Internet People and Products to Watch

Many people and products that came into their own last year will have even more impact in 2006.

By David Kirkpatrick, FORTUNE Senior Editor

January 13, 2006

Ever since a few college kids at the University of Illinois invented the Web browser in 1993, the Internet has never been boring. But it just gets livelier and livelier. What happens on the Internet matters more every year.

Last year, new ideas seemed to emerge daily, as bold inventors and leaders kept companies fecund with new services and software. And some of the coolest stuff didn't come from companies at all. Many people and products that came into their own last year will have even more impact in 2006.

Here are a few to watch:

The visionary: Jimmy Wales

When Wales created Wikipedia in 2001, he couldn't have imagined that his free open-source online encyclopedia would become so gigantic as to seem like an alternate Internet. Today, you can find information about almost any subject in its 895,000 articles -- and that's just in English! There are versions of various quality in 108 different languages, including 156,000 articles in Polish and more than 1,000 in Sicilian.

John Seigenthaler, a former government official, recently complained that he'd been slandered in a deliberately inaccurate Wikipedia post that linked him to the Kennedy assassination. Wales and crew tightened up Wikipedia's editing process in response. But only two weeks later, Nature published a carefully-conducted, peer-review examination of scientific articles in Wikipedia and the Encyclopedia Britannica. It found the two of roughly equal accuracy. What shocked many was the errors in Britannica -- about three per average science article.

Wikipedia is not just an encyclopedia. Wales and his team are conducting a gigantic experiment in human nature. The usefulness and accuracy of Wikipedia's articles -- which anybody can modify -- increases my optimism about the human race.

The hottest product: The iPod

Take those white earphones out of your ears so you can hear this one. With its sibling iTunes software, the iPod changed how we think about music, changed the music industry, and changed how many of us live -- thus those earphones. And it's turned Apple Computer into one of the hottest companies in the world.

Now, with new ally Intel, Apple appears poised to further its entertainment take-over. Will the Mac Mini -- repositioned as a home media server -- be the next iPod? We may know more as soon as next week's MacWorld conference.

Hottest product runner-up: The Firefox web browser

This open-source software continues to gain market share on Microsoft's Internet Explorer, because it's simple, well-designed, fast, and free.

Hot technology: Voice over Internet Protocol

eBay paid more than $2.6 billion in September for nearly revenue-free Skype. But that net-phone service is not the only evidence VoIP is changing telecommunications. Check out SunRocket -- just one of many high-quality VoIP services -- where residents of many American cities can buy a year of home calling for $199.

VoIP is not only cheaper than old-fashioned phone service. Increasingly it's better. Basic VoIP plans include freebies like caller-ID with name and online logs of all your incoming, outgoing and missed calls.

Hot site: Flickr

The deceptively simple photo-sharing site -- now used by millions -- was initially created by entrepreneurs Stewart Butterfield and Caterina Fake in Vancouver as a feature for a game. It became its own business only in February 2004, and then helped launch one of the hottest trends -- "data tagging," in which ordinary users mark Internet content with their own comments.

What one person says about a photo on Flickr helps another find what he's looking for. Like Wikipedia, it's another example of the growing power and control moving to the individual. Yahoo liked the idea so much it bought Flickr in March.

Hot Hire: Ray Ozzie

This software genius came to Microsoft when it acquired his company early in 2005, but by the end of the year he was in charge of what may turn out to be the biggest revolution in Microsoft's business ever. Ozzie is tasked with getting the corporate giant hip to the era of software delivered as a service, even as it continues to bring in $40 billion a year selling software installed on a company's servers or on your desktop. Keep your eye on Ozzie to see where the software industry is going.

Mogul of the moment: Rupert Murdoch

When Murdoch decided that the Internet really mattered, he moved with a unique decisiveness. His News Corp. spent $580 million in July for hot dating and music site MySpace, and followed that up with a $650 million purchase of gaming destination IGN. All the signs suggest Murdoch is just getting started.

Alliance to watch: Google and AOL

In December, Google bought 5 percent of AOL from Time Warner, AOL contracted Google to provide its search for another five years, and the two companies agreed on a raft of partnerships, mostly related to selling online advertising. We're only beginning to figure out what this tightened alliance means -- probably the beginning of a new wave of Internet advertising that will deepen the crisis already facing established media. (Time Warner, the parent company of AOL, is also the parent of CNN/Money and FORTUNE.)

Thinker to watch: Jay Rosen

If you want to understand why the media is in crisis, why companies like News Corp. have to change, and where journalism is going -- read New York University Professor Rosen's blog PressThink. He doesn't mince words.