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By Gowthaman Ragothaman, CEO of Aqilliz
Published on November 5, 2019
It all started on 20th October, 1969 when four nodes from University of California Los Angeles, Stanford Research Institute, University of California Santa Barbara and University of Utah got interconnected as a network through Interface Image Processors from Honeywell DDP-516 mini computers with 12K of memory built by Bolt Beranek and Newman, Inc on 50Kbps lines provided by AT&T.
Interconnected Networks, or Internet in short, grew from 4 nodes in 1969 to 15 nodes (and 23 hosts) in 1971 with the ability to send messages and files between them. For good long ten years, by 1982, after a series of hits and misses, Netherlands, Denmark and Sweden joined UK and US on what is popularly called as the Transmission Control Protocol (TCP) and Internet Protocol (IP) leading to one of the first definitions of “internet” as a connected set of networks.
From 23 hosts, internet, as we call today, reached 1,000 hosts (with 113 nodes). With the first message from China, sent on 20th September 1987, the internet reached 10,000 hosts. And by 1989, with most of Europe, Australia, Israel, Japan, Mexico and New Zealand joining in, the number of hosts breaks to 100,000. And by 1990, Argentina, Brazil, Chile, India and Korea join the network. On 6th August, 1991 with the invention Hyper Text Transfer Protocol and the Hyper Text Markup Language the world wide web as we know today came to existence. Around the same year Croatia, Hong Kong, Singapore, South Africa, Taiwan and Tunisia join with the number of hosts reaching a million. By 1996 13,000 ports were added to increase the speed of internet from 155 Mbps to 622 Mbps.
By 2000, most of the country domains were registered. Many companies started setting commercial web directories disguised as portals of information. Prodigy and similar companies realised that the consumers come to their page more for connecting with others and sending emails rather than for information. Initially, banners were sold on cost per impressions and when there was mindless serving of banners, frequency capping was introduced to reduce fatigue and chat-rooms were created to hold on to them.
Banners were made clickable as well, to increase their stickiness (first banner ad had a CTR of 41%) starting with a clickable banner ad in 1994 from AT&T. Commercialisation of internet is all linked to grabbing eyeballs. There were more and more portals selling eyeballs, not necessarily identified as humans, but more as a mere click. And it all failed when the bubble burst into the reality of not reaching real consumers with real needs and wants. To resurrect the online advertising business, pop ups came into being, with the primary objective to grab consumers attention (once again) but very soon, there were pop up blockers too and the internet continued to play cat and mouse with the consumer experience to find the holy grail.
As the number of websites reached millions and out of count, the attention shifted to help consumers find content through Search Engines. Only when consumer clicks to proceed further, the listings were considered valuable to be rewarded. This pay per click model was further improvised with the click through rate integrated to it. Integrating PPC with CTR ensured that there is increased relevancy. In all this, the commercialisation of internet continued to be dependent on providing enhanced experience to the consumer with the help of technology.
It is important to note that the consumer never paid for this technology, instead the experience is bartered for eyeballs that in turn funds to run the internet. Discovering content online, took off and took shape from 2000 as the next consumer experience for barter. Weblogs from individuals logging in their diaries transformed to “we blog” and soon having your own blog became hip around 2002. Consumers are now gradually getting attracted towards being connected with their friends, relatives, acquaintances or some form of a community across the globe.
Even though Email brought the genesis of social media way back in 1971, it was the IRC open protocol that allowed more than two participants to chat real time over internet in 1988 which laid the foundation for the next innovation on the internet – community engagements. The erstwhile chat rooms which were providing a very good alternative to an otherwise expensive international phone calls became the next test bed for innovation. Along with profiles and friends list, school and business affiliations were a natural glue to connect with lost relationships and/or build new ones.
Distributing content online became a game of getting one better than the offline world. Starting with HD DVD, Blu Ray and HDTV, it was as if to prove, that content over cable is better in quality than watching content online, but that did not stop Apple TV, YouTube, Netflix, Roku and Hulu getting launched. The five years from 2005 to 2010 witnessed the “internet pipes” getting better and better with high quality radio streaming, Video on Demand and Smart TVs enabling high definition content being viewed online. It is during these five years, internet users doubled to 2 Billion.
