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.com, Leslie Walker

Progress Is Measured In Many Ways

By Leslie Walker
Thursday, December 30, 2004; Page E01

Start-ups came back in style. IPO fever gripped Silicon Valley. Internet advertising rebounded. Blogging went mainstream, as did Internet phone service. Phishers sent a blizzard of bogus e-mails, looking for all the world like they really came from Citibank or American Express.

Those were among the top tech stories of 2004, a year of dubious distinctions along with steady innovation and successes. Here are my picks for the year's high-tech superlatives:

The Shipping News? Time's Almost Up (The Washington Post, Dec 16, 2004)
On Local Sites, Everyone's A Journalist (The Washington Post, Dec 9, 2004)
Where the Game Is the Medium (The Washington Post, Dec 2, 2004)
.com Archive
_____Web Watch_____
New Online in 2004: The Wonderful and Wacky (The Washington Post, Jan 2, 2005)
Web Watch Archive

• Cheesiest eBay auction: A Florida woman sold a half-eaten, decade-old grilled cheese sandwich on eBay for $28,000, claiming it contained a likeness of the Virgin Mary. The purchaser was Web casino GoldenPalace.com, which vowed to send the grilled apparition on a world tour. The runner-up? A North Carolina man sold three tablespoons of water on eBay for $455 last week, claiming he had kept it frozen for decades and that it came from a plastic-foam cup Elvis Presley purportedly drank from during a 1977 concert. This week the man is auctioning off the right to display the cup; bidding had reached $300 by yesterday.

• Least hyped story: IPO fever, accompanied by takeover mania, swept the information technology and telecommunication industries once again. The total value of merger and takeover deals announced in telecom and technology in the United States this year exceeded $207 billion, up 156 percent over 2003, according to research firm DealLogic. Initial public stock offerings rose even more, to roughly three times as many as last year, with more than 200 firms going public in 2004. In addition to Google's $1.7 billion August offering, this year's Internet IPO crop included diamond dealer Blue Nile Inc., gay and lesbian personals provider PlanetOut Inc., Israeli-based comparison shopping service Shopping.com Ltd. and real estate broker ZipRealty Inc.

• Most hyped story: Can you chant "Google, Google, Google"? Everything the Web search star did this year generated hyper-publicity. In a typical miscall, many pundits proclaimed Google's initial $85 pricing to be a disappointment, only to watch as the share price more than doubled in the aftermarket. Google, meanwhile, did not lack for innovation or chutzpah, not to mention moolah. It rolled out such original services as Gmail, an e-mail service with huge amounts of free storage; Orkut, a quirky social-networking service; and Google Desktop Search, a free software program that searches people's computers as well as the Web. And it announced a partnership with five libraries to scan and upload millions of books.

• Hottest digital device: This was a three-way tie between the Apple iPod, satellite radio and digital cameras, each of which helped turbocharge still-emerging digital entertainment industries. The Apple iPod Mini, released in February and holding more than 1,000 songs, sold out at many stores for the holidays and heightened demand for portable music players. Satellite radio subscriptions also took off, challenging traditional radio in a big way. And digital cameras ranked as the No.1 holiday gift, displacing DVD players, which held the top ranking last year.

• Emptiest broadband rhetoric: Campaigning in April, President Bush said the nation should make high-speed Internet access available to all citizens by 2007, but offered no details of how to accomplish the goal beyond creating the "right regulatory environment," which he later explained meant less regulation. Federal regulators, meanwhile, gave incumbent telephone giants a huge break by in effect freeing them from having to lease their lines to competitors at fixed wholesale rates. And in a number of states, the regional phone companies fought to keep local states and municipalities from offering public Internet access.

Meanwhile, the United States fell woefully behind in the global broadband race, dropping from 11th to 13th place in the percentage of population with high-speed Internet access, according to the International Telecommunications Union. Just a few years ago, the United States ranked in the top five.

• Biggest flip-flop: After long belittling the idea of mail-order movie rentals, Blockbuster Inc. reversed engines in August and rolled out a copycat version of the DVD-by-mail service pioneered by Netflix, charging $20 a month to keep three movies at a time, two bucks less than Netflix.

The nation's largest movie-rental store chain started a price war that it appears determined to win. After Netflix dropped its standard monthly price to $18 a month in November, Blockbuster lowered its fee to $15.

• Most innovative software: The free Web browser jointly created by volunteers, Mozilla's Firefox, brought badly needed innovation to a market dominated but neglected by Microsoft Corp. The Firefox browser is still a gnat to Microsoft, even though it has been downloaded more than 13 million times since its November release and has pushed Microsoft's share of the Web browser market down, to below 90 percent in one survey. But its growing popularity with the tech elite should be a warning to Microsoft, which for years has bundled its security-risk-riddled Internet Explorer with the Windows operating system without offering much in the way of updates for today's Internet.

• Most acute case of Internet envy: In one of the year's major Internet takeovers, New York-based conglomerate Cendant Corp. snapped up Web travel service Orbitz Inc. for $1.2 billion. Cendant also announced it was buying Ebookers, the British Internet travel firm, for $404 million; and made a $1.1 billion grab for two other British travel firms. The deals will make Cendant the second-biggest Internet travel operator, after Expedia. But the Orbitz deal was just as notable for who was selling -- the five big airlines that jointly founded Orbitz four years ago. By pulling out of Orbitz, the financially ailing airlines essentially abandoned their strategy of jointly competing against their resellers and are now focusing on ticket sales through their individual Web sites.

• Quietest cry of "uncle": Another industrial-grade Internet about-face took place in Detroit, where the big automakers, like the big airlines, gave up on the idea of a joint Internet service. Covisint, the four-year-old auto parts exchange founded by General Motors Corp., Ford Motor Co. and DaimlerChrysler AG, sold itself off in pieces early this year. Its online auction unit went to FreeMarkets Inc. of Pittsburgh and other corporate assets went to Compuware Corp.

Leslie Walker's e-mail address is walkerl@washpost.com.

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