Netscape Communications Corporation

views updated May 23 2018

Netscape Communications Corporation

501 East Middlefield Road
Mountain View, California 94043
U.S.A.
Telephone: (650) 254-1900
Fax: (650) 528-4124
Web site: http://www.netscape.com

Wholly Owned Subsidiary of America Online, Inc.
Incorporated: 1994 as Mosaic Communications Corporation
Employees: N/A
Sales: $461 million (1999)
NAIC: 51121 Software Publishers; 541512 Computer Systems Design Services

Netscape Communications Corporation, based in Mountain View, California, is one of the leading providers of open software designed for use on the Internet and intranets. Netscape offers a line of client and server software, development tools, and commercial applications to create a complete platform for live online applications. Since spring of 1999, the company has been owned by America Online, Inc., the world’s largest online service provider.

Genesis of the Enterprise

James H. Clark, one of Netscape’s founders, was born into poverty in 1944 in Plainview, Texas. Although prone to mischief, such as smuggling whiskey on high school band trips, he eventually earned a Ph.D. in computer science from the University of Utah, after first studying physics. Clark had discovered computers during a stint in the Navy, which he joined after dropping out of high school. His first teaching job, at the University of Santa Cruz, soured him on academia, so he began freelancing as a consultant, which seemed even more dismal to him.

Clark turned down an offer from Hewlett-Packard, having developed a dislike for big corporate culture during an earlier stint with Boeing. In 1979 Clark went to work as a professor at Stanford University, where he made three-dimensional graphics the focus of his research for three years. Finding it difficult to sell his ideas to existing computer companies, Clark founded Silicon Graphics Inc. (SGI), a computer workstation manufacturer, in 1982. That company went public four years later and later garnered popular fame for animating the dinosaurs of the blockbuster movie Jurassic Park. Eventually Clark became frustrated at being unable to guide the company into low-cost, network-friendly hardware, and he resigned in February 1994, passing up $10 million worth of stock options. In 1995, SGF’s annual revenues were $2.2 billion.

Netscape’s co-founder, Mark Andreessen, was born in 1972 in New Lisbon, Wisconsin, to a salesman and his wife, who worked for Land’s End. As Andreessen grew up, the personal computer was also coming of age, and he wrote his first BASIC programs—video games—at the precocious age of eight. While a 21-year-old undergraduate who had first leaned toward electrical engineering, Andreessen was assigned to work on three-dimensional visualization software for the prestigious National Center for Supercomputing Applications at the University of Illinois at Champaign-Urbana. While working there for $6.85 per hour, he and six other peers created Mosaic, a graphical interface program for finding interesting Internet sites without the need for specialized programming knowledge. Within its first 18 months, Mosaic was credited with sparking a three-fold increase in the number of Internet users; the number of web sites grew by a factor of 100. After graduation, Andreessen began to work in Silicon Valley for Enterprise Integration Technologies, which produced Internet security products. Appropriately, his first connection with James Clark was electronic.

The future of the “information superhighway”—the theoretical network for carrying interactive video, e-mail, and all types of data—was subject of much speculation in 1993. Existing telephone lines and cable television seemed possible means. Clark had been considering the Internet as a possible carrier for interactive video, so he sent Andreessen an e-mail message the same day he resigned from Silicon Graphics.

After two months of introductions, discussion, and debate about potential products, Clark and Andreessen formed Mosaic Communications in April 1994. Instead of working on 3-D video games or interactive television, Andreessen proposed making Mosaic even better, creating a “killer” program to be known as “Mozilla.” Clark supplied $4 million to set up the company’s headquarters in Mountain View, California, while Andreessen led the development effort.

In November, the company was renamed Netscape, as the University of Illinois objected to the company’s use of the name “Mosaic.” Spyglass Inc., started by another U.I. alumnus, Tim Krauskopf, had licensed the name along with the software from the school. Later, Microsoft paid Spyglass for the rights to bundle Mosaic with its Windows 95 operating systems.

Early Growth

To say the Netscape grew exponentially in its first two years would be an understatement. Beginning with the two founders and an assistant, employment grew to over 250. Not surprisingly, the first new hires were five of Andreessen’s programming colleagues from the University of Illinois, as well as other programmers, software developers, and cryptographers. Clark also assembled the best management team he could find. In January 1995, the company hired Jim Barksdale away from AT&T’s McCaw Cellular division—a $2.3 billion a year business—to be Netscape’s CEO. Barksdale had earlier helped organize Federal Express into the state-of-the-art shipping dynamo it was to become. Andreessen served as vice-president of technology, in charge of overseeing product development, while Clark gave himself the job of “Head of PR.”

Like the University of Illinois had done with the original Mosaic, Netscape gave away most of its Netscape Navigator browsing software free of charge, which generated goodwill from the community of Internet users. Nevertheless, it was an extremely controversial move for such a new company. Netscape did manage to avoid packaging costs—interested parties simply downloaded the software via modem. It also established an ultimate base of virtual shoppers.

In order to make money, the company charged from $1,500 to $50,000 to supply companies with web servers, the means to establish web sites on the Internet. The most expensive systems could create “virtual” stores in which customers could examine photographs and descriptions of products, order and pay for them with credit cards. This market had plenty of room for growth: in the mid- 1990s, less than ten percent of Internet users participated in electronic commerce. By late 1996, it was estimated that more than 24 million North Americans used the Internet.

In December 1994, the company began selling improved versions of its browsing software for $40 per package. Resale partners included Apple, AT&T, Hewlett-Packard, Digital, IBM, Novell, to name only a few. By 1996, Netscape was selling its products in 29 countries. It also brokered arrangements with more than 100 Internet service providers to distribute Navigator to their customers. One of the keys to the system’s acceptance was its ability to work with all kinds of computers and operating systems, referred to as “open architecture,” a concept, in the form of TCP/ IP (Transmission Control Protocol/Internet Protocol), that made the Internet itself possible.

The openness of the company’s servers made them attractive for establishing internal corporate networks, dubbed “Intranets,” that could also communicate easily with outside networks. Soon, Netscape approached a similar market share in this lucrative arena as it had on the Internet, gaining 70 percent of the Global Fortune 100 companies as customers, including AT&T, Hewlett-Packard, Lockheed Martin, McDonnell-Douglas, Silicon Graphics Inc., CNN, Dow Jones, National Semiconductor, Motorola, and Eli Lilly. MCI was Netscape’s first major client.

Preparations for a Secure Future in the 1990s

In April 1995, a consortium of Adobe Systems, International Data Group, Knight Ridder, TCI, and Times Mirror bought an 11 percent share in the company. Netscape’s initial public offering (IPO) came in August 1995. The first day market capitalization was worth $2.2 billion. The stock originally sold for $28 a share; after a day of trading, it was worth $75. On December 5, it peaked at $171. Clark owned 32 percent of the company, which made him, according to press reports, the first Internet billionaire. As Time noted, the year was a record one for hightech IPOs in the United States: $8.5 billion in capital was created for these new ventures. IPOs in all industries raised $29 billion. The success of the initial public offering came in spite of the fact that Netscape had not yet posted a significant profit.

