Have Gates & Co. peaked? 21st reviews tech highs and lows of '98.

Published December 24, 1998 8:00PM (EST)

In 1998, the public woke up and realized that the affairs of the Internet and the technology industry weren't merely the province of over-educated engineers and social misfits. Instead, they seemed to become the overwhelming force behind the global economy, a powerful influence on the dynamics of U.S. politics and media and an increasingly potent fuel for social change. For good or ill? We could (and did) argue both ways on that one. But no one could still rationally maintain that the Net was just some kind of passing fad like CB radio or some doomed medium like CD-ROM. Everyone could see that what happens online is entwined, inevitably and importantly, with what happens in the "real" world.

Here's how what happened looked to us here at Salon 21st:


This fall, the courtroom travails of Bill Gates loomed almost as large on the national screen as those of that other Bill -- down to their similarly evasive videotape testimony. But whereas the impeachment saga left a near-universal bad taste in the public mouth, the Justice Department's antitrust suit against Microsoft helped focus the world's attention on some critical questions for the future of the digital age.

Is Microsoft an exemplar of high-tech entrepreneurial smarts for the industry to be proud of -- or is it the ultracompetitive Evil Empire of Silicon Valley nightmares? Should we applaud the company for creating phenomenal wealth or disdain it for producing buggy "bloatware"? Is its 90 percent share of the operating system market an ironclad monopoly -- or just this year's deal of the tech industry's ever-changing cards? These issues really matter, not the endless circular argument about whether a browser is, can or should be a part of an operating system. They're why Bill Gates, even more than Bill Clinton, gets so many Internet users hot under the collar. (S.R.)


In January, the term "open source" did not exist. By December there was no avoiding it. From trade magazines to the New York Times, open-source software, also known as free software -- software for which the underlying source code is freely available -- was everywhere. Why did it spread so fast? First, people are passionate about open source -- it's just more fun to be part of a world in which people are encouraged to share and cooperate. Second, the evidence keeps mounting that the open-source development model actually produces better code.

In March, Netscape endorsed the movement and released vast quantities of its Navigator Web browser code to the world. By mid-summer, huge database companies like Oracle and Sybase were porting their software to the Linux operating system -- and Linux creator Linus Torvalds even made the cover of Forbes magazine. IBM started bundling the open-source Apache Web server program with its "e-business" package. But nothing validated the threat that free software/open source poses to the proprietary dinosaurs of the software industry better than Microsoft's own appraisal. On Halloween, Eric Raymond, open source's No. 1 evangelist, published a leaked Microsoft memo detailing how open source challenged the software giant's business. The question for next year is, how will Microsoft react to this threat? Can it figure out how to compete not with a company but with a popular movement? (A.L.)


Imagine if AOL had bought Netscape two years ago: The wailing and moaning in cyberspace would have rent the heavens. One of the Web's sassy standard bearers gulped up by the bland folks from Reston, Va.? A culture-clash disaster! But in 1998, though the $4 billion stock-swap merger was certainly a big news event, it wasn't the kind of story that sparked much agonized agitation -- except maybe at Microsoft, where the prospect of squaring off against the combined forces of AOL and Netscape might give even Gates pause. AOL already has some 14 million subscribers in tow; the addition of the 20 million pairs of eyeballs that visit Netscape's Netcenter every month gives the online services behemoth some pretty impressive numbers. For the moment, at least, AOL rules the Net. Who'da thunk it? (A.L.)


Thank you, Ken Starr. When the Starr Report was released in September, tens of millions of people went flooding online to read it: After all, how else could you do searches on keywords like "cigar" and "anal"? That one document -- along with the online release of the Lewinsky tapes, the hearing transcripts and other assorted Sexgate documents -- probably introduced more Americans to the power of the Web than anything thus far.

But the release of the Starr Report was only one small part of the boost that the Web has received from the whole impeachment imbroglio. Online news providers saw their numbers explode and their reputation solidified -- 80 percent of the online public say they trust online news as much as network news (and 7 percent trust it more), according to one study. Americans (and Europeans) kept on top of events by checking in to the rapid online updates, and online rogues like Matt Drudge became overnight celebrities. (J.B.)


