A Bridge to the Future and a Break With the Past

On this day in economic and business history...

On April 29, 1952, IBM IBM president (and soon-to-be CEO) Thomas J. Watson, Jr. announced to the public that IBM would soon introduce "the most advanced, most flexible high-speed computer in the world." It was called the Defense Calculator while in development, but IBM later rechristened it the 701 Electronic Data Processing Machine -- the company's first commercially available scientific computer. It would be the symbolic bridge between two eras of IBM -- from punched-card tabulators to digital computers and from the leadership of the first Thomas J. Watson to the second.

The 701 was one of the first, and also one of the last, vacuum-tube computers IBM built, but it nevertheless represented a profound shift in the company's strategy. Until that time, IBM had been primarily known as a manufacturer of tabulating machines, but Watson, Jr. recognized the company's need to push forward into the tumultuous new world of digital computing. It was a brutally primitive machine by modern standards, as it had a total memory of 2,048 words of 36 bits each, with a baseline memory access time of 12 microseconds. The 701's calculation speed was actually competitive with the legendary ENIAC despite costing much less for an annual rental (about $144,000 per year, versus $400,000 for the ENIAC) and taking up far less space.

The 701 is also notable for its role in two other seminal events in computing history. It was the first computer to demonstrate the potential for artificial intelligence, a feat it displayed while running a self-learning checkers-playing program designed by Arthur Samuel. It was also the computer that spawned the legendary Watson misquote (attributed variously to both father and son), "There is a world market for maybe five computers." Watson Jr. was speaking at a stockholder's meeting when he said: "The machine rents for between $12,000 and $18,000 a month, so it was not the type of thing that could be sold from place to place. But, as a result of our trip, on which we expected to get orders for five machines, we came home with orders for 18."

The market was never limited to just five computers. Five was simply a modest floor for IBM's expectations.

IBM's transition from tabulation to computation also ensured its return to the Dow Jones Industrial Average in 1979 after its removal in 1939. It would have made more sense to leave IBM in the Dow the entire time, as it returned a colossal 22,000% to shareholders in its four decades off the Dow. Much of that can be attributed to IBM's dominance of the early computing era: Thomas Watson, Jr. doubled IBM's revenue in his first four years as CEO -- an impressive feat for a company already pulling in nearly $1 billion in annual sales.

3-D for you and me, all the way from 1953
When was the first 3-D TV broadcast? You might be tempted to say it happened in the past few years, but the technology goes much further back -- all the way back to April 29, 1953. That day, a half-hour episode of Space Patrol, broadcast exclusively in Los Angeles, offered viewers the opportunity to watch the world's first experimental 3-D broadcast. To get the full experience, viewers had to pick up specially marked cereal boxes with 3-D glasses inside. It took many more years to push 3-D broadcasts to a larger audience, and even today the medium remains on the fringes of television popularity despite innovations that have promised to get rid of those goofy glasses once and for all.

The king of brewers
Despite coming in second in its own corporate name, the Busch family has historically been the driving force behind Anheuser-Busch InBEV . That central role became official on April 29, 1879, when Adolphus Busch and Eberhard Anheuser agreed to rename their thriving brewing company "Anheuser-Busch Brewing Association" from its earlier name of simply "E. Anheuser Company's Brewing Association."

The renaming was highly justified, as it was Busch who had built the regional brewer into one of the first companies to resemble a national enterprise. By the time the company was renamed, he had already established one of the earliest (and largest) refrigerated railroad car transport operations, with more than 40 railcars distributing pasteurized beer (also one of Busch's successful early adoptions) to far-flung parts of the United States. The development of Budweiser, a refreshing pilsner-style lager, also helped the company overcome regional taste preferences. Busch was a prescient marketer as well, and he would help develop a number of popular advertisements and brand-awareness campaigns.

Despite the onset of Prohibition, Anheuser-Busch survived by shifting to the production of goods using the basic elements of beer, such as yeast, malt extract, and even ice cream. Thanks to its superior national infrastructure, Anheuser-Busch was well-positioned to bounce back once Prohibition ended, and the destruction of many small brewers enhanced the company's market position. By the time Anheuser-Busch became part of the InBev empire in 2009, it had become by far the largest brewing company in the U.S., with nearly half of the entire U.S. beer-drinking market consuming Anheuser-Busch brands. This merger brought more than 100 years of Busch family control to an end.

End of an era
The last Oldsmobile ever built rolled off a General Motors assembly line on April 29, 2004, and a nameplate with 106 years of history drove off into the annals of history. Oldsmobile had claimed to be the first to mass-produce cars and the first to pioneer automatic transmissions, but ancient innovations couldn't save the brand from an image of antiquity. It had been part of General Motors for 96 years, having first been absorbed in 1908, and for decades it represented a middle ground between luxury and economy in the diverse GM lineup.

Sales had suffered as GM increasingly shared parts and processes across various tiers of automobiles, reducing Oldsmobile to little more than a nameplate identified more with great-grandparents than with great motoring experiences. By the turn of the 21st century, Oldsmobile was on its last leg, and some auto industry analysts were sounding the death knell. GM simply failed to differentiate Oldsmobile in a crowded mid-level market, and with so many well-defined alternatives to choose from, car buyers simply gave Oldsmobile a pass. In the end, it doesn't matter how old and historic a brand might be. It matters only that the brand means something in today's market.

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The article A Bridge to the Future and a Break With the Past originally appeared on Fool.com.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool recommends General Motors. The Motley Fool owns shares of International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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