Key Dates:

1994:: James Clark and Mark Andreessen form Mosaic Communications, which is later renamed Netscape; begin offering software that allows users to browse on the Internet.
1995:: Company makes initial public offering; shares more than double in a single day.
1996:: Netscape acquires Collabra Software; becomes the most popular PC application in the world, with 38 million users; accuses Microsoft of anticompetitive business practices.
1997:: Netscape relaunches its website as Netcenter, in a move toward becoming a major Internet portal.
1999:: Netscape is acquired by America Online, Inc.

Although Bill Gates dryly characterized the excitement over new Internet stocks as “frothy,” Microsoft, too, entered the market. Late in 1995, Microsoft offered a version of its own browser, called Internet Explorer 2.0, free for downloading, as well as including a browser with the new Windows 95 operating system. Numerous strategic alliances were subsequently formed. While Netscape teamed with MasterCard to develop Secure Courier encryption standards, Microsoft and Visa announced the development of Secure Transaction Technology. In January 1996, Netscape and VeriFone, the largest credit card transaction processor, announced their plans to develop credit card payment systems for use over the Internet that would use the new Secure Courier technology. Soon afterward, Netscape teamed up with America Online, the largest provider in the United States of on-line services. The deal allowed AOL to offer improved Internet access through the Navigator browser (even though it had earlier spent $41 million to acquire similar technology) and strengthened Netscape’s market share. GTE and MCI had earlier agreed to use Navigator in their networks.

In spite of the competition, both Netscape and Microsoft worked with Hewlett-Packard to develop a Hypertext Markup Language (HTML) that could be printed as seen on screen. HTML displays graphics and highlighted words that can be selected with a mouse to access other pages of information. At the same time, however, 28 companies, including IBM and Apple, announced their support for the JavaScript language, a means of imbedding programs within web pages, developed by Sun Microsystems Inc. and Netscape.

Understandably, Netscape put a great deal of effort into making Internet transmissions secure. Nevertheless, in September 1995, two hackers at the University of California at Berkeley managed to undermine the Navigator security code. The company corrected the problem and posted warnings to users on the Internet. Damage to the company’s image appeared to be mitigated by the newness of the field, the newness of companies specializing in this area of technology, and the lack of reliable and easy-to-use web software elsewhere.

Netscape’s innovative way of attacking the security problem mirrored its marketing strategy; both involved giveaways. To strengthen its new browser software, the company distributed beta versions—test copies disseminated before the product’s commercial release. To spur the testers, Netscape, in its “Bugs Bounty” program, offered prizes ranging from coffee mugs to $1,000 for the first people to identify flaws, particularly security lapses.

In January 1996, Netscape purchased its neighbor Collabra Software Inc. for $108.7 million. One of Collabra’s main products was Share, a system enabling simultaneous e-mail discussions and document sharing among network users. Subsequent releases of Share combined these facilities with Navigator’s Internet access capabilities. In February, Netscape acquired Paper Software, Inc., which had recently developed 3-D programs for the Internet.

The Browser Wars

By June of 1996, Netscape Navigator had 38 million users, making it the most popular PC application in the world. Its fierce competitor, Microsoft, however, was far from giving up the fight. In August, the company released its 3.0 version of Internet Explorer, beating Netscape’s release of Navigator 3.0 by just a few days. In addition, Microsoft had enlisted the aid of some very powerful allies in its efforts to promote Explorer; both MCI Communications Corp. and America Online had agreed to offer Explorer 3.0 as their “first choice” browser.

In August 1996, Netscape sent a letter to the U.S. Department of Justice (DOJ), charging Microsoft with anticompetitive practices and urging the DOJ to investigate Microsoft’s business practices. Netscape maintained that Microsoft was using its dominance in personal computer operating systems to influence computer manufacturers, Internet service companies, and others into making Microsoft’s software the primary choice for accessing the Internet. Netscape also accused Microsoft of charging PC makers less for its Windows 95 operating system if they agreed not to pre-install other Web browser programs. The antitrust investigation of Microsoft would continue for years, and in 2000 a Federal judge would call for the break-up of Microsoft into two smaller companies.

In late 1996, Netscape added to its line of products when it introduced Netscape Communicator. Communicator was an integrated product designed to allow users to communicate, share data, and access information on Intranets and the Internet through open email, groupware, editing, and calendar features. The new product built on, and was intended for use with, only Netscape’s Navigator software. Another new product was introduced in early 1997: Visual JavaScript. Visual JavaScript was a programming tool written entirely in Java, which allowed developers to build applications that ran on both intranets and extranets without writing software code. Further product diversification followed, with the introduction of Netscape Publishing Suite, Netscape Netcaster, and other software applications.

In September 1997, Netscape relaunched its website as Netcenter. The new site offered access to Internet software, content, and community resources, grouped into easy-to-navigate categories. Three months later, the company added an online shopping site to Netcenter. These measures helped move Netscape away from being primarily a browser maker to being a significant Internet portal.

Changes in Policy, Focus, and Ownership

In January 1998, Netscape surprised the industry by announcing that it would make the source code for Communicator 5.0 available for modification and redistribution on the Internet. By so doing, the company believed it could benefit from the creative power of programmers on the Internet by incorporating their best enhancements into future versions of the software. As promised, Netscape posted the source code on the Internet on March 31. In the ensuing months, the company also released the code for its Messenger product and its Directory Software Developer’s Kit.

1998 was also a year of intensified focus on the Netcenter aspect of the business. In the spring, the company established a new division devoted solely to the development of Netcenter, and subsequently initiated a 60-day campaign to improve the site. The greatest change of the year, however, came in November, when Netscape announced that it had agreed to merge with America Online. The merger, a $4.2 billion stock-for-stock transaction, was completed in February 1999. Netscape co-founder Andreessen was named to the post of chief technology officer at America Online.

2000 and Beyond

Under the parentage of America Online, Netscape continued to build its presence as an Internet portal. Toward that end, the company enhanced its Netcenter site with such features as a Personal Finance channel, an improved Entertainment channel, America Online instant messaging, an Internet Security Center, an expanded Small Business channel, and various other additions. Netscape also continued to broaden its line of software products, with a continuous stream of new Internet-related applications and improved versions of existing applications. As the company moved into the future, it seemed apparent that it had successfully negotiated the transition from a “browser provider” to a multi-faceted Internet and intranet software developer and major Internet portal. With the backing of its parent company and its own strong record of success, Netscape appeared poised for continued growth on many fronts.

Principal Operating Units

United States; Japan; Europe; Latin America.

