Ten Years of eCommerce

eCommerceKen Wasch is a fellow alum (Economics and International Relations) from Lehigh University and a law graduate of SUNY Buffalo in New York. After spending eight years as a senior attorney for the U.S. Department of Energy working on petroleum price regulation, Ken saw the light and established the Software Publishers Association (1984) which is now the Software & Information Industry Association. I have known Ken for more than half of his twenty-two years in the industry, so when he called to ask me to participate in a conference to celebrate an important milestone for eCommerce, it was hard to resist.

A handful of us joined with Tim Berners-Lee to start the World Wide Web Consortium at MIT in December 1994. None of us at the time foresaw today’s level or potential for eCommerce. Most of the focus at that time was on techniques for formatting web pages and on various other content related issues. Jim Clark, founder of Netscape, did see the eCommerce potential and he also realized one of the biggest inhibitors was the U.S. Government regulation of encryption, a key tool for making eCommerce secure. Jim and a handful of us started the Global Internet Project as a public policy group to gain more awareness about encryption and urge governments around the world to loosen the reigns. That effort was successful and use of encryption is no longer an inhibitor. (The inhibitor is insufficient Net Attitude to enable web sites to meet our needs).

There were many other complexities looming under the surface that could have dramatically stalled the growth of eCommerce. Collectively it was a hodgepodge of sticky issues — like non-U.S. countires that objected to the U.S. control over key elements of the Internet infrastructure — but the biggest issue was a lack of vision. There was no consistent framework for eCommerce that could enable businesses to move forward. One of the first of the Fortune 500 to put a stake in the ground was IBM Corporation where Lou Gerstner said in 1997 the web is not for surfing, it is for transactions — later named e-Business. The gamble being taken by IBM and many others was that the Internet would become internationally politicized and potentially regulated to a standstill. Fortunately, there was a person in a high place in the government that would help solve many of the tough issues and enable President Clinton to announce a “Framework for Global Electronic Commerce” in the summer of 1997. It was a huge accomplishment for which we should all be eternally grateful. The person who lead the effort was Ira Magaziner, a top aide at the White House. Ira is best known for his efforts to create a major American healthcare program. His effort got attacked from every political direction and eventually fell. Unlike healthcare, the Internet was not well understood by politicians and they stayed out of the way as Ira raised and solved many of the key issues. He then traveled around the world enlightening key government leaders. The rest is history. At the conference last week Ira modestly said the event was “a good reminder of how far we have come and of how much opportunity still remains”. Ken Wasch said “Electronic commerce has provided a significant engine for the growth of the global economy and has sparked the delivery of a multitude of innovative products and services.”

It was my privilege to serve on a panel moderated by Michael Mandel, chief economist of BusinessWeek. The other panelists were Stewart Baker, Assistant Secretary, Department of Homeland Security; Dan Burton, Senior Vice President, at Salesforce.com and former President of the Council on Competitiveness; Jamie Estrada, Assistant Secretary (Acting) at the U.S. Department of Commerce, and Ira Magaziner who is now Chairman of the Clinton Foundation. To set the stage for discussion, Michael announced the results of a poll of thought leaders in the industry in which they voted on the most significant “eCommerce Developments of the Last Decade”. The results are so commonplace to all of us that it is hard to believe that they are ten years or so old. No surprise, Google (Sept. 1998) came out on top. Number two was when broadband penetration of US Internet users reached 50% (June 2004). Third was eBay Auctions (Launched Sept. 1997). Fourth was Amazon.com (went public in May 1997). Fifth was Google Ad Words (2000) which enabled key word advertising. Sixth — Open Standards. Seven — WiFi. Eight – User-Generated Content (YouTube 2005). Ninth was iTunes (2001) and last but not least, the BlackBerry (1999). See the SIIA press release for more details on the top ten.
It was my privilege to give the wrap-up talk which I called “The Future of the Internet“. I asserted that the Internet has grown to it’s infancy and that we have so far only seen five percent of what the Internet has in store for our business and personal lives. The examples used were things often written about here in patrickWeb. A video of Ira Magaziner’s talk is here and a video of my closing speech is here.

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