A year ago, Apple -- reeling from years of losses, dwindling market share and a revolving door in its executive suite -- was beginning to regroup under interim CEO Steve Jobs, but a lot of pundits still viewed it as a goner. What a difference a year makes: Today, Apple has recaptured the public eye with the flashy iMac -- as well as faster processors, more stable operating-system software, a high-concept ad campaign, upgraded PowerBooks and more. Say what you will about the translucent-blue iMac (like, can you judge a computer by its cover?) -- it's clear that the product has rekindled a lot of love affairs with the 15-year-old Mac. (S.R.)


What do you want to buy today? This was the mantra of 1998, as e-commerce sites sprang up left and right and consumers actually (gasp!) seemed to be buying stuff online. Shopping sites begat knock-off retail sites, which begat meta-shopping sites that would crawl the Web for the best prices. And then came eBay, which started the online auction craze (now at a portal near you!) by allowing Beanie Baby fanatics and proud Furby possessors to hawk their plush toys alongside spammers and antiques dealers. We're all Web merchants now. (J.B.)


It's become a real boy-who-cried-wolf style clichi: Every year around this time, we hear the chorus of experts telling us that next year is when the much-heralded "convergence" of TV and the computer, or the Web, will finally happen. Next year will be when fast, "broadband"-style Internet access becomes truly available to the general public at home. Next year is when the cable TV companies or the telephone companies or both will figure out how to make this a reality. Well, we've been waiting for this future for as long as Salon has been in existence. Alas, cable modems still aren't available to more than a fraction of the populace, and high-speed DSL service from the telephone company costs a fortune for those lucky enough to have it offered in their area. Tune in a year from now and see whether the promised land of "convergence" is still on the "next year" calendar. (S.R.)


MP3 -- it's the innocent little acronym that's filling the hearts of the recording industry with dread. With 10 million MP3 players downloaded so far, and portable playback devices like the Rio hitting the market, the MP3 sound format is quickly becoming the standard for CD-quality downloadable music on the Web. Musicians love it because it's a free, open format; MP3 pirates love it because it has no copyright protection. The Recording Industry Association of America hates a format it can't control, and is trying to stop the stampede by filing lawsuits and backing an initiative to come up with a new, high-security standard. Since the RIAA's alternative won't be released until next Christmas, it may be too late. (J.B.)


E-mail was the original "killer app" for the Internet -- even though it was never meant to be. After investing all that government money creating a network that could resist nuclear war and allow the coordinated use of computing resources across the United States, the designers of the Internet's predecessor, the ARPANet, were stunned to find out that the most popular use of the network was for sending mail. Today, after five years of frenzied searching for profitable Internet business models, what did people start focusing on in 1998? Dowdy old e-mail. It seems that fewer people are clicking on those Web advertising banners, but a successful targeted e-mail campaign can achieve a healthy response for a low cost. But for every politely targeted e-mail campaign, bucket loads of spam are dumped in all of our e-mail boxes. And although in 1998 the war against spam reached new ferocity in legislatures, courthouses and regulatory agencies, there's little chance of spam abatement any time soon: the chance to send you e-mail is too valuable to pass up. (A.L.)


This year, Congress tried harder than ever to apply firm rules to the chaos of the Web. It passed the Digital Millennium Copyright Act (protecting intellectual property), the Murkowski spam bill (restricting spam) and, of course, the Child Online Protection Act -- better known as the CDA II online censorship law. But the anti-censorship contingent isn't giving up yet: The ACLU won a preliminary injunction against CDA II, and managed to prevent a Virginia library from implementing filtering software. Online retailers, at least, escaped regulation for now, as Congress mandated a three-year moratorium on new state taxes of Net-based commerce. (J.B.)


The Web's original-content sector had a rough year. The once-proud Wired empire got split up and sold off -- the print magazine to Condi Nast, the online components (HotWired, Hotbot, Wired News and Suck) to Lycos. Time Warner's Netly News shut down, with its remaining staff shunted over to produce the blander Time Digital Daily. Word folded ; then an unlikely purchaser named Zapata revived it. Zapata had taken out newspaper display ads declaring "ZAPATA WILL BUY YOUR WEB SITE!" and offered a number of small Web sites the dream of deliverance before it got cold feet and canned its Internet strategy. (Word, at least, still remains in its portfolio.) Meanwhile, Microsoft's Slate switched over to a pay-subscription scheme -- allowing its owner to perform an experiment in online business-model research, but effectively isolating most of the magazine's contents from the bustling linkfest of Net journalism. (S.R.)