Netscape Communications Corporation

views updated May 14 2018

Netscape Communications Corporation

501 E. Middlefield Road
Mountain View, California 94043
U.S.A.
(415) 254-1900
Fax: (415) 528-4124

Public Company
Incorporated: 1994 as Mosaic Communications Corp.
Employees: 260
Sales: $80.7 million (1995)
Stock Exchanges: NASDAQ
SICs: 7372 Computer Software Publishers, Prepackaged; 7373 Computer Integrated Systems Design

Netscape Communications Corporation is one of the fastest growing software companies in the United States; in 1995, at least 70 percent of the World Wide Web’s ten million visitors used the company’s graphic interface to make exploring the Internet easier and more fruitful. The brain child of a computer industry veteran and a talented young programmer, Netscape has staked a considerable claim to a large part of one of the fastest-growing areas of consumer interest.

Genesis of the Enterprise

James H. Clark, one of Netscape’s founders, was born into poverty in 1944 in Plainview, Texas. Although prone to mischief such as smuggling whiskey on high school band trips, he eventually earned a Ph.D. in computer science from the University of Utah, after first studying physics. Clark had discovered computers in the Navy, which he joined after dropping out of high school. His first teaching job, at the University of Santa Cruz, soured him on academia, so he began freelancing as a consultant, which seemed even more dismal to him.

Clark turned down an offer from Hewlett-Packard, having developed a disklike for big corporate culture during an earlier stint with Boeing. In 1979 Clark went to work as a professor at Stanford University, where he made three-dimensional graphics the focus of his research for three years. Finding it difficult to sell his ideas to existing computer companies, Clark founded Silicon Graphics Inc. (SGI), a computer workstation manufacturer, in 1982. That company went public four years later and later garnered popular fame for animating the dinosaurs of the blockbuster movie Jurassic Park. Eventually Clark became frustrated at being unable to guide the company into low-cost, network-friendly hardware, and he resigned in February 1994, passing up $10 million worth of stock options. In 1995, SGI’s annual revenues were $2.2 billion.

Netscape’s co-founder, Mark Andreessen, was born in 1972 in New Lisbon, Wisconsin, to a salesman and his wife, who worked for Land’s End. As Andreessen grew up, the personal computer was also coming of age, and he wrote his first BASIC programs—video games—at the precocious age of eight. While a 21-year-old undergraduate who had first leaned toward electrical engineering, Andreessen was assigned to work on three-dimensional visualization software for the prestigious National Center for Supercomputing Applications at the University of Illinois at Champaign-Urbana. While working there for $6.85 per hour, he and six other peers created Mosaic, a graphical interface program for finding interesting Internet sites without the need for specialized programming knowledge. Within its first 18 months, Mosaic was credited with sparking a three-fold increase in the number of Internet users; the number of web sites grew by a factor of 100. After graduation, Andreessen began to work in Silicon Valley for Enterprise Integration Technologies, which produced Internet security products. Appropriately, his first connection with James Clark was electronic.

The future of the “information superhighway”—the theoretical network for carrying interactive video, e-mail, and all types of data—was subject of much speculation in 1993. Existing telephone lines and cable television seemed possible means. Clark had been considering the Internet as a possible carrier for interactive video, so he sent Andreessen an e-mail message the same day he resigned from Silicon Graphics.

After two months of introductions, discussion, and debate about potential products, Clark and Andreessen formed Mosaic Communications in April 1994. Instead of working on 3-D video games or interactive television, Andreessen proposed making Mosaic even better, creating a “killer” program to be known as “Mozilla.” Clark supplied $4 million to set up the company’s headquarters in Mountain View, California, while Andreessen led the development effort.

In November, the company was renamed Netscape, as the University of Illinois objected to the company’s use of the name “Mosaic.” Spyglass Inc., started by another U.I. alumnus, Tim Krauskopf, had licensed the name along with the software from the school. Later, Microsoft paid Spyglass for the rights to bundle Mosaic with its Windows 95 operating systems.

Early Growth

To say the Netscape grew exponentially in its first two years would be an understatement. Beginning with the two founders and an assistant, employment grew to over 250. Not surprisingly, the first new hires were five of Andreessen’s programming colleagues from the University of Illinois, as well as other programmers, software developers, and cryptographers. Clark also assembled the best management team he could find. In January 1995, the company hired Jim Barksdale away from AT&T’s McCaw Cellular division—a $2.3 billion a year business—to be Netscape’s CEO. Barksdale had earlier helped organize Federal Express into the state-of-the-art shipping dynamo it was to become. Andreessen served as vice-president of technology, in charge of overseeing product development, while Clark gave himself the job of “Head of PR.”

Like the University of Illinois had done with the original Mosaic, Netscape gave away most of its Netscape Navigator browsing software free of charge, which generated goodwill from the community of Internet users. Nevertheless, it was an extremely controversial move for such a new company. Netscape did manage to avoid packaging costs—interested parties simply downloaded the software via modem. It also established an ultimate base of virtual shoppers.

In order to make money, the company charged from $ 1,500 to $50,000 to supply companies with web servers, the means to establish web sites on the Internet. The most expensive systems could create “virtual” stores in which customers could examine photographs and descriptions of products, order and pay for them with credit cards. This market had plenty of room for growth: in the mid-1990s, less than ten percent of Internet users participated in electronic commerce. By late 1996, it was estimated that more than 24 million North Americans used the Internet.

In December 1994, the company began selling improved versions of its browsing software for $40 per package. Resale partners included Apple, AT&T, Hewlett-Packard, Digital, IBM, Novell, to name only a few. By 1996, Netscape was selling its products in 29 countries. It also brokered arrangements with more than 100 Internet service providers to distribute Navigator to their customers. One of the keys to the system’s acceptance was its ability to work with all kinds of computers and operating systems; i.e., its “open” architecture—the concept, in the form of TCP/IP (Transmission Control Protocol/Internet Protocol), that made the Internet itself possible.

The openness of the company’s servers made them attractive for establishing internal corporate networks, dubbed “Intranets,” that could also communicate easily with outside networks. Soon, Netscape approached a similar market share in this lucrative arena as it had on the Internet, gaining 70 percent of the Global Fortune 100 companies as customers, including AT&T, Hewlett-Packard, Lockheed Martin, McDonnell-Douglas, Silicon Graphics Inc., CNN, Dow Jones, National Semiconductor, Motorola, and Eli Lilly. MCI was Netscape’s first major client.

Preparations for a Secure Future

In April 1995, a consortium of Adobe Systems, International Data Group, Knight Ridder, TCI, and Times Mirror bought an 11 percent share in the company. Netscape’s initial public offering came in August, 1995. The first day market capitalization was worth $2.2 billion. The stock originally sold for $28 a share; after a day of trading, it was worth $75. On December 5, it peaked at $171. Clark owned 32 percent of the company, which made him, according to press reports, the first Internet billionaire. As Time noted, the year was a record one for high-tech IPOs in the United States: $8.5 billion in capital was created for these new ventures. IPOs in all industries raised $29 billion. The success of the initial public offering came in spite of the fact that Netscape had not yet posted a significant profit.

