Better to ask where it isn't

It's difficult to imagine many American lives untouched by the Internet. Today, home users can access the Web on dial-up telephone lines, landline broadband (via coaxial cable, fiber optic or copper wires), Wi-Fi, satellite and cellular phones. Public places, such as libraries, Internet cafes and airport terminals, offer immediate connection to those without home access and those who find themselves jonesing for the 'Net while away from their personal computer.

The ubiquity of the Internet in American life is unmistakable and on the rise. In 2005, nearly 70 percent of Americans, or 203.5 million people, were regular Internet users, an increase of 113.5 percent since 2000. The third quarter of 2005 found Americans spending more than $22 billion in e-commerce sales, just $6 billion less than was spent in online retail during the entire year in 2000.

E-commerce is centered in the capability to buy, sell and communicate online. Both web-specific retailers and established traditional brands have seen their share of success and failure as Americans become more accustomed to doing their shopping online. Despite the well-publicized failures of companies that made their way solely in e-commerce, for example, online grocery delivery services Webvan and Streamline.com, established supermarket chains such as Safeway and Pathmark took note and began e-commerce online delivery shopping options.

Virtual success stories

Despite the failures of a vast majority of Internet start-ups, particularly in the pre-bust days in 2001, several companies managed to survive and become household names even when they lack any tangible product. These entirely virtual companies, such as eBay, Paypal and Google, mined gold from the essentially theoretical world of 1s and 0s that encompasses the digital realm. By making the complexities of information storage, retrieval, communication and trustworthy financial transactions simple for web-users, these companies have emerged as profitable examples of how the Web can be harnessed as a serious moneymaker.

A variety of options

When the Internet first became widely known in the mid-1990s, pundits predicted that its biggest successes would come from content, or web-based news and information sources. What took some time to figure out, and what is still under debate today, is how companies and web sites were to make money on information that was largely available for free. Throughout its brief existence, the Web has been most profitable in e-commerce and online advertising, though subscription-based content sites have shown some staying power of late, as have fee-based community forums and job boards.

Search and ye shall find

With a seemingly endless array of information posted on the Web, search engines provide a little relief. Google, launched in 1998, became the unmatched leader of search by 2001 and, in perhaps the ultimate brand accomplishment, has become a commonly used verb in the English language. In the last few years, several industry giants have looked to dip into Google's market dominance, as former Google client Yahoo! launched its own search engine in 2004 based on a number of acquired companies and technologies, and MSN Search, owned by Microsoft, which also relied on other companies to provide its search engine listings in the past. Search engines garner their revenue via ads targeted by keyword and sales of advertising placement to affiliated web sites.

The business of keeping in touch

A significant part of profit on the Web comes from community-based sites that link like-minded users with one another, help connect friends with friends and help in the quest for that special someone. Community sites like Friendster, an online social networking community that links trusted "friendsters" and the leisure entertainment they enjoy, and Myspace.com, another online community that allows its members to upload personal music, blogs and pictures, are free to their members and earn revenue through banner advertisements and product placement including faux-profiles of rock bands and movie characters. Fee-based services such as classmates.com and ancestry.com connect users to former classmates and information about family members, while dating services such as match.com and lavalife.com link the lovelorn with potential mates.

The retail that wags the dog

The Internet has long been touted as the future of retail, yet only within the last several years has that prophecy been fulfilled by companies actually posting profits instead of promise and potential. Revenue continues to rise for online companies of all stripes, including B2C (business to customer) sites such as renaissance vendor Amazon.com and DVD-rental titan Netflix, auction sites such as eBay and B2B (business to business) sites that use automated processes to link trading partners. Many e-commerce sites combine principles of other forms of Internet business, for instance, travel sites like Orbitz, Travelocity and Priceline, are operated like search engines that allow users to search for low-priced airfares, travel accommodation and car rental.

All the news that's fit to code

Despite the rise of blogs and myriad web sites that produce original content for free and make their earnings the "old fashioned way," i.e., banner advertisements and links to B2C sites, a growing number of sites have found success in a sector once thought to be financial suicideonline content for paying subscribers. Certain sites, such as the online magazine Salon.com are exclusive to the Web; others, such as espn.com's Insider content and The New York Times' new TimesSelect option, which provides subscribers with online access to the paper's columnists and archived articles for a fee. As more and more Americans switch from dial-up to broadband service, television and movie studios are finding web-exclusive content increasingly profitable to a wider audience. In 2004, broadband penetration among Internet users grew to 55 percent.

Log on and drop out

Internet Service Providers (ISPs), the businesses and organizations that provide users with access to the World Wide Web and related services, necessarily change as quickly as the most recent technology. Witness the dramatic rise and fall of America Online, a titan of the dialup age that is struggling to keep pace as cable and wireless communications companies capitalize on the advances in broadband and Wi-Fi affordability and ease of use. While companies like PeoplePC, Earthlink and AOL survive with a focus on low-cost dial-up service, the days of dial-up connectivity appear to be numbered in the face of growing competition from subsidiaries of cable companies such as Comcast and Time Warner and cell phone outfits such as Verizon Wireless.

Content's time to shine