When we started AOL in 1985, to learn about “the Internet” you needed to read science fiction or the predictions of futurists. I remember reading Alvin Toffler’s The Third Wave — describing the evolution from the agriculture age to the industrial revolution and predicting the emergence of a third “electronic” revolution — like it was yesterday. At the time we launched, only 3% of U.S. households were online, and those early adopters averaged just one hour of weekly use.
Communication modems were viewed as "peripheral" devices — a non-core, optional, niche add-on for a small subset of hobbyists. Connectivity was expensive, as most users were charged for every minute of network usage. And the Internet was limited to non-commercial uses (mostly educational institutions and the government). In fact, back then it was illegal for companies or the general public to be connected to the Internet.
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It took more than a decade to move from a niche technology that few understood to the mass medium it is today. A number of factors contributed to the eventual success of the Internet. But perhaps none was as pivotal as the creation of the World Wide Web, on this day 25 years ago.
The invention of the web, led by Tim Berners-Lee at CERN, was a spark that lit the Internet flame and helped propel its adoption. And now our world is arguably more peaceful, more prosperous and better connected as a result of this global medium that breaks down walls and builds connections.
But where do we go from here?
Borrowing from Toffler’s “third wave” perspective, I believe we are now seeing the emergence of the third wave of Internet companies.
The first wave, in the 1980s and 90s, was building the Internet infrastructure and getting people connected. AOL was a leader in that first wave — at our peak, we carried more than 50% of the consumer Internet traffic in the U.S. — but many other companies built the foundational technologies and platforms, including Cisco, IBM, Microsoft, Netscape, among others. And of course the role of the World Wide Web cannot be underestimated, as it as one of the pivotal innovations.
The second wave of companies built services on those platforms. This led to the emergence of a new generation of second wave companies, including Google and Amazon — and the reemergence of some, particularly Apple. This, in turn, powered the social media revolution, enabling Facebook, YouTube, Twitter and others to grow rapidly. And it unleashed the app economy, a phenomenon that has powered a range of recent successes including Whatsapp and Instagram.
And now we’re poised for the third wave. While new “Internet companies” will continue to emerge and innovative “apps” will continue to flourish, the momentum will start to shift. Instead of building the Internet, as we saw in the first wave, or building on the Internet, which characterized the second wave, the third wave will be about integrating the Internet throughout. Not to mention, it will shake up major industries, such as education and health care, in the process.
The Internet will shift from being the main event to being increasingly invisible, as it becomes more integrated into our devices in subtle, but powerful ways.
This third wave will create enormous opportunities. After all, health care alone represents one-sixth of our economy, and if you add in the other the sectors that are now ripe for disruption — education, transportation, energy and government services, among others — they in total represent more than half of our economy.
But this will be hard to do. Disruption won’t happen overnight. It will be more of an evolution. These are complex problems that will require not just technologies, but a web of partnerships. Collaboration and alliances will become as important in this third wave as viral apps were in the second. This change will require an enterprise mentality. And, like it or not, entrepreneurs will need to learn to respect and work with governments. And governments will weigh in on sensitive policy issues like security and privacy.
It has been an interesting ride over the past 25 years, since the web came into being. Nobody knows for sure what the future holds in the next 25 years, but one thing seems pretty clear: You ain’t seen nothin’ yet.
Steve Case is the co-founder and former CEO and chairman of America Online (AOL).