>> that's right, my friend. it's time for "baywatch"! >> can you believe they gave stephanie skin cancer? >> i still can't believe they promoted her to lieutenant. >> you're just saying that because you're in love with yasmine bleeth. >> how could anyone not be in love with yasmine bleeth? >> hey, hey, they're running. see? this is the brilliance of the show. i say always keep them running. all the time running. run. run. run, yasmine, run like the wind. in the '90s, we're going to revolutionize human communications using these desktop computers. >> you've got mail. >> what is the worldwide web? >> in the world of computers

it's kill or be killed. >> please welcome bill gates. >> do you agree or disagree that you have a monopoly? >> check out windows 95. >> this is imac. >> it's a technological revolution that's changing the way we do everything from making friends to falling in love. >> when the new millennium arrives, so will a technological tidal wave. ♪ ♪ ♪ ♪

♪ so you've just bought your first personal computer, you've brought it home from the store, you're unpacking it and then comes the moment of truth. if you've just bought your first personal computer, this show is for you. >> computers were in 1990 a disconnected device. it was a brick, right? that sat in your house and let you do amazing things that you'd never been able to do before, but it was essentially a productivity tool. >> now that we have all these very powerful tools, we're still islands, and we're still not really connecting these people using these powerful tools together. >> apple was in a period of decline. steve jobs quit in kind of a temper tantrum in 1985. and he went off and started a company called next.

after he left, there was a sequence of pretty boring, unimaginative corporate leadership that followed him. >> so why did you leave apple? >> well, why did i leave apple? i was asked to leave. yeah, i was asked to leave apple. i was planning on spending the rest of my life there, but didn't work out that way. >> steve jobs was a genius, but one of the reasons he got moved out of his job was because he was spending huge amounts of money on projects that, for the most part, never reached the market. and apple had a crisis of confidence. >> at a time when major computer corporations like apple are laying off 10% of their workforce, microsoft is the big exception in the computer industry. >> people didn't get how much value there was to be derived from software. that the operating system could be the most valuable piece of real estate in the whole computing business was something not understood by almost anybody in the computer industry apart from bill gates. [ cheers and applause ]

>> today, we're introducing microsoft windows version 3. >> bill gates, part thomas edison, part henry ford, part holden caulfield from "catcher in the rye." at 19, he dropped out of harvard to design computer software with his friend paul allen. they came up with a system that operates 90% of the personal computers today. >> microsoft was making a lot of money then. they were charging $200, $300, $400 for, say, a word processing package that really was costing them about 50 cents to print on floppies. >> hardworking, modest, easy-going, it would seem to a fault. of course, he does have at least one secret, but we'll fix that. is it true that you can leap over a chair from a standing position? >> it depends on the size of the chair but this chair, probably so. >> yes!

>> i took a step before i did it. >> that's okay. >> bill gates wasn't just one thing. he was a brilliant guy, had great parents, family values. but he was a killer. he basically was a ruthless guy, and so was microsoft. >> no, no, no, no, no. somebody's confused. somebody's just not thinking. there's no way. >> we'll figure it out. >> you guys never understood. you never understood the first thing about this. >> a lot of people make the analogy that competing with bill gates is like playing hardball. i'd say it's more like a knife fight. >> i've never heard any of these things. you know, you're saying like knife fight. that's silliness. it's childish. i mean, why be a mouthpiece for that kind of silliness? well, i'm done. >> can i just ask you one more question, bill? >> no, i don't think so.

>> i remember one time interviewing gates and i said, microsoft owns the world right now. do you worry about that? he said, i worry about it every single night. i go to bed thinking what have i not thought about. >> now it's starting to dial. and now, i am in. >> it spans the globe like a super highway. it is called internet. the net began back in 1969. it was a tool of the pentagon. but nowadays just about anyone with a computer and a modem can join in. >> the internet was a really dorky, hard to use, and extremely nerdy thing. none of your friends would have been on this. just fellow people in tech. >> the internet really was not a huge factor in the early '90s. but netscape changed things. >> they're calling him the next bill gates. 24-year-old marc andreessen. 15 months ago, andreessen, fresh out of the university of illinois, helped start a company called netscape.