Although Bill Gates dryly characterized the excitement over new Internet stocks as “frothy,” Microsoft, too, entered the market. Late in 1995, Microsoft offered a version of its own browser, called Internet Explorer 2.0, free for downloading, as well as including a browser with the new Windows 95 operating system. Numerous strategic alliances were subsequently formed. While Netscape teamed with Mastercard to develop Secure Courier encryption standards, Microsoft and Visa announced the development of Secure Transaction Technology. In January 1996, Netscape and VeriFone, the largest credit card transaction processor, announced their plans to develop credit card payment systems for use over the Internet that would use the new Secure Courier technology. Soon afterward, Netscape teamed up with America On-Line, the USA’s largest provider of on-line services. The deal allowed AOL to offer improved Internet access through the Navigator browser (even though it had earlier spent $41 million to acquire similar technology) and strengthened Netscape’s market share. GTE and MCI had earlier agreed to use Navigator in their networks.

In spite of the competition, both Netscape and Microsoft worked with Hewlett-Packard to develop a Hypertext Markup Language (HTML) that could be printed as seen on screen. HTML displays graphics and highlighted words that can be selected with a mouse to access other pages of information. At the same time, however, twenty-eight companies, including IBM and Apple, announced their support for the JavaScript language, a means of imbedding programs within web pages, developed by Sun Microsystems Inc. and Netscape.

Understandably, Netscape put a great deal of effort into making Internet transmissions secure. Nevertheless, in September 1995, two hackers at the University of California at Berkeley managed to undermine the Navigator security code. The company corrected the problem and posted warnings to users on the Internet. Damage to the company’s image appeared to be mitigated by the newness of the field, the newness of companies specializing in this area of technology, and the lack of reliable and easy-to-use web software elsewhere.

Netscape’s innovative way of attacking the security problem mirrored its marketing strategy; both involved giveaways. To strengthen its new browser software, the company distributed beta versions—test copies disseminated before the product’s commercial release. To spur the testers, Netscape, in its “Bugs Bounty” program, offered prizes ranging from coffee mugs to $1,000 for the first people to identify flaws, particularly security lapses.

In January 1996, Netscape purchased its neighbor Collabra Software Inc. for $108.7 million. One of Collabra’s main products was Share, a system enabling simultaneous e-mail discussions and document sharing among network users. Subsequent releases of Share combined these facilities with Navigator’s Internet access capabilities. In February, Netscape acquired Paper Software, Inc., which had recently developed 3-D programs for the Internet.

Estimates of growth in the number of Internet users in the mid-1990s ranged from ten percent per month to one percent per day. The products of Netscape Communications, probably the fastest-growing company dedicated to developing Internet-related products, seemed likely to remain a preferred means for work, leisure, and commerce on the Internet.

Principal Subsidiaries

Netscape Communications Limited (U.K.); Netscape Communications Corp. Japan; Netscape Communications Corp. France; Netscape Communications Corp. Germany; Netscape Communications Corp. Canada.

Netscape Communications Corporation

views updated May 21 2018

Netscape
Communications
Corporation

501 East Middlefleld Road Mountain View, CA 94043
(650) 254-1900
www.netscape.com

According to Netscape's Web site, the California-based company "aims to be the leading provider of open software that links people and information over the Internet and intranets." From its birth in 1994 to its meteoric rise and fall, Netscape was the spark that touched off the global Internet boom, turning the information superhighway into the vast and profitable commercial mecca it is today. Millions of users log on daily to send messages, check stocks, buy merchandise, pay bills, and do any number of transactions—all of which would not have been possible without Netscape, founded by recent college graduate Marc Andreessen and venture capitalist Jim Clark.

In the Beginning

The story of Netscape begins at the University of Illinois at Champaign-Urbana, in the school's National Center for Supercomputing Applications (NCSA). Two young men, Marc Andreessen, who was a student at the time, and Eric Bina, a programmer employed by the university, began working on a program to create an Internet "browser" in 1992. The browser would serve as a way to navigate through the thousands and later millions of World Wide Web sites available to Internet subscribers.

The Web, however, was massive and complicated; users had to have a background in computer science even for the simplest search. As Andreessen later told Rick Tetzeli of Fortune magazine, 'Internet software was ten years behind the hardware. I realized that we could pull the software forward a few years." So he had enlisted Bina's skills as a top programmer to help write a software application to make the Web accessible to everyone.

Andreessen and Bina created their browser in about six weeks, completing it in 1993. Called NCSA Mosaic, the boys demonstrated the program in January, and began offering the browser free to Internet users. A few months later, Andreessen graduated and took off for southern California, where he had been offered a job. He was soon contacted by entrepreneur Jim Clark, who had cofounded Silicon Graphics, Inc. and was looking for a new venture. The millionaire met with the boy wonder, discussed the Internet and Mosaic, and agreed to put up $4 million in financial backing. The two finalized a partnership agreement, and Mosaic Communications Corporation was formed in April 1994.

Netscape at a Glance

Employees: 1,500
Senior Vice President and General Manager: James Martin
Subsidiaries: Netscape Communications (Japan) Ltd.; Netscape Communications Ltd. (UK); Netscape Communications S.A (France); Netscape Communications Gmbh (Germany)
Major Competitors: Microsoft Corporation; Excite; Infoseek; Terra Lycos; Yahoo!
Notable Products: Netscape Navigator; Netscape Communicator; Netscape Intuit; Netscape AOL instant Messenger; Netscape CommerceXert; Netscape Netcenter; Netscape Publishing System; Netscape Suitespot

The Birth of Netscape

By now Mosaic had truly revolutionized the struggling Internet, but there was a snag. Because it had been developed at the NCSA, which was part of the University of Illinois, the school owned the copyright to the program. Neither NCSA nor the university ever prevented Andreessen from using the program or giving it away, but the school would not allow Andreessen and Clark to use the Mosaic name if they intended to profit from its development. The matter was eventually settled in court, a battle that left the young and idealistic Andreessen especially bitter against his alma mater. In November 1994, Mosaic was renamed Netscape; Clark and Andreessen changed the name of their company to Netscape Communications Corporation, with Clark as chairman and chief executive officer (CEO) and Andreessen as senior vice president of technology.

Timeline

1994:: Mosaic Communications Corporation is founded by Marc Andreessen and James Clark; name changes to Netscape Communications Corporation.
1995:: Netscape goes public; expands to Europe and sales climb to $80 million.
1996:: Company opens offices in Latin America; sales hit $400 million.
1997:: Telecommunications companies adopt Navigator as their Internet portal.
1998:: Netscape embarks on joint ventures with Excite! and Qwest Communications; sales of $448 million.
1999:: AOL buys Netscape for $4.2 billion; Andreessen leaves and starts Loudcloud.
2000:: Company makes alliances with Google and Ask Jeeves.
2001:: AOL buys Time Warner for $163 billion and becomes AOL Time Warner.
2002:: Netscape represents only 10 percent of browser market; company files suit against the Microsoft Corporation.