By 2015, mobile telephony began to significantly influence internet usage and in the process almost erased the distinction between a node and a host. Each mobile device is able to receive, create, store or send data and that made every single mobile phone a node. This has got very profound implications. With almost 95% of the global population covered by any mobile telephony, mobile internet (with nearly 30% penetration) reached critical mass for adoption. It was lack of content and affordability that was in the way for it. It was all about the spectrum. It was all about Smartphones.
With phones came the technology to add camera to it and along with it the emergence of photo-sharing and messaging applications. This engagement further got upgraded from voice to text to pictures to videos and a whole new mode of engagement emerged connecting more than 2 billion people across the world. Celebrities, politicians and influencers found this platform an easy way to reach out to their fans, followers and constituencies. And in all this, the focus continued to be on communities and enhancing content generated by the community members to be able to share with each other effortlessly.
As the security features on the internet got enhanced with SSL encryption and industry wide compliance on payment standards, online market places began to emerge, where one can buy anything and everything. The unique benefit from this internet market place, is the focus on providing an online experience, that not only delivers goods, at a price cheaper than otherwise, but also included recommendations. For the first time, the interconnected networks were being used to derive administrative efficiencies beyond the brick and mortar infrastructure and the Internet of Value was looking beyond bartering eyeballs.
Commercialisation of internet began with subsidising the cost of interconnection between two individuals or a group of individuals through advertising as its primary sponsor. The impact of internet, therefore, largely remained only with consumers enhancing their lifestyles, needs and wants – with limited (but growing) influence on education, health care, governments, safety and security. Education was showing a lot of promise but the lessons from the past on the commercialisation of internet indicates that there is a need for an active ecosystem that is ready to partner, for increased adoption. Commerce on the internet provided the first sliver of hope to look beyond bartering eyeballs but instead provide genuine value enhancement to the consumer.
Today we are at a stage where Mobile Telephony with 5G is poised to bring the next big innovation, both with the nodes and with the hosts, with enhancements at the edge of distribution. Through short range wide spread connection at increased latency and speed, many more devices in and around us will be made to act as hosts with humans acting as nodes. 5G offers the potential to commercialise these enhancements in a totally different way, much different from commercialising eye balls but offering genuine living upgrades through recommendations, convenience and connectivity.
However, it is important to note that there is no one individual or entity, who is in charge of the internet. It is a network of networks that is needed to operate around the world as if it is one. Commercialising this network was inevitable for its earlier growth and that was not possible without transforming the Internet of Information into the Internet of Value. And this was made possible with open standards that allowed every network to connect to every other network making it possible for anyone to create content, offer services and sell products without requiring permission from any central authority.
These open standards also resulted in having different expectations from the various participants in the interconnected network. Brands, the primary sponsor (subsidiser) of the internet will look at better reach and engagement for their brands with commensurate return on their advertising investments; consumers will expect accessing entertainment and connecting with their friends and family and business associates at almost no cost while platforms or publishers will look at building a sustainable consumer base to whom they can serve content for a profit.
The Internet, as originally envisaged, is a self-regulated network, providing a level playing field for everyone through reduced entry barriers, providing access for everyone. However, the imbalance in the expectations between the various participants, has now given us new challenges like online fraud, fake news and friction in the ecosystem. Consumer data is now being abused to create monopolies on the network. Convenience is now being over shadowed by broken connections due to an fragmented overcrowded network. Often bots are replacing humans to show traffic to mark-up subsidies.
There is a need to balance the expectations between the participants. That is the only way we can bring real convenience to the consumer, one that is built on trust and transparency. The value that is being exchanged in return for consumer data needs to be authenticated and authorised to prevent abuse. In the absence of any central authority, authenticity and authorisation can only be brought through a distributed consensus from the various participants on the network. It took 20 years from 1969 to 1991 to add a HTTP layer on top of the TCP/IP to create the Internet of Value. Perhaps it is now time (after 25 years) to add another layer on top of HTTP, to provide the much needed authenticity and authority to the value that is being exchanged on the network.