at 11:00 a.m. this morning, the company's stock went public, and wall street went bonkers. so what does netscape produce that now makes the company worth $2.9 billion? this, the netscape navigator, software which makes it easy for people to connect to the global computer network called the internet. >> microsoft has a long history of feeling threatened by hot new upstarts. you could easily argue that bill gates' game plan was world domination. >> these guys can be taken. but the only way we're going to take them is by studying them. know what they know. do what they do. watch them, watch them, watch them. take every one of their good ideas and make it one of our good ideas. >> microsoft came down and essentially said to netscape, hey, you know, we can be friends, or we can be enemies. and if we're going to be friends, that's great. you'll get all the advantages of working with microsoft in a million ways, and you'll be on the home screen of a lot of computers. or we can compete.

and if we compete, we'll do basically whatever is required to kill you. >> some people believe you have an infinite appetite for power, that you're the embodiment of a button in the 1980s that said, "i want it all" and you want to eat up your competitors. is that unfair? >> it -- it doesn't ring any bells with me.

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the first day back. >> how does it feel? >> what do president clinton, conservative radio personality rush limbaugh, and rock star billy idol have in common? they've all got electronic mail addresses on computer systems linked to the internet. >> who are these other people that are on it? >> other people just like you. >> how did they get on it? who regulates this internet, and who decides who gets on this highway and who doesn't? >> the services we're talking about today are commercial services. so you spend money to get on there. so there's no real regulation per se. you use your phone line and your computer, and you get online. >> compuserve was for the tech savvy people. prodigy was for shopping, and aol was the first one that had a vision to get everyone connected. [ computer handshake ] >> when i heard that sound, i cried a little bit because i knew there was a big adventure waiting for me. >> welcome. you've got mail. >> compuserve charged by the minute. it was like a taxicab. aol's invention was to forget that and charge $19.95 a month, all you can eat.

and that changed everything because now you could afford to be on the internet all you wanted. >> you didn't have to be a researcher. you could dial onto aol. aol was specifically designed to be point and click. >> steve case is the president of america online. i interviewed him via computer. >> then george asked, what are the most popular america online features right now? >> he responds, the real focus for us is on promoting interactivity. >> what's the very best thing about it? i think being able to communicate with just about anyone anywhere. >> one of the things that aol realizes is that america online can't be all 200 plus million people at once. you need little neighborhoods. and so, chat rooms become internet neighborhoods. where people who share interests create their own little space. >> you can either click on the chat button up here or go to the people connection. that's what america online calls it. and when you get there, click on a list of rooms to find different categories of rooms. >> when i was a kid, i didn't know any other black gay people. the only people that i knew were the folks that i met on america online.

i didn't come out to my mother till much later, but i was out on the internet. >> in many respects, aol was one of the first social media companies. >> computer communication is not like human communication. there's no facial expression to help you know which way something ambiguous is meant. so the isolated communicators of cyberspace have come up with little signs made out of punctuation marks. they're called emoticons. >> you were using text to have a conversation that felt like a face-to-face communication. you could see the start of this new online culture. >> it's a technological revolution that's changing the way we do everything, from making friends to falling in love. >> he was nice and he never gave me any of the come-on lines. it was always friendly. >> wait, you're telling me guys use pickup lines on a computer? >> uh-huh. >> as the internet grows, i'm finding information. i also want to find love. >> i just happened to stumble on

michael's address. i picked him out of the blue. i read his profile, and i was completely floored. >> many of the businesses of the internet work on connecting for the first time total strangers who have very narrow interests in common. >> aol was what was called a walled garden. picture this. you're paying a monthly fee for something with a limited number of things to do. no matter how many things they put inside their garden, it could never come close to the hundreds of millions of things that would pop up on the open internet. >> the thing about the world wide web is that it has no central organizing body. it's chaotic. if you are running a website, how is anyone going to find you? >> stanford grad students jerry yang and david filo liked spending hour after hour discovering interesting places on the internet. that is how they stumbled onto a fortune. their million dollar idea is

called yahoo! ♪ yahoo! ♪ >> yahoo! came in at just the perfect time. they literally made lists. it was just simply a listing. it was jerry and david's web listing. and they named it yahoo! after rednecks, yahoos. >> yahoo! was an exercise in organizing the internet. it quickly became the leading way to find things. it was a directory-based system. it wasn't a search-based system. the idea was to curate the whole web. >> wall street now values yahoo! at around $700 million even though the company is barely profitable. >> with the success of netscape and the growth of these digital upstarts, yahoo! there was this energy that was not all in seattle. >> it's not really silicon valley versus what's going on in redmond, washington. it's more mankind versus microsoft. so silicon valley is just one outpost against the evil empire to the north.

