From birth to bubble to bust

e commerce, digital marketplace, digital, online shopping, digital marketing,
The Digital Marketplace

Digital Marketplace Evolution

The emergence of e-commerce can be traced initially to the development of computer technology that could support large-scale transmission of data. The story starts with the evolution of the Internet the first attempt at harnessing Big Data. In the early 1960’s attempts were being made to link up large mainframe computers between college campuses in the USA. Initially using the existing telephone networks, they soon found it to be slow and uneconomical. Packet switching was devised to make it more efficient. It digitized the message, divided it into packets, sent it via routers (interconnector commuters), who found the shortest route to the destination wherein it was for reconfigured.

With greater demand, it became apparent that a standard set of guidelines was needed to operate a universal system. In the 1970’s TCP/IP (Transmission Control Protocol/Internet Protocol) was developed. TCP established protocols for the assembly, distribution, and reassembly of packets between computers, while the IP was responsible for delivery of the packet to the correct internet address. If you put together TCP and IP, it resembles three little packages, an addressed IP package, which contains a TCP package, and this has the message which was originally intended but has been split into different sections or packages.

The institutionalization of the Internet came in the 1980’s with the US’s Department of Defence selecting TCP/IP as their communications protocol, due to its popularity over other wide area computer network protocols. This was the beginning of the internet we know today. Other industries and businesses were also using computer networks at this time, for, EFT electronic funds transfer, EDI electronic data interchange, IOS inter-organizational systems, and CRSs which became GDSs for the travel industry.  About the same time, IBM and Apple among others were in development of the personal computer, novel at the time, but within ten years PC ownership was commonplace.

A major technological advance, in 1989, was from Tim Berners Lee, who developed the World Wide Web using a common language called HTML. Unpopular at first; it went on to be the most used application on the internet.  In 1994 Netscape was launched this was the first commercial web browser. Banner adverts started to appear on WebPages from late 1994 and this is recognized as the beginning of e-commerce and the commercialisation of the net. 

Initially, the Internet was characterized by slow dial-up connections and annoying online billboards and limited interface.  Netscape’s  point-and-click Web browser opened the door to the billion-dollar revenues e-tailers enjoy today. From 1995 to 2001 thousands of dot-com companies were set up with billions of dollars being pumped into them. The internet fast became a gold rush of sorts with everyone trying to get onboard. This was the first wave for         e-commerce, in this time hundreds of tech companies began with unlimited funds from Wall Street this was the dot-com bubble. When it went bust in the crashes of 2000 -02, it almost took down the global economy. However, the bust was a good teacher for those that survived and more cautious and business-like approach ensued, but many of the early innovators in e-commerce have gone to the wall.

It is interesting to see those that failed but I think it is almost as interesting to see who has survived. The two standouts are E-Bay and Amazon. Both continue to flourish and both have striven to diversify into more traditional markets. Perhaps they have learned the lessons of the dot-com bubble. But others have not, even now technology companies are increasingly going bust, taking vast fortunes with them  in the process. Today however it is just not as newsworthy as it was in 2001.  But what is reminiscent of those times is the appetite for investors to ride the wave of the next big tech innovation. Good luck to them all.