Computer Age Enters Maturity
When Wired magazine debuted five years ago, its founder famously proclaimed that “the digital revolution is whipping through our lives like a Bengali typhoon.” But 1998 may go down as the year the revolutionary phase of this digital age came to a close.
After all, how revolutionary can things be now that Wired is a sister publication of Bon Appetit? Or that the Internet is now a plot device not just for creepy cyber-thrillers, but a soapy Tom Hanks movie? Or that Netscape Communications Corp., once the icon of Internet ascendance, is being acquired by middlebrow America Online Inc.?
The Internet has yet to even touch most people’s lives. And clearly it is far from reaching its potential as an economic, social and political force. But many of the industry’s early insiders look back on 1998 as a turning point, a time of transition from a tumultuous, blue-sky era to a more mainstream, button-down age.
“Revolutions are always co-opted, and this one has moved away from the avant-garde,” said Howard Rheingold, an Internet pioneer who helped launch Wired’s online news service. “The era of ‘Look, here’s something new!’ is pretty much gone.”
The signs are subtle, but significant. Entrepreneurial opportunities still abound, but they are more narrow and difficult to grasp. Technology stock offerings had some blockbuster winners in 1998, including online auction house EBay Inc. But overall, tech IPOs endured a down year.
Further, the heady cyber-libertarian rhetoric of just a few years ago has quieted considerably. And even the dress code in San Francisco’s Multimedia Gulch has evolved such that one longtime resident said it “looks a lot more like the advertising industry, and a lot less like a rave scene.”
Of course, no one expected the rave to last forever. Every breakthrough technology basks in a brief period of awe and social tumult, then settles into a period of widespread adoption and integration. Electricity and the telephone, for instance, had far greater impact decades after their introduction, even though they gradually faded into the background of everyday life.
That is bound to happen to the Internet too, experts say, as its once vast and unpopulated virtual territory is gradually settled. It now reaches 54 million people in the United States at work or at home, or about 20% of the country’s population, according to Media Metrix. Inevitably, these newcomers have brought more mainstream values to a once exclusive, and often elitist, online community.
And though Internet pioneers such as Marc Andreessen say they will miss that bygone era, they aren’t necessarily mourning its passing.
“The business is certainly a lot more serious now, but that to me is a good thing,” said Andreessen, a co-founder of Netscape. “The early Internet industry was fun, but it was very provincial, and tended to attract a lot of people who were kind of far-out, but not necessarily great businesspeople.”
Several years ago, Andreessen was part of an unprecedented contingent of twentysomethings who stepped straight out of college and into fortunes and fame on the Internet. Andreessen once posed barefoot for Time magazine as the cover boy for this new generation that also included Jerry Yang and David Filo at Yahoo Inc. as well as Joe Kraus and Graham Spencer at Excite Inc.
They were all exceptionally bright and unusually driven. But they were also lucky enough to be emerging from college at a historically opportune moment when the Internet was in widespread use on campus, but before the World Wide Web had exploded as a mainstream phenomenon. By an accident of timing, they had the inside track on the biggest business opportunity in decades.
Kraus compares it with being present at the moment of the Big Bang.
“The universe was one big mass of little teeny companies,” he said. “Then gravity started taking hold, and now you’re starting to see a greater condensation of the Internet business into larger, denser areas where you have a couple of major players and smaller players orbiting around them.”
That means new stars have to look for vacant space in the shadows of these emerging planetary globules such as Yahoo, Disney, AOL and Microsoft. This has already altered the approach of the venture capital industry that finances new technology companies.
Money is still flowing at a record pace. According to PricewaterhouseCoopers, venture capital funding of technology companies will surpass $8.2 billion this year, compared with $5.4 billion in 1996. But the ideas that get funding are more narrowly defined.
Vinod Khosla, a Kleiner Perkins Caufield & Byers partner who decided to back Excite, said that because today’s landscape is so cluttered, the new focus is on narrow, well-defined opportunities to transform traditional businesses. Khosla’s latest entrepreneurial pride and joy is a perfect example: https://www.bridalregistry.com, which aims to become a one-stop shop for wedding gift registries.
“Suffice it to say this is a niche,” Khosla said. “But we still think this is a multibillion-dollar business.”
The market for new technology stock offerings cooled in 1998, largely because of the Asian financial crisis and other market uncertainties. Through mid-December, there were 97 tech IPOs, down from 126 in 1997, according to research firm CommScan. A record 39 tech IPOs had been withdrawn or postponed.
Many experts say the Net is just experiencing a temporary lull, and that activity will ramp up again when today’s slow modems give way to bigger, faster data pipelines that could usher in a new age of entertainment and services. Even so, the Internet’s so-called gold rush days are probably over.
“It’s not a matter of being the guy that climbs the mountains to find new places to mine,” said Stewart Alsop, a technology columnist and venture capitalist. “Now it’s about making better picks and shovels.”
If you want to actually see evidence of the changing times, visit South Park, a plot of grass at the center of San Francisco’s Multimedia Gulch. South Park became something of a multimedia petting zoo several years ago, as news crews flocked to get a glimpse of the tattooed and pierced creatures behind various Webzines and other online innovations.
Today, ties often outnumber tattoos in South Park, and many nascent online businesses have had to move to other locales in San Francisco because rents in Multimedia Gulch have soared 300% following an influx of white-collar businesses over the last five years, local real estate agents say.
“The piercings and tattoos are not altogether gone,” said Max Applegarth, owner of Caffe Centro in South Park. “But the Web design crowd that originated in this area has given way to people with good resumes and comfortable positions in the new corporate multimedia world down here.”
The changes at South Park mirror a broader shift in the Internet’s demographics. Once an intellectual playground for the “digerati,” the Net today is populated by suburban families and traditional businesses.
These mainstream users bring a different mind-set than prevailed just a few years ago, when John Perry Barlow published “A Declaration of the Independence of Cyberspace.”
“Governments of the Industrial World,” wrote Barlow, a Grateful Dead lyricist and founder of the Electronic Frontier Foundation, “on behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.”
The declaration was written in the wake of the passage of the Communications Decency Act, which, before it was overturned by the Supreme Court, outraged many Internet users because it outlawed “indecent” material on the Net.
Barlow’s tome was “incredibly resonant at the time, and was a defining statement,” said Todd Lappin, political editor at Wired magazine. “But two or three years later, it seems pretty quaint. It just applies to a time that no longer exists. It’s obvious that the government is going to have some role to play in cyberspace.”
In fact, this year Congress triggered one of the biggest events in cyberspace by releasing independent counsel Kenneth Starr’s report online. Congress also took another stab at regulating online content through a second law that faces its own constitutional challenge. Meanwhile, the White House pressured Web sites to do a better job of protecting users’ online privacy, and other government agencies, from the FBI to the FTC, pledged to step up their efforts to police Internet crime.
Barlow’s followers would have abhorred these intrusions, but many of today’s Internet users welcome them.
“It is,” Lappin said, “the post-revolutionary age.”
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Times staff writer Greg Miller can be reached via e-mail at greg.miller@latimes.com