>> this is silicon valley, the heart and soul of the nation's computer business. here microsoft is respected and feared as a powerful giant whose every footstep sends shivers through the entire industry. >> there's this emerging war basically between the silicon valley culture built up around the web and the microsoft culture up in redmond. it's not just a cultural clash but an economic clash, technological clash, a clash for power. >> bill gates had to turn microsoft like a supertanker around to have it address the internet. the way they did that was by coming up with internet explorer which they presented as the world's best browser. it wasn't. you know, microsoft stuff never is the best. but it was well marketed, and it was pushed, and they had a lot of money behind it. >> here came microsoft with its own version of a web browser built into windows 95. their intention was to kill netscape as the browser and make

internet explorer its replacement. >> five, four, three, two, one, zero! >> a consumer feeding frenzy. many computer stores like this one in miami opened at the stroke of midnight so customers could be the first to get their hands on windows 95. ♪ check out windows 95 ♪ >> it seems like an awful lot of fuss over a single product, but the product will have a huge impact not just on microsoft but on the global computer industry. >> this is jennifer aniston. i'm matthew perry. we're here to see mr. bill gates about a possible starring role in the video guide to microsoft windows 95. >> all the employees of microsoft have been invited to a huge party in a tent over there on the microsoft campus. guess what song we could hear blaring out of there? you got it. rolling stones' "start me up." >> windows 95 was the most successful software launch to this day.

everybody, whether they really wanted to or not, went out and got windows 95. >> getting the rolling stones to allow their music to be used in the ad launch tonight is the sign of a company at the peak of its powers. the challenge for microsoft is to stay there. with the race now on to exploit the internet, it may soon be microsoft's turn to fear the competition. ♪ i've been running hot ♪ ♪ you got me ticking ♪ ♪ gonna blow my top ♪ versatility.b lengthsd one tool that helps you choose, change, and master your style. king c. gillette inner voice (furniture maker): i'm constantly nodding... ...because i know everything about furniture ...but with the business side... ...i'm feeling a little lost. quickbooks can help. an easy way to get paid, pay your staff, and know

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apple computer, a pioneer in the personal computers and software business, has fallen on hard times. after reporting a big quarterly loss, it decided to lay off 1,300 workers. >> how do you feel about what's happened to apple? did it have to turn out the way it did? >> it's hard to predict these things. >> you've thought about this. this is not a subject that's unfamiliar to you. >> yeah, it is. it's sort of ancient history to me right now. i don't really think about this stuff anymore. apple and microsoft duke it out and netscape and microsoft duke it out, and to me it's a spectator sport. >> in the mid-1990s, apple had a couple more ceos, none of whom really grasped the vision of apple. as a result, the company just did worse and worse and worse as the decade progressed. >> with big losses in the last quarter, with profit margins shrinking, apple seems destined for a takeover. this is a computer that even has fan clubs.

>> i just love the apple. and i always have, and i can't really say why. >> everyone was rooting for apple to somehow survive. but it wasn't at all clear that apple would be around at the end of the 1990s. >> the troubled apple computer company may return to its core in an effort to boost sagging sales. apple reportedly will name its co-founder steve jobs as its new chairman. jobs would replace a chairman who was ousted earlier this month. >> steve came over to apple, sold next to apple for $400 million. he had no ambitions at apple at all. but steve jobs was watching apple flounder, and he just couldn't help himself. and so he remade the company the way he wanted. and there was no one to oppose him because the company was exhausted. >> steve jobs had exactly the abrasive but incisive personality that apple needed at that point. they needed someone to come in

and say, kill that project. kill that project. that's stupid. consolidate that, and focus the company. >> i'd like to announce one of our first partnerships today, a very, very meaningful one and that is one with microsoft. [ applause ] we're very, very happy about it. we're very, very excited about it. and i happen to have a special guest with me today via satellite downlink. >> i don't think steve jobs has ever experienced, you know, before or after that, just people going "boo, no!" microsoft represented everything that these hard-core apple fans hated. >> if we want to move forward, and see apple healthy and prospering again, we have to let go of a few things here. we have to let go of this notion that for apple to win, microsoft has to lose. okay? [ applause ]

