Characteristics of The Internet
The Internet had no defined starting point. At the basis it is only the technical connection between computers over greater distances then an ordinary cable can provide. When was the first of these connections established?
On August the 30th 1969 the first Interface Message Processor (IMP) was installed at the UCLA in Los Angeles – being itself connected to the own mainframe. On October 1st of the same year the next IMP was prepared in Stanford and they both communicated over a simple protocol – Telnet. The „communication network“ had a fairly simple design. With the next IMP some simple form of the Network Control Protocol (NCP). The number of communication possibilities between three computers is exactly three – how boring.
With the communication between well-known partners over a network relevant information is being stored and can be recalled time delayed. This widens the flexibility and offers more timely independence to the partners. Communication may be of higher quality because the answers can be elaborated. The respective partner integrates the information in his work process and thus the efficiency of labor input may grow.
Let us summarize the advantages and characteristics of Internet so far:
1. The network is a connection between computers with own computing power.
2. Communication is time delayed.
In the year 1971 19 more IMPs were installed. Robert Kahn presented this network on an international conference and the success of the presentation was phenomenal. About one new IMP per month was connected to the so-called International Network Working Group (INWG). What impact has this growth of the network on the efficiency of communication?
For the sake of clarity let’s simplify the network to 2 by 3 knots. One can see that with this simple mini-nets 6 communication lines could be realized.
Another presentation of the same amount of participants in a transmission medium like radio, TV or newspaper leads to different considerations. Each new partner creates one new connection. The name says it: there is one central partner sending his information to the others. They have to be online at the same time and do not change their position from receiver to sender.
That is completely different if one abandons the transmission structure and connects the p
artners to a network. This transition is shown on the adjoining picture. It allows significantly more connections than transmisson media or isolated mini-nets. The communication possibilities between the same amount of partners sums up to 15. This simple consideration illustrates the growth potential of the Internet.1 If one just abandons from the constraint that all participants have to be known to each other or at least to a central administrator the Internet is born as an interaction medium. It allows the communication between unknown participants and their interaction.
The third specific advantage of the Internet is:
3. Interaction between unknown participants.
When new participators join the party the possibilities of communication are increasing overproportional. To be precise, the growth of the potential is an arithmetic function of second order. Every new participant has immediately connection to all other partners. If you ever wondered what the secret behind the enormous growth of value of Internet start ups like Ebay, Facebook, Google or Amazon was, here is one explanation. They all introduced interaction in their business cases.
The new potential of the Internet results from the multilateral connection and the low costs. The value of the Internet applications is actually not achieved by the connections alone, but by the transferred information, the content. Desisting from the very low storage costs the data is more or less exchanged at no charge. All content like text, picture, video or sound are only virtual until requested. They slumber in the data storage of the provider, might he be professional or private. Not until being demanded by a user, t
he virtual information gets alive – so to speak. Then it turns into a product or a service. One needs no storage, no transportation, even no production at all for gathering valuable information. The economists are speaking of very low transaction costs.
At the end the distributed know how facilitates even old economic processes and new ones as well. A very important and costly part of the production of goods and services are expended for coordination, organization and transaction. Division of labor demands know how to produce valuable goods, for the specialized know how of experts can only brought through information exchange to a fruitful whole. The new powerful information- and communication medium allows the improvement of every economic process.
Let us recapitulate and summarize. The main advantages of the Internet are derived from the characteristics as shown in the following picture:
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1) This was already explicated by Robert Metcalf (CEO 3Com). He was considering an even higher growth potential, because he was taking every communication possibility into account. Which means he calculated every direction, the sender and the receiver and gained exponential growth with this function.
