1998: The Turning Point
Still in its infancy, the second Russian Internet Forum (RIF) in 1998 could easily have faded into obscurity. The challenge was not only the economic crisis that halted many promising ventures, including those in the digital space, but also mounting contradictions within the industry. Fortunately, RIF stood firm and refused to be relegated to history.
Very Interesting Times
Formally, the internet appeared in Russia in 1990. Yet for the first four years, there was no .ru domain. Once that space was established, Runet grew rapidly and turbulently, overcoming major obstacles while generating new challenges along the way.
One was the intensifying battle over copyright. In 1998, IT specialist Maxim Moshkov launched lib.ru, the first personal online library. What began as a hobby quickly sparked copyright disputes, but ultimately survived to become a milestone in the era of legal digital content.
That year also saw Russia’s first high-profile cybercrime case. Hacker Vladimir Levin was arrested abroad while attempting to cash out stolen funds. Since then, “Russian hackers” have become a brand of their own, complicating life for companies and ordinary users alike.
Meanwhile, the first census of Runet showed about one million users. Social networks, still embryonic, were already being recognized by sociologists and political scientists as a new social instrument.
1998 also marked the start of Russian e-commerce. Domestic projects not only survived competition but went on to lead the market.
Each of these sectors was establishing rules, finding leaders, and learning to coexist in the digital landscape. In this sense, RIF was indispensable.
The Second Attempt Was Not a Flop
RIF 1998 was notable for the presence and active involvement of regional players. The internet was moving beyond Moscow and St. Petersburg, and provincial companies quickly found that attending the forum brought far greater benefits than the costs.
For system integrators, the event became a turning point. Their optimism about internet business gave experts confidence that the crisis could be overcome.
In fact, ROCIT even considered canceling the forum due to collapsing revenues, wary of appearing frivolous amid the turmoil. Half of Russia’s annual computer exhibitions were canceled that year.
But RIF went ahead at the Lesnye Dali resort—and the industry needed it. “If not real money and a multimillion audience, then at least the psychological sense of change. You could hear it in the tone of voices, the structure of the speeches, the deals being made in the halls,” recalled Anton Nosik, journalist, startup manager, and public figure.
Down with Unproductive Competition!
The buzzword of the time—repeated by journalists, business leaders, and entertainment executives—was “unproductive competition.” Endless disputes drained energy from those building Runet.
With no strong mechanisms for raising venture capital, IPOs, or investment funds, most projects relied on high-interest loans from acquaintances or founders’ personal funds. Business plans typically assumed profitability within six months, but reality proved otherwise. Many high-profile projects remained loss-making despite hype.
Meanwhile, the number of Russian users doubled each year from 1993 to 1997, website traffic grew accordingly, and offline audiences steadily converted into Runet users. The money, however, was scarce. For many, blaming competitors became an easy explanation for unmet expectations.
At RIF, the focus began to shift toward collaboration, cross-linking, and content partnerships. Prohibitions on mutual references between similar sites evaporated, replaced by link exchanges, shared traffic, and content swaps. A new formula of cooperation emerged, offering the market a way forward.
Where Are We?
The theme of RIF 1998 was: “The Internet in Russia and the World—Where Do We Stand?” The forum gathered leading service and information providers to take stock of achievements. Among the conclusions: “The state has noticed Runet and wants to divide it,” “Runet has spread beyond Moscow,” and “Russians are rushing online.”
Problems were also clear: low consumer purchasing power, lack of coordination among key internet players, and high entry barriers for investors.
By this point, the program had stabilized, featuring exclusive talks from industry experts, roundtables, mini-sessions, and the “People’s Program,” shaped directly by participants. Perhaps most importantly, RIF preserved its hallmark of behind-the-scenes networking—conversations that, even 25 years later, continue to define the viability of projects and the industry itself.
