The demise of the classic online service CompuServe on July 1 is more testimony about the inescapable movement of time and the ever-shifting positions of the heavyweights in the computer industry.
In its day, CompuServe ruled the online roost. Founded in 1969 before the advent of the personal computer revolution, it was the most popular online service in the 1980s; it continued to be hugely important into the mid-1990s, providing reams of information as well as ample opportunity to communicate.
CompuServe's business model, however, relied on an hourly rate system, and it was done in by services that charged a flat monthly rate, primarily America Online (AOL), which wound up buying CompuServe in 1998.
AOL, in turn, has seen its fortunes rise and fall as well. Founded in 1983, it was everyman's online service in the 1990s, providing an easy portal to the online world for those without a lot of technical expertise.
AOL reached its zenith just as it was merging with Time Warner in 2001 and just as the dot-com bubble was in the process of bursting, with online properties such as AOL losing a great deal of their previous value. Time Warner, which had changed its name to AOL Time Warner with the merger, lost $99 billion in 2002; at the time, it was the largest loss ever reported by a U.S. company. It changed its name back to Time Warner the following year.
Time Warner announced plans this past May to spin out AOL, ending its relationship with it. AOL, infamous for its marketing tactic of littering mailboxes with unsolicited CD-ROMs containing its software, was done in primarily by broadband internet providers.
The leading broadband provider and early broadband innovator is Comcast, initially a cable TV company founded in 1963 that began offering high-speed internet service in 1994. Following Comcast in broadband internet market share, according to Strategy Analytics, are AT&T, Verizon, and Time Warner Cable. Comcast has been increasing the speed offered to subscribers who have standard home connections, with top downstream speeds now at 50 megabits per second and top upstream speeds of 10 megabits per second.
Companies that started out offering only cable TV, such as Comcast, use coaxial cable. These companies are currently in pitched competition with companies that started out offering only telephone service but now use fiber optic cable, such as Verizon. Both types of providers are vigorously expanding into the other's turf, increasingly offering internet, TV, and phone service as a bundle. Time will tell who wins this battle.
Another paradigm-shifting battle is currently being fought with computer operating systems. The big news here is the just-announced entry of internet search giant Google into the operating system space. This move would put Google into even more direct competition with software giant Microsoft.
On July 7, Google announced plans to develop Google Chrome OS, an open source, Linux-based operating system, though it likely won't be ready until late 2010 at the earliest. Google is currently competing against Microsoft with its new web browser, Google Chrome, released in December 2008, and with its online suite of application programs, Google Docs.
Google Docs includes a word processor, spreadsheet, presentation, and form-creation program, allowing users to create and edit documents online, for free, without having to install programs on their PCs. In contrast, the current version of Microsoft Office Standard Edition typically sells for between $300 and $400.
On July 13, in response to Google's announcement, Microsoft announced plans to offer a free online version of Office, directly competing with Google Docs. It's expected to be available sometime next year. What's not clear is the effect it will have on the billions of dollars Microsoft currently earns annually on its worldwide sales of Office.
In turn, Microsoft's rise to the top of the software heap has come at the expense of others. In their day, WordPerfect used to be the word processing market leader, Lotus 1-2-3 the spreadsheet leader, and dBase the database leader.
Microsoft's actions also led to the marginalization of OS/2, an operating system developed jointly by IBM and Microsoft and designed to be the successor of DOS, a role that Windows, developed solely by Microsoft, took over. OS/2 still lives on, partly, as the operating system of some automated teller machines.
IBM, which transformed personal computers from toys for hobbyists into legitimate office machines with the introduction of the first IBM PC in 1981, has affected the biggest shifts of position in the personal computer industry. IBM left the PC market completely in 2005, selling its PC division to the Chinese company Lenovo.