The impact of Netscape was phenomenal; it became the most downloaded program on the Internet and according to International Data Corporation's figures at the time, was used by more than three-quarters of all World Wide Web surfers. Because the Netscape program was free, the company made its profits from its other applications that were for sale. Impressed by the success of the Netscape browser, businesses flocked to purchase other Netscape programs. Among Netscape's early customers were telecommunications giant MCI, Bank of America, and MasterCard, all of whom used Netscape technology for electronic commerce and to guarantee secure transactions over the Internet.

Soon hundreds of the world's largest businesses had come to trust Netscape and were using Netscape technology. At the same time millions of Americans—who had previously found the Web impossible to navigate or had been too intimidated to even try—began surfing the Internet in record numbers. Andreessen and Clark, meanwhile, were putting together a top-notch executive team. In January of 1995, they hired James Barksdale, formerly of AT&T Wireless, as president and chief executive of the company and its two hundred employees. Andreessen and his development staff, which was composed of several of the original NCSA team members, were tinkering with Netscape to make it better and faster. The new improved version, called Netscape Navigator 1.0, was released in April 1995, and was immediately downloaded by millions of Internet surfers for free.

The Inventor of the Internet

British computer scientist Tim Berners-Lee (1955-) is considered to be the inventor of the Internet. He developed the computer codes that created the World Wide Web in 1990. Unlike others, such as Marc Andreessen, who went on to make millions from the Web, Berners-Lee has not profited from his invention. Instead, he formed a nonprofit organization called the World Wide Web Consortium to maintain the integrity of the Internet. In an October 1995 conference at the Massachusetts Institute of Technology (MIT), Berners-Lee said: "I have (and still have) a dream that the web could be less of a television channel and more of an interactive sea of shared knowledge." In 1999, he was named one of the one hundred greatest minds of the twentieth century by Time magazine.

Navigator Takes to the Net

In March 1995, the company opened its first international office, in Tokyo, and formed a subsidiary, Netscape Communications (Japan) Ltd., to do business with the growing Japanese technology market. In the United States, it partnered with Adobe Systems Technology to develop on-line publishing software. This partnership brought interest from some of the country's leading publishers, who bought stakes in Netscape. Adobe, the Hearst Corporation, the Times-Mirror Group, Knight-Ridder, and TCI Technology Ventures all became part owners of Netscape; their investments helped finance the company's increasingly expanding business. Next came an official alliance with Sun Microsystems, Inc., makers of the Java programming software, to share and develop new technology.

In August 1995, Andreessen and Clark took Netscape public, meaning they sold shares of the company on the stock exchange in order to earn money for expansion. Because the company had such a big impact on computer and Internet industries, Netscape stock was hot and everyone wanted to buy a share. Each share was originally offered at $28. The demand, however, was so great that the price rose to $71 per share. At the end of the day, $1 billion in stock sales had been racked up, which meant the stock held by Clark and Andreessen was suddenly worth millions.

The success of Netscape had turned Clark into a billionaire and Andreessen into a megamillionaire. But with Netscape's prosperity came stiff competition, mainly from the Microsoft Corporation and its own whiz kid founder, Bill Gates (see Microsoft Corporation entry). Microsoft had developed Windows, the most used operating system in the world. An operating system is the program that controls a computer's different functions. The company now had its eye on the browser market.

Netscape developed Navigator 1.2 to compete with Microsoft's Internet Explorer 1.0, which was introduced in the fall of 1995. While Navigator 1.2 worked well with Windows, Microsoft had the advantage. Internet Explorer 1.0 was bundled, or included, with its Windows operating system, which was already programmed into most of the world's computers. This meant that people who purchased a computer with Windows on it would probably just use Internet Explorer and not bother with Netscape Navigator.

It was not Explorer, however, that posed the greatest risk to Netscape; it was the slew of other search engines that had burst on the scene. Yahoo!, Lycos, and Excite were all created by enterprising college students and had found their way onto the Internet. As the competition heated up, Netscape began losing some of its users to the newcomers.

Cyber Millions

In the fall of 1995, Netscape passed two important milestones: it made its first acquisition, Collabra Software Inc., and it opened three European offices, in London, England; Paris, France; and Munich, Germany. In support of its new offices, versions of Netscape's many programs were available in French and German, along with Japanese. By the end of the year the company had signed a profitable deal with International Business Machines (IBM) to combine Netscape programs with IBM's extensive voice, data, and video networks. Netscape finished 1995 with revenues of over $80 million and more than three hundred employees.

In 1996, Netscape continued to enter partnerships, branching out in Latin America with several new distributors in Argentina, Bolivia, Brazil, Chile, Paraguay, and Peru. Its increasingly sophisticated on-line programs also appealed to a who's who of famous companies and organizations, including Apple Computer, Inc., the Walt Disney Company, FedEx Corporation (see entries), J. C. Penney, the New York Times and Los Angeles Times newspaper empires, and Sprint. Everyone, it seemed, wanted Netscape's know-how, including on-line service provider America Online (see AOL Time Warner entry). Oddly enough, Netscape did not make a deal with America Online—which would figure prominently in its future and near demise.

By the end of 1996, the Netscape Web site was being visited more than one-hundred million times per day. The site became a hub that could take surfers to a host of other sites; potential customers could also download trial versions of Netscape's many best-selling programs. Navigator was the browser of choice for fifty-five million personal computer users, and sales climbed to an astonishing $400 million. The following year, Netscape had a work force of over twelve hundred and still led the browser market. Microsoft, however, was gaining ground.

AOL Enters the Picture

By 1998, Internet browsers, also known as portals, were widely available from many sources. In response, Netscape formed an alliance with Excite in the hopes of wrestling many of its surfers back from Yahoo!, which had become the world's number-one search engine, with more than a hundred million visitors each month. While Netscape battled Yahoo, the federal government had decided to take Microsoft to court for unfair business practices. Many in the computer industry, from software to hardware producers, applauded the action, believing Mircosoft had unfairly attempted to control all aspects of the computer marker. Several software developers, including Andreessen, were called to testify against Microsoft. In the midst of the court battle, American Online (AOL) announced in late 1998 that it was going to buy Netscape.

The acquisition was big news for Netscape, especially since AOL used Microsoft's Internet Explorer as its portal. As the details of the $4.2 billion deal were worked out, the company tried to conduct business as usual. In January, Netscape successfully acquired AtWeb Inc., an on-line services company. Two months later, in mid-March 1999, the sale of Netscape to AOL was completed and Andreessen was tapped to move from Netscape to AOL as its chief technology officer. Andreessen joined AOL, but did not stay long. He moved to a part-time position as "strategic adviser," then left AOL in September 1999 to start a new company, Loudcloud, which was a program developer for Internet sites.

A New Century

As the new millennium approached, Netscape adjusted to life as part of AOL. The company renewed old alliances and made new ones with some of the Internet's leading search engines, including Google and Ask Jeeves. In 2000, Netscape went political with on-line coverage of both the Republican and Democratic presidential conventions, and announced that over one hundred million surfers had downloaded Netscape browsers over the past two years.

