August 17, 2000 was a major milestone for the Internet. You could argue it’s the day the Internet went mainstream, completing the transition from something computer science students used in college to something their parents would use to buy books and offbeat collectibles. It was the day Nielson announced that the Internet had reached half of US households, the magic 50 percent mark.
When was the Internet invented?
When was the Internet invented, and how long did it take to reach the general population? That sounds like an easy question. I see social media posts all the time that say “the Internet wasn’t invented yet.” I’d rather not be That Guy, but the Internet was invented earlier than most people think.
But when was it exactly? Some say 1969, when ARPAnet started connecting computers together over long distances. Others say 1974, when TCP/IP was first invented. Others would point to various milestones in the 1980s. The main point is, the Internet came into being gradually over time. And many of the milestones were surprisingly early, like the World Wide Web being proposed in 1989.
When ordinary people started using the Internet
When people started gaining access was also surprisingly early. On college campuses, faculty and students could get access in the 1980s. There was a phenomenon every September when incoming students came in and discovered the Internet. And then they had to learn how to behave online. That took a month or two and then things went back to normal.
The 1993 happened. The Internet started opening up and then we had the September That Never Ended.
I remember coming home from college during the 1993 holiday season and telling people there was this thing called the Internet that they’re going to want. There were still a lot of things you couldn’t do with it yet in 1993, but the potential was there. And around that time, Internet starter kits started turning up in computer stores.
And just short of seven years after the September That Never Ended, in August 2000, half of US households had Internet access.
The milestone of the Internet reaching 50% of US households
The rise of Internet usage unsurprisingly tracked with the rise of computer ownership. The next year, in 2001, the US Census Bureau reported that 51 percent of US homes were equipped with at least one computer.
From a marketing standpoint, the 50% milestone was when computers and the Internet moved into the late majority phase of marketing. Marketers generally divide adoption into four phases or archetypes, and we can apply them to the computer market very neatly.
Put another way, August 17, 2000 was the tipping point when, in the United States at least, using the Internet or being online went from being unusual to being expected.
I don’t think it’s a coincidence that this happened during the dotcom boom, and less than 6 months from its peak. Investors expected lots of revenue to come out of the Internet going mainstream. But while there was money to be made with the late majority buying computers and making purchases online, it was also a strong signal that the gravy train wasn’t going to last forever. The days of year over year growth were probably over.
And if you know the phases of adoption, it’s easy enough to predict the rise and fall of any technology. Here they are, in order:
Innovators
This is just 2.5 percent of the population. These were the people who bought a kit computer in the 1970s and may or may not have succeeded in assembling it and using it successfully. But they sensed computers were going to be a revolution and they wanted to be part of it. This group was also prone to keep going. Those who bought kit computers may not have been ready in 1977 to sign up for the waiting list to buy an Apple II, Commodore PET or Radio Shack TRS-80 in 1977, but they may very well have been an early purchaser of a 68000-based machine. They are also the type who would have built a PC out of off-the-shelf parts and run Linux on it in the early 1990s.
These are the people who like being on the cutting edge, and don’t mind at all if someone says sarcastically, “You must be a lot of fun at parties.”
I’m too young to have been in on the innovator phase when it came to small computers. Arguably, I barely missed the innovator phase with the Internet too, having started college in late 1993, the year of the Eternal September.
Early Adopters
This archetype is 13.5 percent of the population. This group doesn’t get on board quite as quickly as the innovators do, but they get in the game early. The 1977 computers sold well enough to push computer adoption into this phase, so the people who didn’t buy a 1977 computer right away probably fell into this category.
Together with the innovators, the early adopters act as evangelists, proving concepts and selling those concepts to the larger part of the market. While the IBM PC would have been introduced at this stage, it defined the next one. At this stage, millions of people were buying later-model Apple IIs, Commodore 64s, and other models that today we see as evolutionary dead ends. But as one who grew up with this technology, I remain fond of it.
