Every election cycle since 1996 has been touted as a year of the Internet. In 2004, this biennial prediction finally came true.

Political Web sites transformed themselves from static billboards to vibrant centerpieces of campaign strategy. Vermont Gov. Howard Dean demonstrated how a politician could raise millions of dollars through the Internet, and President Bush and Sen. John Kerry followed suit. Bloggers hounded CBS's Dan Rather over whether memos about Bush's National Guard service were a hoax--and forced the network to offer a retraction.

Online political humor found its stride. A Santa Monica, Calif.-based company named JibJab won instant fame with its animated satire called "This Land." Its second Flash animation, "Good to be in DC," made its debut on NBC's Tonight Show.

Worries about "offshoring" flared around the time of the New Hampshire primary. Bush's economic adviser, N. Gregory Mankiw, caught flak for defending some forms of outsourcing as another form of free trade. Meanwhile, Kerry worried tech firms by railing against "Benedict Arnold CEOs" who were supposedly shipping American jobs overseas.

Politicians also discovered a loophole in campaign finance laws that handed Internet advertising an edge over TV and radio. Bush and Kerry took advantage of this double standard by running ads on their respective Web sites that were more inflammatory than the versions that appeared on the airwaves. Other than employing the Internet as a fundraising and attack vehicle, though, both men mostly ignored technology topics.

Computer scientists waged a doomed campaign to prevent e-voting machines from being used on Election Day unless they provided a physical paper trail. No election-endangering flaws, however, were confirmed in e-voting machines used in November.

Congress renewed a temporary moratorium that generally prohibits state and local governments from imposing taxes on Internet access, but didn't get around to a slew of other bills including restrictions on spyware. The entertainment industry failed to win congressional approval of its most sweeping proposals to target illegal file-swapping, but managed to wrangle some crucial legislative endorsements from the U.S. Justice Department that could come in handy next year.

The Federal Communications Commission emerged as an arbiter of what wiretapping rules would apply to services such as Internet access, voice over Internet Protocol (VoIP) and even instant messaging. Top Bush administration officials invoked terrorism as a justification for giving police backdoor access. But the FCC didn't give the FBI everything it wanted--effectively punting the decision to Congress in 2005.

--Declan McCullagh