By 2002, Netscape was eighteen years old and its legendary browser was in its seventh version. The company was also part of the massive AOL Time Warner empire, which had sales nearing $40 billion annually. Netscape was not, however, the creature it once was; its share of the browser market had slipped to only 10 percent and competitors had caught up to the company in all phases of its technology. Marc Andreessen believed the answer to Netscape's future was squarely in AOL's hands. If the on-line services giant bundled Netscape with its other applications, instead of using Microsoft's Internet Explorer, Netscape would be immediately available to all of AOL's millions of subscribers. AOL considered the option, but nothing was finalized.

The future of Netscape was wide open. Perhaps as a last ditch effort, Netscape filed suit against Microsoft for unfair business practices, the very same issues pursued by the government since the mid-1990s. While many debated the merit of the suit, others believed it was too little too late for Netscape. With the backing of AOL Time Warner, however, there was still a chance Netscape could rebuild—it was after all, the company responsible for unlocking the Internet for millions of global users. For this accomplishment alone, it will be remembered and has been written into history.

Leading American Businesses

Netscape Communications Corporation

views updated May 29 2018

Netscape Communications Corporation

founded: 1994

Contact Information:

headquarters: 501 e. middlefield rd.
mountain view, ca 94043 phone: (415)254-1900 fax: (415)528-4125 email: [email protected] url: http://home.netscape.com

OVERVIEW

Netscape Communications Corporation develops, sells, and supports computer software products for the Internet and other networks. These products help individuals and organizations worldwide exchange information, discuss items of interest, research a wide variety of subjects, and conduct business electronically.

The company was founded in Mountain View, California in April 1994. Capitalizing on the popularity of the World Wide Web and the Internet, the company became a publicly traded company in August 1995. On the first day of trading, shares soared to $71, after initially being offered at $28 per share.

The company's software line includes three groups of products: client or browser software, server software, and commercial applications. Its browser, Netscape Navigator, can be used with a variety of computer operating systems and enables users to locate and view information on the World Wide Web. The server line of products allows companies or individuals to create and maintain World Wide Web pages for publishing information and conducting business on the Internet. The company's commercial applications software enables companies to conduct full-scale electronic business.

COMPANY FINANCES

In December 1997, Netscape posted annual revenues of $533.9 million, up from $346.2 million in 1996 and $80.7 million in 1995. Due to increased costs of doing business, however, total net income fell substantially between 1996 and 1997, from $20.9 million to a loss of $115.5 million. As of June 1998, stock shares were selling at $23, down from a high of $47 in July 1997, but up from a low of $17 in February 1998. More than 3 million shares are held by investors.

ANALYSTS' OPINIONS

According to David Rosenfield in Value Line Investment Survey, "Netscape's survival depends on the degree to which corporations adopt intranets—private corporate networks that use the Internet ... and the number that choose Netscape as their strategic vendor." It is expected that spending for Internet and intranet software will increase dramatically over the next few years; however, Netscape faces stiff competition from Microsoft Corporation and IBM, two of the most powerful companies in the industry.

HISTORY

Marc Andreessen, one of the cofounders of Netscape Communications Corporation, was a student at the University of Illinois when he began working at the University's National Center for Supercomputing Applications in 1993. Recognizing the potential of the World Wide Web and the Internet, Andreessen and several other students wrote a software program called Mosaic. Mosaic, a browser, was a great step forward in making it easier to use the vast amounts of information offered on the World Wide Web. Mosaic software was offered free of charge by the University, and in the first year more than two million copies were downloaded.

In April 1994, Andreessen and James H. Clark co-founded a company called Mosaic Communications Corporation. Six months later, the name was changed to Netscape Communications Corporation. Netscape Navigator, a more powerful version of the earlier Mosaic software program, was one of the company's first products.

In December 1994, the company was almost out of money, and employees were being laid off. At the time, new chief executive James Barksdale was determined to try to make the company a success. Barksdale is quoted by Robert D. Hof in Business Week as saying, "This rocket is going to take off, or it's going to crash into the ground. So, ladies and gentlemen, strap it on!"

STRATEGY

Netscape Communications Corporation's strategy has been to identify the networking needs of businesses and to develop solutions to fit those needs. Speed is critical to being successful in high-tech companies. Changes occur almost every day and competitors relentlessly pursue an advantage. According to Peter Currie, Chief Financial Officer of Netscape Communications Corporation, "a year's worth of change happens in a couple of months—a pace known as 'Internet Time'." Companies can succeed only by offering new and better products sooner and at less expense than everyone else.

Marketing is also extremely important. Netscape Communications Corporation's web site has been critical to its success and has almost four million visitors a day. The home page provides users with technical support, company news, and access to the company's electronic store, where goods and services can be purchased.

INFLUENCES

Use of the World Wide Web, virtually unheard of in 1994, grew by leaps and bounds in 1995. Netscape Navigator made the Internet popular and usable by millions of people. Initially, the company gave most copies of Netscape Navigator away for free, which gave tremendous name recognition to the company. Within a short period of time the company controlled 85 percent of the World Wide Web browser market. First year sales were approximately $81 million. By 1996, the company had grown from 400 employees to almost 1800, with sales of $346 million, a one-year growth rate of a staggering 329 percent.

CURRENT TRENDS

Netscape Communications Corporation has been able to move quickly to establish itself in a very short time. However, other companies, anxious to reap the benefits of the explosion in use of the World Wide Web, are also working on "Internet Time." Chief among these companies is Microsoft Corporation, which is determined to become the dominant provider of software for the World Wide Web. Microsoft introduced its Internet Explorer browser in 1995, and incorporated it into its Windows 95 operating system. Netscape countered with its "Customer Choice" campaign in December 1997, allowing Internet Explorer users to switch to Navigator easily while online.

Microsoft Corporation's entry into the development of products for the World Wide Web cut into Netscape Communications Corporation's revenues. Stock prices fell and market shares dropped. Still, the company increased revenues for the fourth quarter of 1997 by 9 percent over the same quarter the previous year.

Competition is fierce among software developers that hope to provide products for companies that are looking for new ways to reach increasing numbers of Internet users. Commercial use of the Internet is expected to grow dramatically through the year 2000, and companies are expected to use Internet technologies to improve internal business operations as well. Netscape Communications Corporation currently offers a broad line of software products and tools, targeted primarily to corporate intranets and commercial applications. However, it competes against older, more established companies such as Microsoft Corporation, Oracle Corporation, and Lotus Development Corporation, a subsidiary of IBM—companies with much larger resources for research and development of new products.

PRODUCTS

Netscape Communications Corporation offers a wide array of products that link people and information over the Internet and intranets. The products offer client or browser software, server software, and commercial software. The browser product line includes Netscape Navigator and a number of other software enhancements designed to extend its capabilities. Server products allow providers to create, organize, and present networked information including World Wide Web access and e-mail. Server products include: Netscape Mail Server; Netscape News Server; Netscape Proxy Server; Netscape Enterprise Server; and Netscape Catalog Server. These five products are sold separately or are offered as a group known as Netscape SuiteSpot. Other server products include Netscape Communications Server; Netscape Commerce Server; and Netscape FastTrack Server. A new version of Netscape SuiteSpot and an enhanced client, Netscape Communicator, are designed to work together to provide new and enhanced server/client software .

