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This is a story about the founders of Amazon and eBay and how they turned their businesses from nothing into something everyone wanted to be a part of. Even back in the day, we humans have always been obsessed with shopping, be it clothes, furniture or even groceries, and it is exactly this activity that led to the imminent evolution of capitalism. But then came a new phase of capitalism and this new phase, ushered in by a revolutionizing technology – the World Wide Web, Amazon and eBay, changed the way we buy and sell.

Amazon and eBay first emerged on the market in the 1990s. Amazon was born in a garage in suburban Seattle and it was created by a man named Jeff Bezos. Bezos started out on Wall Street in the early 90s and was known as a “spreadsheet junkie”. Bezos had an idea, one that revolutionized the way we do business. His idea was online shopping. He created a list of potential products to be sold and books were first on his list. He dreamt of creating a place where people could look up book titles and buy them without the hassle of taking a trip out just to get it. His dream was to create the world’s largest online library, and he succeeded. Amazon went live in the summer of 1995. Around the same time, the founder of eBay, Pierre Omidyar, came up with a similar idea. His plan was to construct an online auction place for the general public. This project was later dubbed, eBay and was launched in September of 1995.

Both Bezos and Omidyar thought of the web as a place to do business and the moment they went live, they were an instant success. 30 days after Amazon was launched, the site shipped books to 45 different countries and in all 50 U.S. States, while Omidyar earned thousands of dollars in fees in the span of a few months. Both companies had explosive growths. Things were looking up for both Amazon and eBay. But little do they know, their successes were short-lived. History shows us, time after time, where there is a breakthrough in technology, there will be consequences. To illustrate my point, an advance in technology results in a large number of risky startups. Investors will dash to lay their hands on the latest piece of technology, this in return causes bankruptcies, foreclosures and stock market emulations.

Amazon’s IPO took place in the year 1997 and back then, it had little or no revenue and was not earning any profits. Regardless, Bezos would still lower the book prices whenever he got the chance. His argument for this being, and I quote,

Profits could and should be sacrificed temporarily in favor of rapid growth.

It wasn’t that profits weren’t important, it just wasn’t his priority at that time. Bezos’ marketing strategy could be expressed in three simple words – get, big, fast. But for this strategy to work, Amazon needed their customers to trust them with their credit card numbers. This problem was later solved with an invention by some mathematicians who go by the names Diffie, Hellman and Merkle. The mathematician trio introduced public key cryptography, which in time became vital in secure e-commerce.

On the other hand, Omidyar too was having problems of his own. eBay was scheduled to go live in September 1998, but nobody, especially those on Wall Street, took him or his business seriously. So, the reached out for help and Meg Whitman, marketer at World Disney and top executive at Hasbro, was the woman for the job.

Both Amazon and eBay had yet again managed to come out on top. eBay’s stock went through the roof on the same day they got their IPO, while Amazon’s shares doubled in the span of just a few weeks, and that was but the beginning of the crazed bubble.

Amazon and eBay got insanely popular, which resulted in imitators and sites like Razorfish, Pets.co and Loudey emerged on the market. The minds behind these sites, however, had no strategy or basics of economics, but they still manage to round-up enthusiasts and/or investors. The reason for this being, people were willing to bet and they were willing to throw out a couple of million just so they wouldn’t miss out on the big score.

A lot of e-commerce companies were fundamentally unsound. But this wasn’t necessarily a good reason not to buy their stocks – Henry Blodget

By that time, it was blatant that we were living in a speculative bubble and after realizing that the overall economy was close to overheating, Alan Greenspan, Chairman of the Federal Reserve Bank took matters into his own hands. Wall Street too started getting more sensible. But it was too late. The stock market crashed, people got angry and throughout everything, approximately 300 trillion was lost. It was the biggest collapse in the history of the stock market and people referred it as Black Friday. Many big companies went out of business, Amazon and eBay however survived. They prevailed because they both understood the importance of the masses.

We set a new standard for customer service – Jeff Bezos

It’s all about the empowering people, regular people, to use the tools in a way that they see fit – Pierre Omidyar

Some people see the bubble as a bad thing, to which the Chairman of Intel disagreed.

what this bubble craze did was draw untold sums of billions of dollars into building out the Internet infrastructure. Everything from fiber optic cable to Amazon’s customer database and while that infrastructure would probably have been built anyway, it happened over 5 years instead of 15 – Chairman of Intel

In the span of a few years, we have gone through a wave of innovation, financial mania and a horrible stock market crash and the companies that suffered from the crash acted as a guideline to make the newer ones more sustainable. Since then, new classes of companies, such as YouTube, Digg and Facebook have materialized. Take YouTube for instance. YouTube was founded by Chad HurleySteve Chen and Jawed Karim and like Amazon and eBay, it was started in a garage. When it went live, the company encountered rapid growth within its first few months. As of 4th April 2006, Venture firm Sequoia Capital invested a total of 11.5 million dollars into the company and a day after that, Judson Laipply uploaded a video titled “The Evolution of Dance” and it became the most popular clip in YouTube history, with a combining total of approximately 131 million views. After that, YouTube continued gaining popularity and today, YouTube is localized in 43 countries and across 60 languages, it gets over 800 million visitors each month and has 72 hours of video uploads every 1 minute.

