GLOBALIZATION IN AN UNDENIABLE ASPECT

THE EFFECTS OF THE WORLDWIDE INTERNET ON THE GLOBAL ECONOMY BASED ON THE HISTORY OF THE WEB BROWSERS

Maxie – K1270095 21st August 2013

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ESSAY PLAN

TITLE

GLOBALIZATION IN AN UNDENIABLE ASPECT:

THE EFFECTS OF THE WORLDWIDE INTERNET ON THE GLOBAL ECONOMY

The arguments of Globalization issue in the economic sector, the positive and negative side of the Internet effects based on the history of the Internet Web browsers

INTRODUCTION

Background: the adventure story to explore a new world of Christopher Columbus (Biography, 2013)

The change of the world in all aspects after Columbus’s voyage (The Political System)

The cause which made the world become globalization (Friedman, T., 2005) and mention the both sides of

this event

Essay structure and Thesis Statement:

- This essay analyzes those sides of Internet effects to the global economy based on the history Internet

Web browser, from the initiative of Netscape to the success of Microsoft’s Internet Explorer and then to

the replacement of Google Chrome on the Internet market.

- It concludes that there are more positive effects which play an important role in the world nowadays and

the benefits created by those far outweigh the disadvantages.

BODY

BLOCK STRUCTURE

Paragraph 1: Positive side of the impacts of the Internet based on history of Internet Web browser

Illustrate the history of the world till the day the Internet was created which changed the globe to be

globalized

The first argument of how Internet contributed to the global economy in many beneficial ways

- A direct citation about the Internet’s achievements (Quelch, J., 2009)

Based on telling the origin of HTML (Hyper Text Markup Language) to link to one important sector of Internet

which affect the world positively, the Netscape’s Web browser

- Indication of the meaning of HTML (Friedman, T., 2005)

- The use of HTML by Netscape and the advent of world-wide-web to change the face of the Internet to

the users (New York Times, 2007 and Mitra, S., 2010)

- Data of the increase of Internet effects in many aspects (Figure 1, OECD, 1999)

E.g: the average online shopper bought $228 in groceries in 2009, because Tesco embraced the Internet

very early in the U.K (Mc Kinsey Global Institute, 2011)

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- Extend how enormous of the impact of Internet on global economy (Figure 2, OECD, 1999)

Paragraph 2 & 3: Negative side of the Internet effects based on history of Internet Web browser, the “Browser war”

Paragraph 2: The Internet Explorer of Microsoft defeated the predecessors, Netscape

Mention on the “dot-com bubble” effect that Netscape could not overcome the competition with the next

versions of Internet browsers of other company (Friedman, 2005)

- The advent of Microsoft’s Internet Explorer (IE) and how IE knocked Netscape out of the international

Internet market (Berkeley, 1998)

- Extend and explain the cause for this competition from the negative perspective on a statement of Bill

Gates, Microsoft’s chairman (Berkeley, 1998)

- Show the results of the business and finance of both companies, Netscape and Microsoft to interpret

how they negatively affect the U.S. economy in particular and the global economy in general

E.g: Netscape’s revenues dropped to $12 million in 1998 while the web browser usage of Microsoft

increased to an unbelievable number about 96% in 2002 (Figure 3, the U.S. Department of Justice, 2000

and Peter, I., 2004)

Paragraph 3: The ongoing competition within global Internet

Follow the history to state once again that the competition of the global Internet have been and will be

nonstop (Vaughan-Nichols, J. S., 2013)

- Netscape web browser seemed to become a distant concept (PC Mag, 2008)

- Chrome is becoming the next step to overtake and replace IE (The Economist, 2013)

- Bring some data and number to analysis this issue (Figure 4, The Economist, 2013)

- Predict that the competition of the global Internet will keep happening which always turns the global

economy up-side-down negatively (Symonds, M., 1999)

Emphasize how the globe will keep depending on the activities of Internet technology in future (Levie, J. et al,

2010 and CV Tips, 2013)

CONCLUSION

Restate the impact of globalization in Internet sector which transform the face of the whole global economy

Argue that although there will be both side of the Internet effects, the benefits created by globalization of

Internet far outweigh the hindrances and obstacles based on the theory of evolution (Than, K., 2012)

Emphasizes that for the development of the global economy, the competition is inevitable and necessary

Illustrate some statistics that show the achievement and success of the Internet effects to the whole global

economy (Figure 5, MCKinsey Global Institute, 2011).

