Wired has done a fun job of documenting the history of “badday.mpg" -- which became a passaround hit in 1997, making it probably the first viral video of the Internet.
Mind you, as the author Joe Veix notes, they didn't call it a "viral video" back then, because the very concept of "virality", as applied to culture, wasn't yet mainstream. Given how slow most people's Internet connections were back then -- and, frankly, what a small percentage of the population was online -- and given that there weren't any big social-networking tools, it's amazing the 5-meg video spread so wide. The origins of the video:
Loronix was developing DVR technology for security-camera systems and needed sample footage to demonstrate to potential clients how it worked. So Licciardi and his boss, chief technology officer Peter Jankowski, got an analog video camera and began shooting. They filmed Licciardi using an ATM and pretended to catch him robbing the company’s warehouse. Licciardi decided he wanted to be a “disgruntled employee,” which gave his boss an idea. “It was pretty ad hoc,” Jankowski says. “We had some computers that had died and monitors and keyboards that weren’t working, so we basically set that up in a cubicle on a desk.” Jankowski directed the shoot, as Licciardi went to town on a broken monitor and an empty computer case. It took two attempts. “The first take, people were laughing so hard we had to do a second one,” Licciardi says.
The video spawned fan sites and conspiracy theories, Veix adds, so it presaged even more of our modern online culture than mere virality.