Wednesday, April 06, 2005

PaleoISPs, Walled Gardens, and Adoption Rates

I came across an interesting historical nugget today. In September of 1988 the General Manager of GEnie (does anyone out there remember GEnie?), in a speech to the Electronic Networking Association, cited a prediction that " the year 2000, it is estimated that 50 percent of the U.S. population will be using videotex services on at least an occasional basis."

What I found interesting was that the timing was pretty close - Harris Interactive's surveys of internet usage, as cited by, show the 50% threshold being crossed some time in 1999, with 63% online as of 2000 - but the services were so wrong. So wrong that the spelling checker in Microsoft Word doesn't even recognize the word "videotex".

Back in the pre-WWW days of the late 80's and early 90's, companies like GEnie, CompuServe, Prodigy, and The Source provided online information services in closed communities - what today are referred to as walled gardens. Then came the Web and the ability for anyone, anywhere, to provide information, applications, and services. Instead of a service provider deciding what content, information, applications, services would be offered to the market, anything that someone thought would be useful could be offered to the market - and the market could decide what would succeed and what wouldn't.

And a small group of people will never be as good at identifying what ideas will be useful to the market as will a very large group of people with the ability to try anything.

The PaleoISPs are largely gone - CompuServe survives as a part of AOL, and Prodigy's name lingers in the SBC Yahoo domain names; The Source was bought and dismembered by CompuServe, and GEnie was bought and later shut down by IDT. Meanwhile, somewhere on the order of 75% of Americans have home internet access.

Lessons for VoIP providers are left (for now) as an excercise for the reader.