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GLOBALIZATION IN AN UNDENIABLE ASPECT:

THE EFFECTS OF THE WORLDWIDE INTERNET ON THE GLOBAL ECONOMY

In 1492, Christopher Columbus started his voyage to explore a new world but the result of his journey was far

beyond for giving a proof that the Earth is spherical and smaller than any fantasy verdict of science about globe at

that time (Biography, 2013). Followed Columbus’s generating footsteps, there had been many changes around the

globe. The transaction, international trade between the countries and continents, gradually formed and developed

(The Political System, n.d.). Nevertheless, an interesting concept happened in recent years is that those

developments of the gradual results and the advent of the Internet through the achievements of science and

technology are changing the world in the opposite way once again. The Earth is flat and owing to the Internet, the

globe becomes globalized (Friedman, 2005). However, it cannot be denied that globalization in Internet has both

advantages and disadvantages. This essay will analyze the aspects of the globalized internet in terms of economy. It

will look at the positive and negative sides of the Internet applications based on the history of the Internet Web

browsers, from the initiative of Netscape to the competition between Netscape and Microsoft’s Internet Explorer,

and then to the replacement of Google Chrome on the Internet business market. This essay includes the arguments

on those issues to conclude that there are more positive effects which play an important role in the worldwide

economy nowadays.

Figure 1. Growth in Internet host computers and major e-commerce developments (OECD, 1999)

This line chart shows the rapid increase of the Internet host computers and major e-commerce developments

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About millions of years ago, scientists observed that the Earth exists as only a single continent but after one

geological change or an unexplained incident, it was currently divided and formed as the seven continents and five

oceans. However, with the development of superior technology as well as the breakthrough inventions of the

Internet, the whole world seems to be moving closer together and becomes a unified and single entity again as

forming the concept of globalization in these few decades. First and foremost, the most prominent argument has

been debated for this happening event is that the Internet was born and has contributed to the global economy in

many beneficial ways. As mentioned in an article of Harvard Business School (2009), “each Internet job supports

approximately 1.54 additional jobs elsewhere in the economy, or roughly 2 percent of employed Americas. The

advertising-supported Internet creates annual value of $444 billion. About 190 million people in the United States

spend, on average, 68 hours a month on the Internet. A conservative valuation of this time is an estimated $680

billion”; John Quelch (2009) has quantified the impact of the Internet to the U.S. economy in particular and to the

international economy in common. Back to the early 1990s, the communication of the Internet was only at average;

according to Friedman (2005), HTML (Hyper Text Markup Language) was born by the hands of Tim Berners-Lee as

known as a programming language for writing webpages that supported the Internet users to link from one page to

another and to store and share images. However, HTML only really become successful when Netscape (US computer

services company) firstly configured it into Internet Web browser’s code and made Internet friendly to the users

(New York Times, 2007). The advent of the World Wide Web ushered in a quiet revolution all over the world which

was like an online library or a world encyclopedia and more; and radically changed the way people communicate or

do business (Mitra, S., 2010). In addition, the number of Internet users, Internet host computers and major e-

commerce developments had increased dramatically every year as a significant and noticeable phenomenon (Figure

1, OECD, 1999); and anyone or any businesses, no matter where they are, could start exploring, finding or owning the

information and data from furthest location compared to where they live or even the smallest corners of the globe

and travelling around the world, by just a mouse-click on their computer and an Internet connection. In the same

way, they can easily perform acts of online exchange, business transaction, sale or worldwide commercial

transcontinental. For example, in the U.K., the average online shopper bought $228 in groceries in 2009, because

Tesco embraced the Internet very early in the U.K (Mc Kinsey Global Institute, 2011). This was a significant advantage

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in business computing because before prior to Netscape, it could not be able to communicate with the computers in

the sales division; but now, the sales department can receive an order on the web and within seconds the order has

been routed to create a bill and to send it to the consumers around the world (Friedman, 2005). That creates a major

transformation not only for the development of the region economy, but also help the locals approach to global

economy. It has been claimed that for only three years, Internet and its application from the success of Netscape had

the potential to radically alter economic activities; furthermore, it affected such large sectors as finance and retail

trade and increased 30 per cent of global GDP (OECD, 1999). OECD (1999) also mentioned that from 1996 to 1998,

Web-based advertising had the revenue at $310 million and in the U.S. alone, the amount of adults who accessed to

Internet up to 55 million, the U.K ranked at fourth with nearly 6 million (Figure 2, OECD, 1999).