>> there was an alliance now between these two former arch rivals, and microsoft was going to invest $150 million in apple. but more important, from bill gates' point of view, was that apple would include microsoft's browser in all macintoshes. that was the last piece. now he had domination of the browser world. >> microsoft says internet explorer just makes it easier to get around the web. but when you hit a button to access services for travel, entertainment, news and the like, you find sites owned by microsoft. and that's what the government is worried about. over the next few years, americans may be buying billions of dollars in goods and services through the internet. and that's a market too important, the government says, for one company to act as gatekeeper. >> the u.s. justice department asked a federal court today to fine microsoft corporation a record $1 million a day. >> the complaint against microsoft came from executives

at netscape, a fast-growing software company that struck gold with its web browser, but microsoft began giving away its own browser and required computer manufacturers to offer it with windows. >> what they're able to do is they're able to illegally, we believe, use that monopoly power to block the competition. they're able to pay people to not use our software and do other things that monopolists are legally not allowed to do. >> a lot of people were saying the antitrust laws are outmoded. technology will enforce competition on its own. the counterargument is that when you begin to get lots of people to use your operating system, it becomes harder and harder for somebody else to break into that industry. >> microsoft chairman bill gates goes before congress for the first time today. gates is expected to face tough questions from the senate judiciary committee. >> i want to, if you don't mind, ask the audience one question and get a quick poll. how many of you use intel-based pcs in this audience? raise your hands. of that group who use pcs, how

many of you use a pc without microsoft's operating system? gentlemen, that's a monopoly. that's a lot. that's 100%. >> it is fair to say that when you compete with people, you think, hey, we're going to have a better product. we're going to win the customer. we're going to do a good job here on these things. >> the hearing makes clear, i think, to most people like, oh, huh, so that gates guy, he's not just like a kind of good-natured geek in glasses. he's another rich, rapacious capitalist. >> police and security guards in belgium were caught flat-footed today by a cowardly sneak attack on one of the world's wealthiest men. >> it's been a bad week for microsoft and its cybermeister bill gates. yesterday at the chicago debut of his much awaited windows 98 system, the program dramatically crashed. >> you'll notice that this cancer bill -- whoa. >> it's shaping up as one of the antitrust battles of the century.

federal and state governments today sued microsoft saying the computer software giant is predatory and scheming to crush all competition. >> microsoft used its monopoly power to develop a choke hold on the browser software needed to access the internet. >> i don't think bill gates recognized the seriousness of the situation. this was a case that simply wasn't going to go away. >> worst case, they'll ask us to create a crippled product, and that would be too bad. that would really hold us back. so we're quite confident that won't happen. >> the government tried to avoid this trial in every way they could. but once bill rejected every settlement offer, the world just changed because it was like okay, so now we're going to court. the government might not be good at some things, but it's really good at litigation. and when it decides it's going to win a lawsuit, you are going to face a formidable adversary. .

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and today i'm incredibly pleased to introduce imac, our consumer product. this is imac. >> the imac was a computer that was meant to look like something you would want people to see in your house. it ushered in this new era where design started to matter. >> the imac was sexy. i had a blue one, and it had curves. it was built like a sports car. when people think of computers they think of boring. they think of beige. they think of it as utilitarian. apple made it fun. >> you can take it home, take it out of the box and be cruising the internet within ten minutes. and that's not something you can do on any other computer we know of. >> he added software to make it easier to connect to the internet. so the "i" in imac was for internet. >> it changed how people thought of apple and changed how people perceived what had been a dying

company. suddenly, people saw that there was a spark here. >> in the world of computers, it's kill or be killed. and the original whiz kid was thought to be dying an early death, but guess what? mac is back. >> a year ago, nobody would have predicted this. steve jobs, the head man at apple computer, hailed as the visionary hero who brought the company back from the verge of extinction. >> in 4 1/2 months, imac has become the number one selling computer in america. >> bill gates ultimately represents the computer genius' entrepreneur. steve jobs represents the entrepreneur's artist. >> you can say what you want about steve jobs, but he knew how to make people believe. >> in federal court in washington, d.c., today, a case of legal hardball and computer software. the u.s. government set out to prove that computer industry giant microsoft tried to bully the competition illegally into submission or out of business. >> as microsoft and justice department lawyers came to do battle at the federal courthouse, a bill gates

impersonator showed up adding a surreal touch. inside the courtroom, the real bill gates on videotape under oath in a deposition taken in august. >> the thing about a deposition is that the only thing that the witness can really do is to sit there and tell the truth simply and directly. the first two hours of the deposition was quite unexpected. >> from the stuff you've given me here -- >> i don't want you to read. i'm asking for your present recollection if you have one. >> i don't know what you mean by present recollection. what do you mean by internet software? the full breadth of your question? >> this person, who i know is brilliant and articulate and passionate, is withdrawn, playing word games, being evasive, doing everything that makes him look like he is not confident in his position. >> you recognize that this is a document produced from microsoft's files, do you not, sir?

