History

The first commercial online services came about in the early 1980’s. CompuServe (owned in the 1980s and 90s by H&R Block) and The SOURCE (owned by The Reader's Digest) are considered the first major online services created to serve the market of personal computer users. Utilizing a text-based interface, these services allowed anyone with a modem and communications software to use email, chat, news, financial and stock information, bulletin boards, special interest groups (SIGs), forums and general information. Subscribers could exchange email only with other subscribers of the same service. Other text-based online services followed such as Delphi online service, GEnie and MCI Mail. The 1980s also saw the rise of independent Computer Bulletin Boards (BBS).

The commercial services used pre-existing packet-switched (X.25) data communications networks; users dialed into local access points and were connected to remote computer centers where information and services were located. As with telephone service, subscribers paid by the minute, at day-time and evening/weekend rates.

As the use of computers that supported color and graphics (GUI or a graphical user interface) increased, such the Atarti, Commodore, Texas Instruments' TI99-4a, Apple //e and early Microsoft-based PCs, online services gradually began offering information that could be displayed graphically. Early services such as CompuServe and The Source added optional simplistic graphics-based programs (GUIs) to present their information, though they continued to offer text-based access for those who needed or wanted it. In the mid-1980s graphics-only online services such as Prodigy, MSN, and Quantum Link ("Q-Link", which was later merged with its Mac-only sister company, America OnLine) sprang up. These application programs presaged the web browser that would change global online life 10 years later. Apple computer developed its own service, called AppleLink, which was targeted mostly at Apple dealers, developers, and Mac computer consultants. Later, Apple offered the short lived E-World, targeted at Mac consumers. E-World's initial interface was almost identical to the Mac-Only version of America OnLine.

Starting in the early 1990’s, the Internet, which had previously been limited to government, academic, and corporate research settings, gradually opened up to the general public. The invention of the World Wide Web in 1993 accelerated the development of the Internet as an information and communication resource for consumers and businesses. The sudden availability of low- to no-cost email and appearance of free independent web sites broke the business model that had supported the rise of the early online services industry.

CompuServe, AOL, and Prodigy began adding access to Internet e-mail, to Usenet newsgroups, to ftp access, and to web sites. At the same time, they were forced to drop their usage-based billing structure and move to monthly subscriptions. Similarly, companies that paid to have AOL host their information or early online stores began to develop their own web sites, putting further stress on the economics of the online industry. Services like AOL (which later acquired CompuServe) were able to make the transition to the Internet-centric online -- now Web -- world. Others were not.

A new class of online service provider appeared to provide access to the Internet, the internet service provider or ISP. As the internet became popular, many ISP’s began offering flat-fee, unlimited access plans. These providers first offered access through telephone and modem access, just as did the early online services provides. This method has gradually been supplanted by high speed and broadband access through cable and phone companies. The importance of the online services industry is hard to overstate, though it is often overlooked when the "history of the Internet" is discussed. For instance: when Mosaic and then Netscape were released in 1994, they had a beta test population of more than 10 million people in all walks of life, in business and education, far beyond the famous "early adopters," and they were located all over the world. This brief period demonstrated the unprecedented power of personal information networking that continues to flower along the World Wide Web.