The Business Lessons Of The 19th Century Internet

This worldwide communications network ushered in the first electronic business transactions, accelerating commerce beyond imagination. Businessmen complained about how this new medium forced them to sell goods and set prices 24 hours a day, every day, leaving them no time to plan or even rest.

The entrepreneurs that helped set up and exploit this global e-commerce network were amassing wealth beyond their dreams. Meanwhile, others were developing new means of stealing money or secrets electronically. And, as Tom Standage explains in his compelling book "The Victorian Internet" (Walker & Co.), it all began happening more than 150 years ago.

When Samuel Morse sent his first electronic message between Washington, D.C., and Baltimore in 1842, he changed human society profoundly-much more than today's Internet has. For the first time in history, information could be transmitted anywhere in the world instantly.

What's important to us, though, isn't the telegraph and the changes it brought. It's the fact that the telegraph essentially vanished as a tool of commerce only 40 years later.

At the end of the 19th century came two devices that took hold almost overnight and forced the telegraph into the shadows: the telephone and the teleprinter. These new devices meant that information could be transferred without highly trained and highly paid operators.

The telephone, of course, allowed anyone to converse at a distance. The teleprinter (using the Baudot five-level binary code that's a direct ancestor to today's ASCII) allowed written messages to be transferred by anyone who could press a lettered key. Because one of the limitations of electronic commerce in those days was the scarcity of skilled employees to run the telegraph network, these new devices opened the doors to worldwide e-commerce in which anyone could participate.

Sound familiar? Look at what's keeping e-commerce from growing faster than it is today. The computers required to access the Internet are difficult to use and require trained operators. The most skilled technical people working with the Internet are highly paid, but exist in numbers insufficient to meet demand.

Already, we're seeing new devices for accessing the Internet, from server appliances to wireless terminals, all supposedly easier to use than the products that comprise today's Internet. While it's impossible to say which device or software will be the key to reducing the complexity and cost of e-business today, it's sure to come.

Just as the telephone replaced the telegraph, something will appear to replace most of today's Internet access tools. And it will change the Internet as profoundly as the telegraph networks were changed a hundred years ago.

More businesses and users will find the Internet accessible. The companies that are successful will be those that are prepared for this change. Those that exist safely in the trailing edge of technology, comfortable in the past, will find themselves communing with the telegraph operators in the shadows of history.