References

http://www.liveleak.com/view?i=06f_1220127715

http://en.wikipedia.org/wiki/History_of_YouTube

http://www.fastcompany.com/1514469/brief-impactful-history-youtube

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The invention of the World Wide Web by Tim Berners-Lee brought upon other web browsers such as ViolaWWW, Line Mode Browser, Erwise and so forth. These browsers, however, were incredibly boring to look at and required the aid of external applications just so that its multimedia content could be accessed. Besides that, the Internet back then was a tool for academics, scientists and researchers and consisted of line after line of text. It lacked imagery and material. There was nothing worth finding and nothing to find it.

Then came along a computer science student from the University of Illinois named Marc Andreesen who had a plan to revolutionize the Internet and turn it into something people would use in their daily lives. So one day, he and a group of enthusiasts worked on making the Internet more accessible by adding graphics, audio and video capabilities. Together, they came up with the world’s first graphical web browser, otherwise known as Mosaic. The browser was launched in the fall of 1993 and was downloadable free of charge. Mosaic went viral. It had gone, and I quote,

from a toy for geeks and a tool for scientists, to a bona fide mass medium.

But for Mosaic to go worldwide, it needed funding and it needed lots of it. James H. Clark, founder of Silicon graphics came to their rescue. After hearing news about Mosaic and its success, James personally reached out to Marc and insisted they start a software company together. After a ton of agreements and paper signing, James and Marc then went on a recruiting spree and in the summer of 1994, James and Marc had launched Netscape, the fastest growing software company the world had ever seen.

After months of nonstop coding Netscape finally launched their new browser called Navigator. Navigator, like Mosaic, was a success. Netscape’s Navigator had revolutionized the Internet and this drove Bill Gates, CEO of Microsoft at that time, up the wall. This was where Bill Gates finally recognized the importance of the web. He then set out to correct the mistake he had made, his mistake being him undermining Netscape.

In 1995, Navigator was a huge hit. It’s importance was compared to TV and print media. Netscape was at the peak of their success and Microsoft was ready to go to extreme lengths to bury them. Microsoft was ruthless and relentless. After hearing Marc Andreesen, co-founder of Netscape talk trash about Microsoft, Gates rounded up his best troops and prepared for war. He fought back with his very own, free of charge, web browser, Internet ExplorerGates had a plan and it was to analyze and imitate Netscape’s every move. On top of that, he had his team of qualified salesmen stop PC manufacturers from installing anything other than Internet Explorer on the windows platform. This caused Netscape to lose a big fraction of its revenue and eventually the company itself.

By September of 1997, the browser wars were over. Microsoft was once again back on top and given complete control of the software platform. However, that’s not the end of the story. The war might have been over for Netscape, but for Microsoft, it was merely the beginning. Microsoft had itself a new rival – the U.S. Department of Justice. In the year 1998, Microsoft was accused of using its windows monopoly to prevent consumers from accessing Netscape’s products.

It doesn’t help the consumers, it doesn’t help Netscape,  the only one who benefits from it is Microsoft – Anti-Trust Lawyer, Gary Reback

Bill Gates was found guilty soon after the court hearing begun and was forced to step down as CEO of Microsoft. Since then, many other web browsers  had emerged on the market. One of the many being the famous Mozilla Firefox. Firefox is a byproduct of Netscape. It was named after the original code name for Netscape’s browserAfter Microsoft’s historical win, they decided to divert their attention and focus on other things while Firefox has been gradually improving itself. Now, all the hard work over the years had paid off as Firefox is, and has been for a while, now viewed as technically superior to current versions of Internet Explorer. According to the data collected using NetApplications, Firefox beat Microsoft by getting almost twice as much usage in half the time.

As of March 26, Firefox 4 was seeing a 3.64 percent share of browser usage after only being available for 5 days. IE9, which launched just a week earlier had 1.78 percent after 12 days – NBC News

Conclusively, the browser wars is an ongoing and never-ending battle. Question is, which browser will revolutionize the Internet we know today? One thing we can be sure of is that, as of now, the reign of Microsoft is over.

References

http://www.liveleak.com/view?i=f7d_1220125458

http://en.wikipedia.org/wiki/Browser_wars

http://www.nethistory.info/History%20of%20the%20Internet/browserwars.html

https://freedom-to-tinker.com/blog/felten/microsoft-case-second-browser-war/

http://www.nbcnews.com/technology/technolog/browser-wars-update-firefox-4-slaughtering-internet-explorer-9-124228