Things Sure Have Changed in Last 20 Years

My last column of the millennium is as good a time as any to look back on the 20 years since I bought my first personal computer, an Apple II with 32 kilobytes of memory and a single 140-kilobyte floppy disk drive. I was a graduate student working on a dissertation. Even though there were plenty of programs available for the Apple II, I mainly used it to go online with the University of Massachusetts mainframe so I could use the university’s far more sophisticated software.

I feel as if I’ve come full circle. Two decades later I’m sitting in front of a machine that has 4,096 times as much memory, 7,489 times the storage as my Apple II and is faster and more powerful than the old university mainframe. Yet thanks to the Internet, an increasing number of the programs that I run today reside not on my PC but on distant mainframes that we access over the Internet. Technically, most of the Internet servers aren’t really mainframes, but the principle is the same. Instead of using the processing power of your personal computer, you’re taking advantage of the power, storage and sophisticated software on centralized computer systems.

Whether that’s progress or “back to the future” depends on your perspective. For some programs, such as shared calendars, e-mail, shopping and online banking, it makes a great deal of sense because the application itself depends on network communications between you and others. It also makes a great deal of sense if you’re relying on data--such as mortgage rates or stock prices that can only be kept up-to-date if accessed via the Net.

But the world of network computing isn’t limited to what we traditionally consider to be network applications. Microsoft, Sun Microsystems and several others have announced that they will soon start offering Internet applications. Instead of buying your copy of Microsoft Office, for example, you’ll be able to rent it by accessing your word processing, spreadsheet, calendar and other programs over the Internet. Indeed, the emergence of network applications has even spawned a new type of business called application service providers that are springing up to provide programs on a subscription basis.

That isn’t all that different from what I remember from my graduate student days. Even though I could have written my dissertation using Apple II software, I chose to use a program called X-Edit that ran on the university mainframe. It enabled me to store data files that were much too big for the Apple’s floppy disk, gave me the security of knowing that my information was backed up on a secure server and allowed me to work on my document from any terminal on any University of Massachusetts campus. These are the same advantages being touted by today’s application-service providers--only then, we called it time-sharing.

Many of today’s other “innovations” also had their roots in the ‘70s and ‘80s. I can’t help but smile about Time magazine’s selection of Amazon.com founder Jeff Bezos as Person of the Year. Bezos certainly deserves recognition for launching and nurturing Amazon.com, but he didn’t invent e-commerce.

CompuServe, which was founded by H&R; Block in 1979, offered early versions of many of the services we associate with the Internet. In 1982, I started working on a book called “The Electronic Link,” which referred to CompuServe, Source and Dow Jones News & Retrieval Service, all of which offered access to Comp-U-Store, a shopping service “with over 50,000 products in its electronic catalog at discounts up to 40%.”

Even in the early ‘80s, CompuServe and Source subscribers could access online banking, an electronic encyclopedia, software downloads, newspapers, stock quotes and airline schedules. Neither service offered online ticketing, but the Source could “connect you, via electronic mail, to a travel agent who can write your ticket and mail it to you.” How primitive. In case you’re wondering, CompuServe acquired the Source, which was initially owned by Reader’s Digest. CompuServe, which didn’t adapt itself to the Internet quickly enough, nearly folded but was acquired by America Online in 1997.

In the ‘80s, people had to pay for Net access by the hour, and it wasn’t cheap. When I wrote my book, CompuServe users paid $17.50 an hour to access it using a “high speed” 1200-bit-per-second modem. Dow Jones charged up to $144 an hour for access to market data and other services during business hours.

AOL wasn’t around back then, but when I wrote my next communications book (“Cruising Online”) in 1994, subscribers got only five free hours a month and paid $3.50 for each additional hour. Prodigy, which was founded by IBM, Sears and CBS in the late ‘80s, changed the equation by offering unlimited access for a modest monthly fee. That company, which hemorrhaged money for more than a decade as an online service, hoped to make it up through advertising and e-commerce. Sound familiar? The three founding companies long ago gave up their stakes, and Prodigy Communications Corp., which is now a publicly traded company, is duking it out with the likes of AOL, MSN and MindSpring. And, yes, Prodigy is still losing money.

How things have changed. Not only can you get unlimited Internet service for less than $20 a month, it’s even possible to get free access using services such as NetZero and AltaVista Free Access if you’re willing to view advertising or do a little e-commerce on their sites. There are even services that pay you to surf the Web. CyberGold (https://www.cybergold.com) pays cash to people who click on their ads or shop in their online mall. IWon.com says it is giving away $1 million a month in cash prizes to people who use its search engine.

Of course, none of these companies is making a profit, but that doesn’t seem to matter in today’s Internet frenzy, any more than it did in the ‘70s and ‘80s when companies that are ghosts today thought they were onto something big--really big.

Well, they were, and the number of people now using the Internet proves it. So what if e-commerce companies lose money? They hope to eventually make it up in volume.

Hey, I’m a believer. After watching and using the Net for nearly 20 years, I am convinced that those early pioneers were onto something and that today’s entrepreneurs are onto something now. What we don’t know is when the profits will start rolling in and who will be around to collect them.

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Technology reports by Lawrence J. Magid can be heard at 1:48 p.m. weekdays on KNX-AM (1070). He can be reached at larry.magid@latimes.com. His Web site is at https://www.larrysworld.com.