Blazing trails
In 1994, entrepreneurs eager to set up shop online faced plenty of obstacles. For one thing, the United States government still controlled some of the Internet's infrastructure. Under the rules of the National Science Foundation, commercial activity on the Internet was technically forbidden until the spring of 1995, when the agency relinquished all sponsorship of the Internet's network backbone. Federal export limits on strong encryption software also hamstrung early e-commerce efforts as companies grappled with a safe method to collect payments online.
A lack of standards for incorporating encryption technology into Web browsers presented another barrier. Both Adams and Kohn concede that without those standards, the mechanics for encrypting transactions were clunky and awkward by today's standards.
After a decade, even your mother buys books online. But are "secure" transactions secure enough?
Both the Internet Shopping Network and NetMarket required online shoppers to download special programs before they could safely transmit their credit card numbers over the Web. NetMarkets, which is now operated by a subsidiary of hotel and rental car company Cendant, used a special browser that incorporated Pretty Good Privacy (PGP), a program that went on to become a popular email encryption tool but never caught on for e-commerce. Internet Shopping Network relied on a program called Secure Mosaic, a browser that required users to grasp the concepts of public key encryption technology, a system for securing electronic transactions and managing digital signatures.
The programs were hardly geared toward the mainstream shopping public. They required technological proficiency to configure and operate correctly. And at the time, they only worked on computers running the Unix operating system, while the vast majority of the computing public used Microsoft Windows or Apple Macintosh machines.
That's why the Internet Shopping Network, which the Home Shopping Network later acquired, continued to gather customers' credit card numbers by phone and fax for most orders in 1994, Adams said. The data encryption mechanism was difficult to use and most people didn't trust it at that point, he said.
"It was not something your mom was going to use," said PGP creator Philip Zimmermann.