When it comes to the Internet, I think I’m part of this phase as well. I got in the game early, having learned HTML in the mid 90s and having used Mosaic and Netscape. I was well aware of the Internet before 1993, but it was something that was out of reach, something we’d get to use when we got to college.
Early majority
This is when computing started to feel safe, standardized. Plenty of alternative platforms existed and even emerged during the early majority phase, but most of the early majority bought an IBM PC compatible of some fashion, and the best-selling line of IBM PC compatibles at this time was the Tandy 1000 series. At this phase, the market is starting to standardize and some of the early players had left. This stage lasts a long time, as it’s 34 percent of the population. The market reached this point sometime in the mid 1980s and stayed there until the summer of 2000.
But wait, didn’t the IBM PC sell 60 million units in the 1980s? Between it and the clones it did, but that was worldwide. Worldwide vs local sales, sales to businesses, and some people in these first three groups buying more than one computer combine to explain how 60 million IBM PC compatibles could sell and yet for nearly 25 years to pass between the Altair 8800 and computers and Internet access reaching 52 million households in the United States.
Amazon turned its first profitable quarter in 2001. At one time I attributed this to it allowing third party sellers, but I think volume had something to do with it too. The business model just didn’t work until this phase, and I think that’s why other dotcoms like Webvan and Pets.com didn’t make it. They were too early. This was also the point in time when scalping Beanie Babies on Ebay became viable.
Late majority
This group, also 34 percent of the population, really likes to play it safe. The late majority kicks in once half the market has adopted the technology.
The Late Majority is the group that was holding out for a clear winner, for prices to come down, or ideally both. In the computer market, this is pretty clearly the people who bought their first computer in the second half of 2000 or later. This group would have found the infamous “Never Obsolete” Emachine irresistible. Free after rebates, and inexpensive upgrades for life? Sign me up! Wait. Sign them up. Not me specifically.
It’s too bad Cyberrebate.com couldn’t find a way to stay in business long enough to reach this group.
Amazon started turning profits on a consistent basis in 2003, and I don’t think it’s a coincidence. The business model needed critical mass to work, and the Internet needed to be mainstream to have critical mass.
When the market reaches this point, it’s boom times, but the boom times are short-lived. That’s because the rapid growth period doesn’t last very long. The late majority doesn’t buy new computers to replace their old ones nearly as often as the other archetypes, and the group that comes after the late majority doesn’t fuel growth at all.
If you worked in the technology field in the 2000s and wondered why it seemed to lose so much momentum around mid-decade, this has something to do with it. The VCR experienced a similar phenomenon.
Laggards
This last group is 16.5 percent of the population. Some of this group ends up with a computer eventually but probably only uses it for a few things. Some of this group never does get one, and has no idea what they would do with one if they had one. My next door neighbor for nearly 20 years was in this category. Her son in law was an IT director for a large hospital chain, and she was happy that her son in law made a nice career, but she had no interest in having a computer herself.
I think a key difference between Apple and Microsoft is that Microsoft desperately wants to reach this group, and seems to think if they put enough training wheels on the printer setup, this next Windows build is going to be the one that gets people like my late neighbor to want a Windows 11 PC. Of course it doesn’t work, all it does is irritate people who’ve been using PCs for a long time and make them nostalgic for Windows 7 or XP. Apple completely ignores this segment and, counterintuitively, it’s why you’re more likely to see a laggard use an Apple device than a PC. Seeming desperate pushes disinterested people away, while seeming disinterested smells of confidence, which will make some percentage of disinterested people curious.
David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.
We were just a few years behind in the UK, with half of households getting Internet access in 2003. But the five years leading up to that point had seen an extraordinary rate of increase, as only 9 per cent of British households had Internet access in 1998.
I didn’t realise it at the time, but that period in the late 90s / 2000s was one of exceptional technological, social and economic change. I often think of “the age of the age of the smart phone” or “the age of social media” but we had that brief period of about a decade where the Internet was both mainstream and entirely desktop-based. Little did we know what was about to hit us…