Boom 2.0   

The Internet is experiencing a renaissance of functionality and excitement, and even better things are coming. But expect to pay for the fun

The Internet is really only about 10 years old. A global computer network of sorts existed before then but, as a consumer, business and cultural phenomenon, the Internet really came into being in the mid-'90s. Netscape Navigator, Linux, Hotmail and Windows 95 all launched during this period, and the era was capped in 1997 when Tim Berners-Lee was recognized by the Institute of Physics for inventing the World Wide Web.
This explosion in consumer-level computing tools created a groundswell of online activity and innovation that has not been seen since. Or not, at least, until this year.
"Ten years ago there was a spectacular rise in the number of computers that were connected to the Internet. The rate of change was remarkable," said David Jacobson, director of technology in the advisory services group at PricewaterhouseCoopers (PwC) in Toronto. "That initial Internet Big Bang was a time of great activity but most people still found it very intimidating. Companies, for example, had consultants come in to explain how to get connected and how to do e-mail. It was still in the formative stage.
"What is happening now is a totally new phenomenon, again, in that it is not simply an expansion of the Internet as we know it-it is a time of emerging functionality," he said.
Yahoo! is seeing the same trend, said Bradley Horowitz, the company's vice-president of product strategy in Sunnyvale, Calif. "There is a renaissance happening right now. It is a magic confluence of tools, access, familiarity and content, and it is changing the world."
These new tools and content, said PwC's Jacobson, are finding expression in online collaboration and communication, driving an explosion of wikis, blogs and multi-player online games. "This is not merely accessing information, not merely constructing a Web site, this is actual participation, with anyone, anywhere. So we are seeing online karaoke, in which you can actually karaoke with someone in Japan. This is a new sociological phenomenon, often called Web 2.0, in which the key is actually the partici
patory nature of the Web."
    Dave Carter experienced the past decade from within the industry: in 1995 he shepherded the launch of Windows 95 at Microsoft Canada and today is the chief technology officer at enterprise blog provider iUpload in Burlington, Ont. This second online wave, he said, is generated by collaboration tools that are finally easy enough for anyone to use. "Now that everyone can have a voice, the Internet has gone from a broadcast to a conversation, and all of the projects we work on today centre on drawing more people into the conversation." 
    Experts point to a number of specific developments to bolster their contention that we are experiencing the second great waveof online creativity.

Web-based games

Online games, and specifically the quasi-economies built around them, are of increasing social and business significance, according to both PwC's Jacobson and Jerry Brown, director of the advisory entertainment and media practice in Toronto. The two point to Sony's EverQuest II as a perfect example. In the online multi-player role-playing game, characters develop combat and trade experience, acquire items and amass online funds. Not content to simply live in the game, players began to buy and sell these attributes for cash in the real world and sell game elements on eBay, pushing Sony to establish an official auction trading system. 
    The wide appeal of the game prompted other real-world businesses to cash in. "If you get hungry while you're playing EverQuest II, you can type in '/pizza' and an order form pops up. Then, a little later, the pizza is delivered to your front door," Jacobson said. "The implications of this model - for retail, for services, for advertising - are remarkable. 
    "This is another way in which the Internet is revolutionizing the way we think about business."
Indeed, gamers are a marketing dream, according to Brown. "These games create global communities of interest, independent of geography or ethnicity, that a company can market to, so it is highly significant that Microsoft recently bought a company that can place ads in those games. You now have a community of interest that you would never have identified in any other way."

New search
The Internet's two heaviest hitters, Google and Yahoo!, built their empires on search but search, too, is changing. 
    "The premise of a Web search is that you connect a query to an existing Web page," said Yahoo!'s Horowitz. That means a query for William Shatner will return pages about Boston Legal, Star Trek and high-fibre diets. 
    “But traditional search is a limited concept. Suppose you want to know ‘Where’s a good place to get a sandwich in downtown Toronto when I only have 20 minutes?’ That type of query would be very hard to answer in a traditional Web search.” 
    So Yahoo! is proposing a social search approach, based more on human response than on Web site catalogues. Its Yahoo! Answers service invites people to post questions that others can then answer. “You put the question out there and tens of thousands of Yahoo! users could answer it,” Horowitz said. 
    This is especially useful for communities that do not speak English, by far the dominant language of the Web. “Korea is one of the world’s most wired and sophisticated populations, yet there are not many online documents in Korean. If you speak Korean and you want to know how many vertebrae there are in a giraffe’s neck, for example, there is no document that answers that question. So what they did was ask the community to create those pages. In this case, someone who is a zoologist or who has some specialized knowledge can post the answer in Korean. The community can monitor this process and then, when the appropriate answer is created, that query is closed and there is now an answer in Korean.”

Pay to play

Today, Internet access is essentially an all-you-can-eat deal: pay a monthly fee, get fast and unfettered access. That means a successful company can generate millions of dollars in online revenue and the Internet providers — the companies that actually built and maintain the Internet — do not see any incremental revenue. Consider Apple’s iTunes: as of February the site had sold one billion songs and 15 million videos. That business exists solely online, but little of its riches flow to the big U.S. telecom companies. 
    “There have been massive investments made in the Internet and I am not sure the return (for the providers) has always been there,” said PwC’s Brown. “The providers would obviously like to change that model, and that makes sense: if you want the major companies to continue to expand the capabilities of the Internet they have to see a return on that investment.” 
    Which means, prepare to pay. In the near future, consumers may be hit with increased Internet access bills or, more likely, special fees for video downloads or Internet-based voice traffic. “I would be surprised if there were not changes coming, but how will that happen? I don’t know,” Brown said. “The transporters could try to simply take advertising dollars, but I don’t think that will work. They have to figure out how to add value. So, the success of this will revolve around whether consumers see value [from higher prices] or if it is just viewed as a money grab. 
    “In either case, people should expect to pay,” he said. 
    If the last 10 years have been about anything, it’s been the increasing realization that the Internet is a valuable platform for both fun and business, and with that comes the reality that nothing is free. “I am afraid Adam Smith had it fundamentally right — giving things away only lasts for so long,” Brown said. “It may turn out that Web 1.0 is a fixed-price model, and if you want Web 2.0 functionality you will have to pay for it.”