>> no. >> you don't? >> well, how would i know that? >> david boies, the famous litigator. he has a photographic memory. he would ask gates in the deposition, do you ever remember saying this? no, i never would say something like that. boies, without looking at notes, would say, would you call up document 3,021, please. >> did you know that microsoft people were meeting with netscape before they actually met? >> i don't recall knowing in advance. >> government lawyer david boies revealed an internal microsoft memorandum written by gates three weeks before that meeting. i think there is a very powerful deal of some kind we can do with netscape, gates wrote. we could even pay them money as part of the deal, buying some piece of them or something. >> when i covered the trial, one of the things the judge said to me is he didn't believe bill gates. and that deposition was very instrumental in shaping the judge's decision. >> i've never seen a stamp like that. i've never used a stamp like that. >> haven't you seen stamps like that on every single one of the

documents you've been shown during this deposition? >> can you get me all the exhibits? >> just a waste of time. >> it is a waste of time. >> technology is hard to understand. their pitch to the judge was trust us. we're doing what we're doing for the consumer. the deposition made him and the company look like they were not trustworthy. >> because of this deposition and the snippets of it that played out day after day on national television, it was an incredibly precipitous decline in how most people viewed bill gates. >> he was in an environment that, unlike almost every other environment in which he operates, he did not control. no witness controls a deposition. no matter how rich, no matter how powerful. every witness has to sit there and answer questions. >> in words surprisingly blunt, judge thomas penfield jackson declared microsoft a monopoly. lawyers from the justice department in the 19 states that

sued microsoft immediately claimed victory. >> microsoft is a monopolist, and it engaged in massive anti-competitive practices. >> it drove bill gates crazy that the government was portraying him as some kind of evil force. was he ruthless as a businessman? yes. did he see himself as a ruthless businessman? no. he saw himself as someone who was advancing the common good. and the government didn't see it that way. it's ubrelvy. for anytime, anywhere migraine strikes. without worrying if it's too late or where i am. one dose can quickly stop my migraine in its tracks within 2 hours. unlike older medicines, ubrelvy is a pill that directly blocks cgrp protein, believed to be a cause of migraine. do not take with strong cyp3a4 inhibitors. most common side effects were nausea and tiredness. ask about ubrelvy and learn how abbvie can help you save.

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technology in business. you'd expect that, but some of the conversation might surprise you. it is not just tech talk. they are talking about sex. >> are you an adult? >> what she does is she loads pictures, mostly x-rated pictures, into her computer. and then customers anywhere in the world can call up laura's lair and see on their home computer this list. 15,000 descriptions of photos in language that's not always an suitable for tv. >> pornography is always the first to make money on any new technology and not just technology since computers. i mean, since the beginning. >> laura's customers pay to transfer these photos from her computer through the phone lines to their computer. >> okay. here it comes. >> how do i know? okay. so they don't have clothes on. you didn't tell me that. stop sweating. > the adult industry was very interested in figuring out how to make credit cards work. that had benefits for online commerce.

it boosted consumer acceptance of online credit card use. >> our little shopping carts that we now use are invented by pornographers. >> what was unknown was whether or not somebody could set up a website and actually make money. and the proof of concept of that was pornography. >> for the most part, entrepreneurs have not figured out a way to make profit on the internet. that is, until ebay came along. >> pierre omidyar started the auction site as a hobby. three years later, it has a market value of close to $6 billion and is a superstar on wall street. ebay makes its money by charging to list an item, then takes a small percentage of the final selling price if it sells. if you've got an item you want to sell like a 1967 green hornet lunch pail, for example, you write up a brief description, add a digital photo and decide on an opening bid. >> ebay really changed everything, and not because what they were offering was so

