By Walter Isaacson.

This article was first published in the Aprl 2015 issue of Acuity magazine. 

As the web was taking off in 1993–94, I was the editor of new media for Time Inc, in charge of the magazine company’s internet strategy.

Initially we had made deals with the dial-up online services, such as AOL, CompuServe, and Prodigy. We supplied our content, marketed their services to our subscribers, and moderated chat rooms and bulletin boards that built up communities of members. For that we were able to command between US$1m and US$2m in annual royalties.

When the open internet became an alternative to these proprietary online services, it seemed to offer an opportunity to take control of our own destiny and subscribers.

At the April 1994 National Magazine Awards lunch, I had a conversation with Louis Rossetto, the editor and founder of Wired, about which of the emerging internet protocols and finding tools – Gopher, Archie, FTP, the Web – might be best to use. He suggested that the best option was the web because of the neat graphic capabilities being built into browsers such as Mosaic.

In October 1994 both HotWired and a collection of Time Inc websites launched. At Time Inc we experimented with using our established brands – Time, People, Life, Fortune, Sports Illustrated – as well as creating a new portal named Pathfinder. We also conjured up new brands, ranging from the Virtual Garden to the Netly News.

Initially, we planned to charge a small fee or subscription, but Madison Avenue ad buyers were so enthralled by the new medium that they flocked to our building offering to buy the banner ads we had developed for our sites. Thus we and other journalism enterprises decided that it was best to make our content free and garner as many eyeballs as we could for eager advertisers.

Unsustainable business model

It turned out not to be a sustainable business model. The number of websites, and thus the supply of slots for ads, went up exponentially every few months but the total amount of advertising dollars remained relatively flat.

That meant advertising rates eventually tumbled. It was also not an ethically healthy model; it encouraged journalists to cater primarily to the desires of their advertisers rather than the needs of their readers. By then, however, consumers had been conditioned to believe that content should be free. It took two decades to start trying to put that genie back in the bottle.

In the late 1990s [world wide web developer] Tim Berners-Lee tried to develop a micropayments system for the web through the World Wide Web Consortium (W3C), which he headed. The idea was to devise a way to embed in a web page the information needed to handle a small payment, which would allow different “electronic wallet” services to be created by banks or entrepreneurs. It was never implemented, partly because of the changing complexity of banking regulations.

“When we started, the first thing we tried to do was enable small payments to people who posted content,” [Mosaic co-author Marc] developer Andreessen explained. “But we didn’t have the resources at the University of Illinois to implement that. The credit card systems and banking system made it impossible. We tried hard, but it was so painful to deal with those guys. It was cosmically painful.”

In 2013, Berners-Lee began reviving some of the activities of the W3C’s Micropayments Markup Working Group.

“We are looking at micropayment protocols again,” he said. “It would make the web a very different place. It might be really enabling. Certainly the ability to pay for a good article or song could support more people who write things or make music.”

Bitcoin and other cryptocurrencies

Andreessen said he hoped that bitcoin, a digital currency and peer-to-peer payment system created in 2009, might turn out to be a model for better payment systems.

“If I had a time machine and could go back to 1993, one thing I’d do for sure would be to build in bitcoin or some similar form of cryptocurrency.”

Bitcoin and other cryptocurrencies incorporate mathematically coded encryption techniques and other principles of cryptography to create a secure currency that is not centrally controlled.

We at Time Inc and other media companies made one other mistake, I think: we abandoned our focus on creating community after we settled into the web in the mid-1990s.

On our AOL and CompuServe sites, much of our effort had been dedicated to creating communities with our users. One of the early denizens of [pioneering virtual community] The WELL, Tom Mandel, was hired to moderate Time’s bulletin boards and emcee our chat rooms. Posting articles from the magazine was secondary to creating a sense of social connection and community among our users.

When we migrated to the web in 1994, we initially tried to replicate that approach. We created bulletin boards and chat groups on Pathfinder and pushed our engineers to replicate AOL’s simple discussion threads.

“If I had a time machine and could go back to 1993, one thing I’d do for sure would be to build in bitcoin or some similar form of cryptocurrency.”

But as time went on, we began to pay more attention to publishing our own stories online rather than creating user communities or enabling user-generated content.

We and other media companies repurposed our print publications into web pages to be passively consumed by our readers, and we relegated the discussions to a string of reader comments at the bottom of the page. These were often unmoderated rants and blather that few people, including us, ever read.

Unlike the Usenet newsgroups or The WELL or AOL, the focus was not on discussions and communities and content created by users. Instead, the web became a publishing platform featuring old wine – the type of content you could find in print publications – being poured into new bottles. It was like the early days of television, when the offerings were nothing more than radio shows with pictures. Thus we failed to thrive.

Fortunately, the street finds its own uses for things, and new forms of media soon arose to take advantage of the new technology. Led by the growth of blogs and wikis, both of which emerged in the mid-1990s, a revitalised web 2.0 arose that allowed users to collaborate, interact, form communities, and generate their own content.

This is an extract from The Innovators: How a Group of Inventors, Hackers, Geniuses and Geeks Created the Digital Revolution by Walter Isaacson (published by Simon and Schuster).

This article was first published in the Aprl 2015 issue of Acuity magazine.