FAST FACTS: About Netscape Comunications Corp.

Ownership: Netscape Communications Corporation is a publicly owned company traded on the NASDAQ stock market.

Ticker symbol: NSCP

Officers: James L. Barksdale, CEO; Peter L.S. Currie, CFO

Employees: 2,000

Chief Competitors: Netscape produces tools for Internet, intranet, and other computer network platforms. Its primary competitors include: Microsoft Corporation; Lotus Development Corporation, a subsidiary of IBM; and Oracle Corporation.

The company's commercial software products can be used to help organizations and businesses sell goods and services on the Internet. Products include: Netscape Merchant System, which allows users to display and sell goods electronically; Netscape Publishing System, designed for users who want to create subscription-based online publications; and Netscape Community System, which gives organizations the ability to create virtual communities.

CORPORATE CITIZENSHIP

A company-wide food and teddy bear drive is held during the Christmas season to assist needy families, and employees are involved in the "Christmas in April" project, which provides home repair help to low income and elderly residents. Many employees participate in the San Francisco AIDS Walk and in marathons to raise money for leukemia research.

GLOBAL PRESENCE

Use of the Internet is increasing around the world, and Netscape Communications Corporation has ten offices in Europe and five in the Asian Pacific region. Many large international companies, including those in Germany, Sweden, Thailand, and Mexico, are using Netscape browser and server software for their corporate intranets. The company has World Wide Web sites in more than ten foreign languages to help customers and users around the world. Ninety-two of the top 100 companies listed on Fortune Magazine's top 500 are Netscape customers, according to the company.

CHRONOLOGY: Key Dates for Netscape Communications Corp.

1993:: Marc Andreessen begins work at the University of Illinois' National Center for Supercomputing Applications
1994:: Andreessen and James H. Clark form Mosaic Communications Corporation; change name to Netscape Communications Corporation
1995:: Becomes a publicly traded company
1996:: Company grows from 400 to 1800 employees; has sales of $346 million, a one-year growth rate of 329 percent
1997:: Launches "Customer Choice" campaign to counter Microsoft

EMPLOYMENT

Netscape Communications Corporation's employees are accustomed to working hard and making decisions quickly. Employees must be able to adjust to the rapid changes occurring in the technology industry, and twenty-hour days are not unusual. Rollerblading is enjoyed at the company, and bronco rides and inflatable slides have provided entertainment at parties. Human diversity in the workforce is valued at the company, which has a strong belief that an organization with human diversity is better able to meet the major business challenges of the twenty–first century. Project DIVA (Diversity Involves Valuing All) is an outreach program designed to achieve cultural diversity at all levels within the company.

SOURCES OF INFORMATION

Bibliography

"frequently asked questions about the netscape educational and nonprofit program." netscape communications corporation home page, 20 april 1997. available at: http://home.netscape.com/comprod/sales/educhar_faq.html#1/.

hof, robert d. "netspeed at netscape." business week, 10 february 1997.

holzinger, albert g. "netscape founder points, and it clicks." nation's business, january 1996.

kaplan, david. "nothing but net." newsweek, 25 december 1995.

"netscape communications corporation's company backgrounder." netscape communications corporation home page, 1998. available at http://home.netscape.com/company/about/backgrounder.html.

netscape communications corporation home page, 20 april 1997. available at http://www.sec.gov/archives/edgar/data/944458/0000912057-96-027513.txt/.

"a new electronic messiah." the economist, 5 august 1995.

rosenfield, david. "netscape comm." value line investment survey, 7 march 1997.

talbott, shannon. "creative staffing drives success." personnel journal, 9 march 1996.

tetzeli, rick, and shaifali puri. "what it's really like to be marc andreessen." fortune, 9 december 1996.

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. netscape's primary sics are:

7372 prepackaged software

7375 information retrieval services

Company Profiles for Students

Netscape Communications Corporation

views updated May 14 2018

NETSCAPE COMMUNICATIONS CORPORATION

Netscape Communications Corporation was founded in 1994 as Mosaic Communications Corporation by James H. Clark (b. 1944) and Marc Andreessen (b. 1972). Clark, a former Stanford University professor who studied three-dimensional graphics, had started Silicon Graphics Inc. in 1982 (the company became famous for animating the dinosaurs in the movie Jurassic Park ). Clark resigned from Silicon Graphics in February 1994.

Andreessen grew up with computers and wrote his first basic program when he was eight. As a 21-year-old undergraduate he was assigned to work on three-dimensional visualization software for the prestigious National Center for Supercomputing Applications at the University of Illinois at Champaign-Urbana. Together with six other computer specialists, he created a graphical user interface (GUI) for finding Internet sites. The GUI, called Mosaic, enabled users to find sites without having knowledge of specialized programming languages. Mosaic was credited with making the Internet much more accessible. It was released on the Internet in January 1993; during its first 18 months of availability, the number of Internet users tripled and the number of sites grew a hundredfold.

Andreessen and Clark met when Clark sent Andreessen an E-mail message on the same day he resigned from Silicon Graphics. Clark was interested in using the Internet to carry interactive video. Two months later, in April 1994, Clark and Andreessen formed Mosaic Communications Corporation. Andreessen proposed creating a super program known as "Mozilla." While Clark provided four million dollars to set up headquarters in Mountain View, California, Andreessen led the development effort. After the University of Illinois objected to the use of the name "Mosaic," the company became Netscape Communications Corporation in November 1994.

In December 1994 the company shipped its new Web browser, Netscape Navigator. Jim Barksdale, formerly with AT&T's McCaw Cellular division and Federal Express, was hired in January 1995 to be the chief executive officer. Andreessen served as vice president of technology with the primary responsibility of overseeing product development.

In a somewhat controversial move, Netscape chose to give away its browser for free, perhaps following the model established by the University of Illinois with Mosaic. Interested users simply downloaded the software from the Internet via modem. The easy availability of Navigator created a lot of goodwill for the company among the Internet community, and it also established a base of users. Within four months an estimated 75 percent of all Internet users were using Navigator.

Netscape was making money from the sale of its web servers, supplying them to companies for $1,500 to $50,000. The high-priced systems enabled companies to create online or "virtual" stores where customers could view products and purchase them online with credit cards. It was a time when electronic commerce over the Internet was in its infancy, and Netscape was providing a key element that would help it achieve explosive growth in the coming years.

While one version of Navigator was available for free, an improved version with more features was offered for $40. Netscape signed up resale partners, including Apple, AT&T, Hewlett-Packard, IBM, and others, and by 1996 the company was selling products in 29 countries. By early 1996 it had signed up more than 1,000 Internet service providers to distribute Navigator to their customers. Netscape Navigator featured an open architecture that enabled it to work with all kinds of computers and operating systems. The open architecture concept, known as TCP/IP (Transmission Control Protocol/Internet Protocol), was the same concept upon which the Internet was based.

