Apple, Amazon, eBay, RIM, And Google Lauded For E-Commerce Innovation

Apple's iTunes, Amazon, eBay, RIM's BlackBerry, and Google -- both for search and AdWords -- rank among the 10 most significant developments in e-commerce over the past decade, the Software & Information Industry Association (SIIA) said on Wednesday.

The Washington, D.C.-based industry trade group also included broadband penetration, open standards (especially HTML), Wi-Fi, and user-generated content on its list. The list is intended to mark 10 years since the Clinton administration released the "Framework for Global Electronic Commerce," a policy document that aimed to foster business and consumer confidence in the Internet.

"So many choices that today seem so obvious, were not at all obvious back then," said Ken Wasch, president of SIIA. "Ira Magaziner had to fight off the International Telecommunications Union that thought it ought to regulate the Internet. There were some people who argued for an FCC-like regulatory structure. The only regulatory structure was ICANN, which, for all of its problems, worked."

At least as interesting as the 10 developments singled out by the SIIA are some of the ones that didn't make the cut. The passage of the Digital Millennium Copyright Act (DMCA), voice over IP, the founding of Salesforce.com, the Apache Web server, and the plummeting cost of digital storage are among the innovations and events that the SIIA's 75 "policy and business wonks" passed over, said Ken Wasch, president of SIIA.

Although Wasch praised the way the government's policy helped the Internet develop, he expressed disappointment that not everything worked out as well as was hoped at the time. "There was more of a belief back then that somehow the Internet would be a democratizing force," he said. "And that has proven not to be the case."

Beyond the starry-eyed optimism of Internet boosters in the mid-90s that overestimated technology's capacity to change entrenched cultures, the Internet's failure as a force for democratization can be laid at the feet of prominent Internet companies such as Google, Microsoft, and Yahoo, which punted when confronted by anti-democratic regimes. Rather than stand up for the principles they espoused in the U.S., Google, Microsoft, and Yahoo asked the U.S. government to stand up for them. However, such failure to rise to the occasion seems positively heroic when compared to the technology vendors that arm anti-democratic regimes with censorship tools. Even so, it is Google that the SIIA places at the top of its list, for changing the Internet. "Google did more to fundamentally change the way we use the Internet than any other event in the last 10 years," said the SIIA. "The simple search engine that began with a couple of smart guys is now used by 30% of Internet users to help find precisely what we're looking for online, map our world, create simple yet highly targeted advertisements, and much more."

Netscape and the U.S. Department of Justice's antitrust case against Microsoft are not mentioned, but clearly deserve some recognition for turning the Web browser into the weapon Google would master. And honorable mention should go to Sun, for Java and for enriching company co-founder Andy Bechtolsheim enough that he could afford to invest $100,000 in Google in 1998.

The second most significant e-commerce development goes to the month of June 2004, when U.S. broadband penetration reached 50%. The SIIA expects that by the end of 2007, U.S. broadband penetration will reach 90%.

Never mind that a Pew Internet & American Life report last month said that 47% of U.S. adults have a broadband connection at home or that a Communications Workers of America report also issued in June ranked the U.S. 16th in the world in terms of broadband deployment and availability. (Wasch didn't have an immediate explanation for the broadband penetration discrepancy other than to postulate that the SIIA's figures included workplace broadband.)

eBay takes the third spot on the SIIA list for "[showing] us that the Internet could be used to reach massive national -- and even global -- markets better and faster than ever before."

The fact that fraudsters took that lesson and ran with it doesn't appear to have diminished eBay's ranking.

Amazon's place at number four reflects the company's pioneering work selling things online. "Amazon showed the world what an online store would look like and made online shopping popular through its ease of use and wide selection," said the SIIA.

Indeed, the world's biggest bookstore has become something else entirely, and Amazon is now reinventing itself as a provider of computing infrastructure. Tune in 10 years hence to see how that worked out.

Google also is recognized for its AdWords search advertising system, which ranks fifth on the SIIA list. "Keyword advertising has become the biggest online advertising vehicle, representing 40% market share and $6.8 billion in revenue," said the SIIA. "Keyword ads are the simplest and most cost-effective mechanism to reach targeted audiences, affordable to even the smallest business."

The SIIA makes no mention of entrepreneur Bill Gross, who in 1998 launched GoTo.com, the pioneering paid search company that would change its name to Overture and be bought by Yahoo. It's also worth noting that AdWords and its companion program AdSense, along with other Internet ad services, enrich Web spammers and have incentivized the creation of so much junk information that you need a search engine just to find anything online. In the number six slot, the SIIA lauds open standards, specifically HTML 4.0. "The standards for the Web embodied in HTML are overseen by the World Wide Web Consortium, which is not controlled by any company or government," said the SIIA. "The formats are open, well documented, and designed to work with different software and hardware. It has probably been the most influential and important data standard in the history of publishing. Open standards can grow an entire industry, leaving more room and more opportunity for everyone."

Some credit too should go to prominent counter-examples, such as France's closed Minitel network.

The development and deployment of Wi-Fi technology rank seventh on the list. As the SIIA explains, "the development of Wi-Fi removed the limitations of desktops and cables and shifted focus toward mobile solutions. Wireless Internet enabled road warriors to be connected anywhere."

At a broader level, the success of wireless technology may yet make the broadband market, currently dominated by major telephone and cable companies, more competitive and more open. On the other hand, Wi-Fi has also proven to be an appealing way to steal data, as the theft of some 45 million credit and debit card numbers last year from TJX Companies showed.

User-generated content, and YouTube in particular, are ranked eighth. "Right now it is impossible to say what the full ramifications of the 'citizen journalist' era will be -- but the dramatic impact of YouTube tells us more than any other recent development," said the SIIA. "At first a playground for kids with video cameras, YouTube is now the embodiment of Web 2.0. It is a must-be-seen place for presidential candidates, a battleground in the copyright wars, a vital distribution point for major media -- and most of all, a place where anyone... absolutely anyone... can deliver a message to the world."

And that's why jihadists love it.

iTunes comes in ninth on the list, irrespective of the apparent contradiction between the SIIA's recognition of open standards and the decidedly insular iTunes experience. "In the aftermath of Napster and the P2P battles, iTunes legitimized the digital music industry, revolutionizing the music industry," observed the SIIA.

Though it didn't make the final cut, the DMCA should have been recognized alongside YouTube and iTunes. The law's safe harbor provision made it possible for sites to host copyrighted content without liability for their users' actions and its prohibition on breaking digital locks has prevented Apple's competitors from engineering iPod-compatible systems of their own.

Last but not least, RIM's BlackBerry takes spot number 10. "By having the Web in the palm of your hand, Internet-connected devices enable e-commerce anywhere, anytime," the SIIA said.

As to whether always-on shopping is a blessing or a curse, we report, you decide.