Figure 2. Adults accessing the Internet (OECD, 1999)

These bar and pie charts illustrates the amount and percentage of the worldwide Internet mature users

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Notwithstanding, these changes happen with its own price. Although Netscape was the first Web browser in

the world, it could not overcome the competition with the other versions of Internet browsers about next four years.

Because of the benefits from the profits and revenues of the Internet development, more and more network

companies were formed and it has been known as a globalization effect called “dot-com bubble” on 8th September,

2000 (Friedman, 2005). In 1994, Netscape refused the offer of Microsoft on transferring their browser technology

and one year later, Microsoft successfully introduced its Web browser, the Internet Explorer or referred to as IE

(Berkeley, 1998). Both companies had built their relationships with global customers by their own way but in a

positive view, Microsoft had provided IE and its applications free for Internet users, while Netscape had not. In other

words, IE already helped people from around the world easily to access and ownership the benefits from the Internet

services and it obviously also supported to expand and strengthen the global market as global economy positively.

Despite the fact that James Barksdale (Netscape CEO) insisted the Internet business would not evolve in the same

way as the operating system business, Netscape almost immediately lost its position in the ranks of Internet

technology. On a negative perspective, as also mentioned in the report of University Berkeley (1998), Bill Gates,

Microsoft’s chairman stated that “There is absolutely no question that in the computer business you are better off

being a friend of”; it seemly implied that the competition between IE and Netscape was an uncompromising battle in

Internet economic market and Bill’s target was almost completely to push Netscape out of the global market. In

addition, it might be recognized that if Netscape was wiped off the market and Microsoft became exclusive, it would

be able to form an imbalance phase for the Internet market in general and the global economy in particular at that

time. As a consequence in 1998, Netscape’s browser market has shrunk and the company's revenues from so-called

client software, which includes its Navigator browser, dropped to $12 million, down from $52 million, while the new

dominant IE browser attained a peak of about 68% of the web browser usage share during 2000 (Figure 3, the U.S.

Department of Justice, 2000) and this proportion also increased to an unbelievable number about 96% in 2002 (Peter,

I., 2004). It could be argued that there had probably many staffs of Netscape who must been out of their business

and the unemployment rate was also increased obviously at that time which would affect the economy negatively.

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Figure 3. Browser Usage Shares from January 1997 to April 2000 (The U.S. Department of Justice, 2000)

This line chart indicates the proportion of the increase and decrease of the Browser Usage Shares (1997-2000)

Step to 2004, Netscape seemed to become a distant concept for the new generation of worldwide Internet

users even though it has not completely disappeared from the global market in same time (PC Mag, 2008).

Nonetheless, there was a sudden and surprising event but could foresee which been happened right after the failure

of Netscape; Microsoft’s IE lost its edge for the next Internet browsers, Mozilla and Opera and more recently, Google

Chrome is becoming one of the most popular Web browsers (Vaughan-Nichols, J. S., 2013). According to The

Economist (2013), “Empires rise and fall swiftly on the Internet”, it is interpreted that as Netscape’s browser was

knocked out by IE, Chrome might be the next step to overtake and replace IE; Chrome has accounted for 43% of

global users who access the Internet today, while there is only 25% left for IE’s customers (Figure 4, The Economist,

2013). The world history seems to be repeated again with a similar case as Microsoft’s IE, the Internet users easily

adapt to new technology with more benefits. If everyone takes a view on the positive side, because the competition

always offers the high quality products, it argues that Google Chrome is now offering and supporting the best service

for Internet users quickly and effectively than any of other web browsers. However, also by this same reason,

Chrome may again be replaced by its juniors because the new browser will provide more benefits to Internet users in

the future. The negative point from this is that Internet market can be a race which been expected to be ongoing

continuously. The alternative of a new and better web browser is an undeniable advantage for Internet users as well

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as for any organization or companies which are using Internet but sometimes, it might also negatively turns the

global economy up-side-down (Symonds, M., 1999). By many current statistics, not only about how people use the

Internet in general, but also in the financial aspect or the global economy in particular, most businesses which do not

exclude large or small business have been and will still depends on the activities of Internet technology in all levels

(Levie, J. et al, 2010 and CV Tips, 2013); it argues that the Internet influences on global economic sectors are

increasingly enormous.