incredible and revolutionary. essentially what they were doing was they were automating the middleman. >> 600 million hits a month. >> that's right. >> that's a lot of people. >> that's right. >> how do you stop the unscrupulous? >> problems like that are really very, very rare on ebay. it's all based on trust. >> one thing ebay pioneered is that we rate each other so that future transaction participants can see whether you're a good person to deal with or not. it's in your financial interest to be looked up to and respected as a trustworthy transactional partner. >> on nbc news in-depth tonight, we're going to talk about the superstars of the stock market, those red-hot internet stocks. companies that in some cases didn't even exist a few years ago are now trading in the stratosphere. >> the whole dot-com bubble of the late '90s was based on this idea that what counted was not profit. what counted was eyeballs. if you could get enough people using your stuff, you would figure out a way organically

from that to make a profit. >> the daily volume, 3.7 million shares. we are almost a $2 billion company. >> people love these stocks. anything that has dot-com or net in its name, it goes like hot cakes. >> it's billed as the earth's biggest bookstore. not just the country's but the earth's. but you can't shop there unless you have a computer. it's a virtual bookstore. >> books, books, and more books. that's what they do at amazon.com. >> if you print the amazon.com catalog, it would be the size of seven new york city phone books. >> in the early '90s, jeff bezos looked at what the internet could be, and he decided that the internet could be anything. >> bezos started amazon.com at this modest ranch home in seattle in 1994. less than five years later, his idea of selling books on the internet has grown into a multibillion dollar business. >> the largest physical bookstores only carry about 175,000 titles.

amazon.com has 2.5 million titles in its online catalog. there's no way to have a 2.5 million title physical bookstore. >> bezos understood it would take decades to create the infrastructure of shipping and warehouses. he had this vision of completely upending the retail business. >> a couple things we have to get to which is often said about your company. you are losing money. >> i can tell you that i think it's good that we're losing money right now. it's important to amazon.com someday in the future, in the long term. >> we'd like to know what day that is. >> you can't be the everything store unless you are absolutely gigantic. bezos' philosophy was get big fast. earning money, making a profit, that will come later. for now, let's become the 800-pound gorilla. >> this year i think more and more people are going to do more and more of their shopping online. it's so much more convenient because you have almost unlimited selection. the convenience is going to make this the year that shopping comes of age on the internet. >> this was a time that allowed you to make choices as a

consumer without gatekeepers choosing things for you. you could decide, i want that, and you'd get it. if you don't live in a big city, you can still get big city stuff. >> the worldwide computer network called the internet has inspired more movies than any big deal, technological fad since, oh, the cb radio boom of the 1970s. the internet itself, however, is definitely exploding. >> it hit, and within like two years, it's become so powerful. >> we're sitting on the most perfect beach in the world and all we can think about is -- >> where can i hook up my modem? >> in 1999, we are culturally, socially, financially quite dependent on the internet. >> in washington today a special senate committee is preparing to release a fairly alarming report on the y2k millennium computer problem. they call it one of the most serious and potentially devastating events the nation has ever encountered. >> the brains of most computers,

the chips that do the thinking have tiny built-in clocks. many registered the year with only the last two digits assuming the first two are always 19. >> the problem was not the computer would think that it's 1900. the problem was it wouldn't know what to do. it would just break down and go eh, can't process this. >> it could trigger widespread computer failures, blackouts, and breakdowns of everything from home appliances to the global financial system. >> if we left things as they are right now, the military would effectively shut down. >> the pentagon will spend at least $4 billion to defuse the millennium bomb, and pentagon officials are confident they'll do it. but critics claim they started too late, and those thousands of fixes won't be done in time. >> many states have not yet updated their computers that run programs such as medicaid and food stamps, benefits that millions of families rely on. >> on new year's eve, 1999, i was prepared for the world to shut down. >> for a growing number of people, the year 2000 is not a

milestone as much as it is a sign of some sort of impending chaos. >> at home i got lots of water, generator, flashlights, batteries, canned food. >> what do you think's going to happen? >> i think there's going to be riots. >> get ready. computer failures will shut down electric utilities, prison gates will swing open at midnight, terrorist attacks will occur in larger cities, and wild dog packs will roam the streets. many of these books recommend stockpiling weapons as a precaution. >> i just wanted to be prepared in case anything happens for y2k.

