Effects of Internet

For the first time ever, the world is at our fingertips. By tapping into the largest computer network in the world - the Internet, every kind of information is accessible. The Internet is not a single network (Gralla, 1998). As stated by Gralla (1998, p. 2), "it is a vast, globe-spanning network of network". The collaboration of these networks and organizations builds up the wired world of the Internet. Eventually, the invention of the Internet leaded to the birth of the World Wide Web. The World Wide Web was invented in 1990 by Tim Berners-Lee at the Swiss-based European Laboratory for Particle Physics (CERN) to give physicists a convenient way to publish their papers on the internet (Garfinkel, Spafford, 2002). After years of innovative improvements, the Internet and the World Wide Web are booming successes and they became a major part of the New Economy, affecting the world both economically and socially.

The Internet serves as the bedrock of new commercial relations (Flichy, 2007). Commercial sector showed an interest in the Internet and gradually, Internet infrastructures were privatized. The Internet has then resulted in many advantages such as low inflation, low unemployment and the apparent acceleration of productivity growth (Blinder, 2000). In the New Economy where productivity is one of its fundamental features, the Internet has greatly contributed in this aspect. Productivity growth in the U.S. economy has speeded up and advances in IT are the driving force behind this acceleration in productivity. Due to this, the United State economy is able to sustain a higher growth rate without suffering from higher inflation.

The Internet has brought a great change to the global economy. The application of the Internet technology that has received the most public attention is merchandising to consumers. (Blinder, 2000). Internet retailing offers many benefits to consumers such as easier comparison shopping, removal of travel costs and 24-hour availability. Amazon.com, eBay and eToys are among the marquee Web sites of the New Economy and E-commerce is currently growing at a mind-boggling rate. According to the Center for Research on Electronic Commerce at the University of Texas, e-commerce has reached a whopping $37.5 billion.