Figure 4. Global desktop Web-browser market share (The Economist, 2013)

These lines of the chart illuminate the success of Google Chrome in recent years

Overall, globalization is not a new concept today which can be interpreted figuratively as a world without any

walls; and as only one of its aspects, such as the Internet effects or more specifically is the competition of the

Internet's web browsers, Internet has contributed not a few change to transform the face of the whole global

economy in these few decades. Despite those changes have both right and left sides, it argues that the benefits

created by globalization of Internet effects far outweigh the hindrances and obstacles. If everyone take a look in

terms of the history of mankind over millions of years or in the real aspects of the world, the evolution are always

about getting rid of the old to achieve a new and better one (Than, K., 2012) . In other words, it also happen as a

same case for the development of the global economy; with the impact of the worldwide Internet, the market

competition is necessary and the powerless companies, departments or entrepreneurs as well as low-quality

products, poor services or an ineffective personal business would be abandoned which it is an inevitable issue.

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Instead of the last words, it has been analyzed statistically that there are two billion people are now connected to the

Internet which this number is growing by 200 million each year; 13 countries account for more than 3.4 percent of

global GDP by the Internet applications and technologies with 21% of GDP growth in the last 5 years in mature

countries; 75% of Internet impact arises from traditional industries; 10% increase in productivity for small and

medium businesses from Internet usage; up to €20 per Internet user per month of consumer surplus and so on

(Figure 5, MCKinsey Global Institute, 2011).

Figure 5. Internet contribution to GDP, 2009 (Mc Kinsey Global Institute, 2011)

This statistic analysis that the Internet has 3.4 percent share of total GDP in the 13 countries

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BIBLIOGRAPHY

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Straus and Giroux. [Online Ebook] Available at: http://maktaba.tum.ac.ke:8888/get/pdf/693/, (Accessed: 20 August 2013)

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Mitra, S. (2010) Power and Impact of the Web [Online] 23

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Commerce: Preliminary Findings and Research Agenda. Paris: OECD [E-book online] Available at: http://www.oecd-ilibrary.org/docserver/download/5kzdcc6tnfmp.pdf?expires=1377035242&id=id&accname=guest &checksum=06A985B33C359367CC4C1EF6B7B77D03, (Accessed: 20 August 2013)

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PC Mag (2008). R.I.P Netscape (1994-2004) Special Video Feature [Online] 21

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http://www.pcmag.com/article2/0,2817,2266177,00.asp, (Accessed: 20 August 2013) Quelch, J. (2009) Harvard Business School: Quantifying the Economic Impact of the Internet [Online] Available at:

http://hbswk.hbs.edu/item/6268.html, (Accessed: 20 August 2013) Symonds, M. (1999) The Economist: The Net Imperative [Online] 26

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The U.S. Department of Justice (2000) Antitrust Case Filling, Declaration of Rebecca M. Henderson: U.S. v. Microsoft Corporation [Online] April, 2000. Available at: http://www.justice.gov/atr/cases/f219100/219129.htm, (Accessed: 20 August 2013)

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ANNOTATED BIBLIOGRAPHIES

Friedman, T. (2005). The World is Flat. New York: Farrar, Straus and Giroux. [Online Ebook] Available at:

http://maktaba.tum.ac.ke:8888/get/pdf/693/, (Accessed: 20 August 2013)

“The World is Flat” is a book of an historical and geographical journey which indicates many ideas

such as analysing about the concept of Globalization in the world nowadays. In the introduction of the

book, Friedman (2005) has illustrated that there were many matters had been changed from the day

Christopher Columbus explored the new land (America) which made the Earth became smaller and he

implied that the theory of globalization was seemly born at that time. Friedman discussed both

opposite sides of Globalization issue by ten forces that flattened the World. Although there were so

many positive views on globalization, Friedman also argued that the negative impacts were hard to

avoid. As he states in “The World is Flat”, “In China today, Bill Gates is Britney Spears. In America

today, Britney Spears is Britney Spears-and that is our problem” (Friedman, T., p.177, 2005); by using

the figure of famous people, it referred to an insinuated way about the economic isolation of the U.S.

in the globalized world. “The World is Flat” completely explains of virtually every aspects of

Globalization in economy which is essential and useful for my writing essay; however, some authors’

points seemly are too strong and should be evaluated by further consideration based on the other

relevant documents.