The first thing the pooh-bahs of the media always mutter about the Internet is that "you can't trust it." And of course they're right: Just look at the "Our First Time" fiasco. When this Web site announced that a couple of comely teens planned to lose their virginity live on the Net, it didn't take long for the print and broadcast media to fall for the story. Meanwhile, online journalists at sites around the world sniffed the hoax a mile away and proceeded, URL by URL, to uncover it. The same kind of skeptical savvy helped a reporter at Forbes' Web site expose Stephen Glass' fabricated hacker story in the New Republic. Maybe next year we can all retire the windy generalizations about Old Media stupidity and New Media scurrility. "Don't trust anything you read" remains a smart motto for newspaper readers and Web surfers alike; and "does it check out?" should always be the first question journalists ask -- about Internet stories above all. (S.R.)


If only we could hope that portal hype will fade in 1999 as fast as "push" hype faded in 1998. Portals all look the same and they all offer the same services -- certainly, from a Web design standpoint, there was nothing more depressing in 1998 then watching the institutionalization of portal monotony. But we may not be as lucky with portal mania as we were with the push craze. Portals actually have a real business plan to woo venture capitalists with. It is convenient to have one-stop shopping for sports scores, stock quotes, headline news and daily horoscope predictions. The portals attract millions of visitors every day, and with e-commerce booming, they stand well-placed to grab chunks of cash. Does that mean a portal site like Yahoo is worth more than $20 billion (as it is currently valued)? Of course not. But it does mean that portals won't soon go quietly into the good night. (A.L.)


Last year, a plethora of gaming sites were crowing about the incredible growing market for online multiplayer games. Perhaps they spoke too soon. Lag times and server glitches still make all but the very best games problematic to play online. This year saw one of the "low-latency" online gaming leaders, DWANGO, close its doors, and two more -- mPath and TEN -- move away from their unprofitable pay-to-play models to become service companies. And while games like Diablo and Quake are drawing respectable numbers, the successful multiplayer title Ultima Online had so many bugs that it sparked a gamer lawsuit. The most popular and reliable online games, it seems, are still cards and chess. (J.B.)


1998 was the year the PalmPilot took off, finally validating all those years of hype predicting that "personal digital assistants" would be the Next Big Thing. And, I confess, I was one of the millions who jumped on the bandwagon. The PalmPilot has changed my life: It is my backup, my crutch, my daily memory. I use it to keep my home and office computer calendars, contacts databases and task lists neatly synchronized -- to ensure that I survive info overload. I did become a bit worried when I started hearing about the ambitious expansion plans of Palm Computing (now a unit of 3Com) -- $800 wireless Internet devices are a different order from the relatively cheap ($200-$300) PalmPilot or Palm III. But Silicon Valley gossip is reassuring. Palm Computing's founders, Donna Dubinsky and Jeff Hawkins, have started their own new company, where, the word is, they will make low-priced Palm clones. Palm power to the people! (A.L.)


The fearsome Millennium Bug, merely a strange rumor a couple of years ago, was the hot technology scare story of the year, displacing pedophilia as the digital terror gracing the covers of sensationalistic newsmagazines. Depending on whom you believe, Y2K will either cause minor computer glitches or an entire societal breakdown -- and enough scare mongers are convinced of the latter to spawn a burgeoning Y2K survivalist movement. Prepare for a deluge of Y2K doom stories as the millennium nears. Now might be a good time to buy some stock in producers of canned beans. (J.B.)

By Andrew Leonard

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

MORE FROM Andrew Leonard

By Janelle Brown

Janelle Brown is a contributing writer for Salon.

MORE FROM Janelle Brown

By Scott Rosenberg

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

MORE FROM Scott Rosenberg

Related Topics ------------------------------------------

Aol Microsoft