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What was the history of the Netscape browser? What lead to its downfall? Where is Netscape now?
In Ben Horowitz’s book The Hard Thing About Hard Things, he talks about the rise and fall of the Netscape browser. What started as a promising venture fell apart when Microsoft entered their playing field.
Keep reading to learn about the history of the Netscape browser.
The Invention of Netscape
In 1994, while working at Lotus, Ben Horowitz learned about Mosaic, one of the first graphical web browsers. Before that point, the Internet was an esoteric technology used by academics and required abstruse commands to operate. In contrast, Mosaic was a graphical web browser that made the Internet accessible to everyday people. It gave Horowitz a glimpse of the future, and he was converted—he was wasting time working on anything else.
A few months later, Jim Clark (co-founder of Silicon Graphics) and the 22-year-old wunderkind Marc Andreessen (leader of the team that developed Mosaic) founded Netscape to capitalize on the innovation. Horowitz seized the chance to interview for a job at the new company.
A Brief Internet History
A brief history lesson: While today, we know the Internet to be the global innovation it is, in 1994 it was still in its infancy, nowhere near mainstream. Instead, software giants like Oracle and Microsoft were racing to build their own proprietary technologies to become the Information Superhighway of choice. The Internet was just one competitor in this battle.
The vision of Netscape was to make the web browser safer, easier to use, and more functional. In doing so, they would popularize the open Internet, freeing it from the shackles of a closed, proprietary corporate future.
Ben Horwitz and the Netscape Browser
Ben went through the interview process, and his final interview was with Marc Andreessen. The discussion was an intense exploration of Ben’s views on software and the future of the Internet. In turn, Andreessen revealed his impressively deep knowledge of computing history and his inspiring insights into technology. Horowitz thought Andreessen lived up to his wunderkind reputation and was convinced Netscape would shape the future.
Ben got the job to lead the Enterprise Web Server product line. The division sold two products: a web server selling for $1,200 and a secure web server (featuring Netscape’s new technology SSL) selling for $5,000. This was still a small part of the business—at the time, Netscape made most of its money by selling its browser to commercial users.
In August 1995, just 16 months since their founding, Netscape went public in their IPO. They priced their stock at $28 per share; at the close of their first trading day, the stock shot up to $58, giving Netscape a value of $3 billion. (While Netscape was unprofitable at the time—then a rarity in IPOs—investors were enthusiastic about how its revenues had doubled every quarter that year.) The IPO was a shock to the business world—the Internet was now a verifiable industry worth taking seriously.
Netscape Competes with Microsoft
The good feelings didn’t last. The software behemoth Microsoft announced that it had developed its own browser, Internet Explorer, and that it’d be bundling it with Windows 95. Since Microsoft had a near-monopoly on operating systems, this meant the world’s computer users would by default use the free Internet Explorer. And since Netscape made most of its money selling its browsers, they were in deep trouble.
Knowing selling browsers was no longer tenable, they decided to focus on selling web server software instead. This was Ben Horowitz’s business line. Microsoft was selling a high-powered, expensive server suite called BackOffice. If Microsoft was going to undercut them with Internet Explorer, Netscape could undercut them too. In response, Netscape decided to launch a low-cost, open alternative called SuiteSpot, which cost just a fraction of the price.
In one of the book’s most memorable anecdotes, Ben describes how they planned to unveil the new product as a surprise in March 1996, until Marc revealed the strategy to a trade publication. Dismayed, Ben sent an email to Marc:
> I guess we’re not going to wait until the 5th to launch the strategy.
Marc sent a reply within minutes, CC’ing Netscape’s CEO and chairman:
> Apparently you do not understand how serious the situation is. We are getting killed killed killed out there. Our current product is radically worse than the competition. We’ve had nothing to say for months. As a result, we’ve lost over $3B in market capitalization. We are now in danger of losing the entire company and it’s all server product management’s fault.
> Next time do the f***ing interview yourself.
> F*** you,
Ben thought he was going to be fired. But he wasn’t, and SuiteSpot became a $400 million revenue business. As for Marc, they’re still partners today at their venture capital firm. Ben notes warmly about how valuable it is to have partners who can freely point out errors in each other’s thinking.
The End of Netscape
Despite their efforts, Netscape couldn’t compete against Microsoft, which used its vast resources to build free products and undercut Netscape’s revenue sources. (Microsoft would later face antitrust issues for these practices.)
In the end, Netscape was acquired by America Online in 1999 in a stock-swap transaction. Netscape was valued at $10 billion at the time.
As the team migrated to AOL, they became disillusioned with the merger. AOL was a media company, not a technology company, and their cultures and interests clashed. Ben, Marc, and a few other co-conspirators thought about what to do next.
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- What it was like to head a company through the dotcom bubble and subsequent burst
- Why failing is normal
- How to build a good place to work