Prior to the migration of networked computers to the Internet, UNIX computers communicated over various network protocols. One of these, the UUCP program and protocol (Unix to Unix Copy Protocol), was used. During its era, UUCP spawned an application service known as Usenet.

Usenet was originally designed by Duke University Computer Science graduate students Tom Truscott (interesting interview here) and Jim Ellis. The first program was authored by Steve Bellovin, a Computer Science graduate at the University of North Carolina. Their original goal was to create features available over UUCP for universities which were not yet connected to ARPANET (the early Internet) such as mail and file transfer and announcements.

On June 28th, 2001, Jim Ellis died of non-Hodgkins lymphoma at his home in Pennsylvania at age 45.

After attending a meeting where Truscott and Ellis discussed their ideas, Bellovin wrote the first version. It was comprised of 3 pages of UNIX Bourne shell scripting language. The application was designed to move files over the UUCP protocol between two computers over an modem telephone connection. The program was called "Netnews".

This early version, which was later rewritten in the C programming language, simply checked files within directories for their last-updated timestamp, and copied newer files if available. Connected systems included Duke University and the University of North Carolina. The Duke University Medical Center Department of Physiology was added in 1980.

In January 1980, Truscott and Ellis presented the Netnews idea to the USENIX conference in Boulder, Colorado. Truscott employed fellow Duke graduate student Steve Daniel to rewrite a newer version which was dubbed "Netnews Version A" (aka "A News").

As freely available public domain software with great usefulness, Netnews spread quickly throughout the UNIX/university world.

It is unclear when "Usenet" replaced the name "Netnews", but the relevance of Usenet over UUCP caused the two terms to often be used interchangeably (incorrectly). In 1982 a USENIX vote resulted in Usenet (the news service) keeping its name, but the UUCP network being renamed to UUCPNET.

This may explain why the term "Usenet" is a fairly ambiguous description of what is now a rather narrowly-defined Internet service. The "World Wide Web" and "Email", by contrast, are more descriptive. This is probably one reason why the Usenet retained a fairly under-the-radar following compared to these services as the Internet exploded in popularity in the mid nineties.

In 1982, Matt Glickman and Mark Horton authored Netnews Version B (aka "B News") in order to deal with increasing traffic loads. In 1984, Rick Adams at the Center for Seismic Studies took over maintenance of Version B.

In 1985, the Network News Transfer Protocol allowed Usenet traffic to be routed natively over TCP/IP rather than bootstrapped from UUCP, and today of course the majority of Usenet traffic is originated and distributed over the Internet.

Henry Spencer and Geoff Collyer at the University of Toronto took over in 1989 to write Netnews Version C for Netnews ("C News") to obtain even greater efficiency.

In the early 90's InterNetNews (INN) was developed to take greater advantage of the Usenet's continuous flow of messages made possible via NNTP vs the "store and forward" methods in use at that time.

References:

Bill Stuart's Living Internet http://www.livinginternet.com/u/ui_netnews.htm
Wikipedia http://en.wikipedia.org/wiki/Usenet
The Register http://www.theregister.co.uk/2001/06/29/usenet_creator_dead/
Rick Adams http://www.answers.com/topic/rick-adams