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if you are just joining us, good morning. let us assure you all is well. apocalypse is not now. the sky is not falling. the dreaded millennium bug bugged out. >> for the most part, life went on as normal. the sun came up. people watched morning television and ate their wheaties. >> we have spent in this country $100 billion correcting y2k. commerce secretary bill daily says it amounts to $65 per taxpayer. >> part of the reason why disaster didn't occur on y2k was because the government and corporations realized the problem and spent months in intensive preparation for that moment. >> it was a big deal, a lot of

energy spent, a lot of fear. big nothing. >> good afternoon. microsoft was founded 25 years ago, and i've had the same job as ceo during that entire 25-year period. today, steve is going to step up to a new role, and he will be ceo of microsoft. >> by the time this trial was over, microsoft wound up settling, but microsoft was really, really chastened in the end by that long, grueling case. >> does the government's case against microsoft have anything to do with its change in leadership? >> no, absolutely not. if anything, this change underscores what a dynamic, competitive business we have. but it's not at all related. >> bill gates had been very successful. he had an enormous amount of money. he may very well have thought that given what he had already

accomplished, the highest and best use of his remaining years was to spend that money helping humanity. >> it was just a few months back, if your company ended in dot-com it was a good thing. but at the end of this brutal week on wall street, a lot of analysts think the internet bubble is ready to burst, and by this time next year, a huge number of those dot-coms might be dot gone. >> a year ago, investors were so eager to buy into the internet they were happily ignoring traditional measures of success. sales, profits and growth. but reality has now set in. >> these upstarts didn't have any income. they were saying, we are worth billions of dollars. where's your revenue? they didn't have any. >> when the venture capitalists stopped putting money in, you could time the bubble. you could say you know, if we all believe this fantasy, it works. if some of us stop believing, it's a prelude to its failure. >> most dot-com retail companies will be out of business by next

year, eliminating 25,000 out of 30,000 internet companies. >> what sort of message do you have for all of us as we look at what's happening to the dot-com businesses and the stock market? >> don't invest in dot-coms. >> the internet opened up a lot of things for people. it made things easier for people and that didn't change, bubble or no bubble. >> with more than one billion web pages out there, millions of web sites out there on the internet, no wonder the most common activity on the web is still searching, trying to find the information you're looking for. there really hadn't been very much new in the search engine field for years until something called google came along. >> a traditional search engine will take your search terms and say, oh, what pages have those search terms on them? maybe how many times they occur. google goes way beyond that. google will say, what do other web pages say about this page? >> google captured the entire web. they made a map of what linked

to what and found things with an accuracy that no one imagined would be possible. >> it turned out that google rather than netscape was the one that eclipsed microsoft. by the end of the decade, netscape is basically gone, but microsoft was, in fact, completely overtaken by exactly the thing bill was concerned about being overtaken by. netscape and google are part of the same thing, which was the ascendance of the web. >> the rate of change in our lives has grown faster and faster. the zeros and ones of computer language are literally transforming every part of our lives. >> when you have the little ones running around, to be able to go to my computer and grocery shop, it's incredible to be able to do that. >> what i found was another world, a world of caring, concerned people. >> once you become familiar with it, it becomes a friend, companion. >> you have a sense of possibility that geography used to deny you. without moving yourself, the world would come to you.

>> any student could instantly call up the text or pictures from any book in the smithsonian or tap into a supercomputer from nasa. a specialist at a huge city hospital could help diagnose patients at small rural clinics anywhere. >> the web is incredibly exciting because it is the fulfillment of a lot of our dreams that the computer would ultimately not be primarily a device for computation, but metamorphosize into a device for communication. >> it is the equivalent of the industrial revolution. it is the equivalent of electricity. the changes are just so profound. >> when we look back 100 years from now, this is the point where we're going to say, this is where everything changed. >> i wasn't prepared to translate that as i was doing that little tease. >> oh, that's right. >> that little mark with the "a" and then the ring around it. >> "at"? >> see, that's what i said. katie said she thought it was "about." >> yeah. >> oh. >> or "around." >> but i've never heard it said. i'd always seen the mark but never heard it said. and then it sounded stupid when

i said it, "violence at nbc." there it is. "violence@nbcge.com." >> allison should know. >> what is internet anyway? what, do you write to it like mail? >> no. a lot of people use it and communicate. i guess they can communicate with nbc writers and producers. allison, can you explain what internet is? hello and welcome to all you watching here in the united states, canada, and all around the world. i'm kim brunhuber. on "cnn newsroom," ukrainians raise their voices in unison as world leaders turn to diplomacy to end a standoff with later russia. we have reports from moscow and ukraine. police in canada move in on protesters to clear the blockade on north america's busiest international crossing. we look at whether it's working.