Major companies also found that Netscape's web servers could communicate easily with outside networks. These became servers of choice in corporate intranets. Netscape gained a 70 percent market share among the Global Fortune 100 companies in the lucrative intranet market.

Following the introduction of Netscape Navigator, the company was almost out of money. It received much-needed equity capitalization when it sold an 11 percent interest to a consortium of media and computer companies that included Adobe Systems, International Data Group (IDG), Knight-Ridder, TCI, and Times Mirror. Without having turned a profit, Netscape went public in August 1995. Its initial public offering (IPO) was one of the hottest of the 1990s, perhaps foreshadowing the skyrocketing prices of Internet stocks that would take place later in the decade. Netscape stock was first offered at $28 a share; it was worth $75 after one day of trading, and it peaked at $171 on December 5, 1995. The company's first-day market capitalization was $2.2 billion.

Microsoft Corporation provided the first serious competition to Netscape Navigator when it introduced Microsoft Internet Explorer 2.0 in 1995. Earlier that year Microsoft had licensed Mosaic from Spyglass, Inc., which had obtained the rights to the Internet browser from the University of Illinois. Microsoft offered free downloads of Internet Explorer and bundled it with Windows 95. Over the next three years Netscape's share of the browser market would decline from a high of 80 percent to 40–50 percent. Barksdale would later accuse Microsoft of "unfair competition," and he was the first witness called by the Department of Justice in its 1998 antitrust suit against Microsoft.

During 1995 the development of electronic commerce was hampered by the lack of a secure payment system that would enable customers to make credit card payments over the Internet. Netscape teamed with MasterCard to develop the Secure Courier encryption standard, while Microsoft and Visa joined forces to develop the Secure Transaction Technology. In January 1996 Netscape teamed with Verifone, the largest credit card transaction processor, to develop a credit card payment system for the Internet using the Secure Courier technology. In September 1995 Netscape suffered a security breach when two hackers at the University of California at Berkeley cracked the security code in Netscape Navigator. Netscape corrected the problem and posted warnings on the Internet. It also established a "Bugs Bounty" program, giving prizes to users who identified flaws and potential security problems with the software.

Netscape entered into several strategic alliances in 1995 and 1996. America On-Line (AOL), the nation's largest provider of on-line services, agreed to offer improved Internet access for the users of Netscape Navigator. Both Netscape and Microsoft worked with Hewlett-Packard to develop a Hypertext Markup Language (HTML) that could be printed as seen on screen. Netscape also worked with Sun Microsystems Inc. on the development of JavaScript language, which allowed programs to be imbedded in web pages.

Netscape acquired software developer Callabra Software Inc. in January 1996 for $108.7 million. Callabra's main product was Share, a system that enabled simultaneous E-mail discussions and document sharing among network users. In February Netscape acquired Paper Software Inc. and its 3-D programs for the Internet. Since its founding in 1994, Netscape had enjoyed phenomenal growth, with sales rising from one million dollars in 1994 to $81 million in 1995 and $346 million in 1996. After reporting losses in 1994 and 1995, the company turned a $21 million profit in 1996.

Netscape continued to form joint ventures in 1996 and 1997. Netscape and GE Information Services joined to develop electronic commerce software, with Netscape acquiring full ownership in November 1997 for $56.1 million created Actra Business Systems. Together with Novell it established Novonyx, and Netscape and Oracle formed the joint venture Navio Communications Inc. to produce consumer-oriented Internet software. Oracle purchased Navio from Netscape for $60 million in May 1997.

In January 1997 Netscape joined an alliance with Oracle, IBM, and Sun Microsystems to develop common standards for all of the company's software products. The NOIS alliance, as it came to be known, was seen as a response to Microsoft's growing dominance in several key sectors of the software market. Netscape also released Communicator, the successor to Netscape Navigator. During the year Netscape improved its position in the business software market by acquiring Digital-Style, which made Web graphics tools, and Portola Communications, which made messaging systems.

Although Netcape's annual revenues reached $534 million in 1997, the company reported a surprising $88 million loss. It laid off 300 workers. Almost immediately thereafter, reports began to appear that the company was for sale. The value of Netscape's stock had fallen dramatically. With $261 million in the bank and no debt, it appeared to be a desirable takeover target. IBM, Oracle, Sun Microsystems, and AOL were all reported to be potential suitors.

In April 1998 Netscape acquired Kiva Software, strengthening its position in the web server market. Later in the year it acquired AtWeb, which provided automated Web site management and marketing services, and NewHoo, a directory-based search service. These acquisitions would enhance Netcenter, Netscape's portal to the Internet.

After nine months of takeover rumors, AOL announced in November 1998 that it would acquire Netscape for $4.2 billion in a stock-for-stock transaction. After passing regulatory approval in March 1999, the transaction was completed, creating what The Economist called the "world's most powerful Internet company." As part of the deal Sun Microsystems would pay $350 million to license AOL/Netscape software and sell $500 million worth of servers to AOL/Netscape. With the acquisition, AOL now had two competing Internet sites, America Online and Netscape's Netcenter, both of which enjoyed extremely high traffic.

Topic overview

A lot of us were rooting for Netscape. We didn't want to see it get downsized, restructured or swallowed up. Netscape wasn't just another Silicon Valley software company, any more than Apple is just another computer maker. Netscape stood for something grand, something transcendental and empowering. It gave people the tools to communicate their ideas cheaply or sell their stuff to anyone on the planet without going through middlemen, censors, gatekeepers, or even the IRS.

Netscape Communications Corporation

Netscape Communications Corporation

Genesis of the Enterprise

Early Growth

Preparations for a Secure Future in the 1990s

Key Dates:

The Browser Wars

Changes in Policy, Focus, and Ownership

2000 and Beyond

Principal Operating Units

Further Reading

Netscape Communications Corporation

Netscape Communications Corporation

Genesis of the Enterprise

Early Growth

Preparations for a Secure Future

Principal Subsidiaries

Further Reading

Netscape Communications Corporation

Netscape Communications Corporation

In the Beginning

Netscape at a Glance

The Birth of Netscape

Timeline

The Inventor of the Internet

Navigator Takes to the Net

Cyber Millions

AOL Enters the Picture

A New Century

Netscape Communications Corporation

Netscape Communications Corporation

Contact Information:

OVERVIEW

COMPANY FINANCES

ANALYSTS' OPINIONS

HISTORY

STRATEGY

INFLUENCES

CURRENT TRENDS

PRODUCTS

FAST FACTS: About Netscape Comunications Corp.

CORPORATE CITIZENSHIP

GLOBAL PRESENCE

CHRONOLOGY: Key Dates for Netscape Communications Corp.

EMPLOYMENT

SOURCES OF INFORMATION

Bibliography

For additional industry research:

Netscape Communications Corporation

NETSCAPE COMMUNICATIONS CORPORATION

Topic overview

FURTHER READING

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