugs.org. He is the author of "Say Everything" and Dreaming in Code and blogs at Wordyard.com.

MORE FROM Scott Rosenberg

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