At the beginning of the Internet era, one company became synonymous with both great success and great failure. That company was Netscape.
In the middle of the 1990s, Netscape completely dominated the Web browser landscape and was used by nearly every human on the planet that wanted to explore the Internet. But by the end of the 1990’s, Netscape was a mere shadow of what it was a few years earlier.
The rise and fall of Netscape was one of the great technology stories that eWEEK followed closely in the 1990s. Netscape grew explosively because it provided an easy-to-use product at just the moment it was needed, when millions of people were getting online to create and visit the thousands of Websites that were springing up every day.
It’s a story about the early triumph of innovation and the rise of the Web itself, in an era when a desktop monopoly was still able to control the destiny of the technology marketplace. It’s also an object lesson about how quickly an enterprise can fail when it depends almost entirely on a single product for most of its revenue.
Though it’s hard for many people to imagine now, the early World Wide Web that Tim Berners-Lee created in 1991 by building the world’s first Website lacked the basic tools that people needed to discover and browse Websites. That changed in March 1993, when Marc Andreessen, who later went on to found Netscape and today is one of the IT industry’s most active venture investors, first publicly announced the NCSA Mosaic Web browser.
“NCSA Mosaic provides a consistent and easy-to-use hypermedia-based interface into a wide variety of information sources, including Gopher, WAIS, World Wide Web, NNTP/Usenet news, Techinfo, TeXinfo, FTP, local file systems, Archie, telnet, tn3270 and others,” Andreessen wrote in a now-famous usenet message that gave birth to the browser era.
That first public release of NCSA Mosaic opened the eyes of many to the profound possibilities of the Internet, including those outside of academia and scientific research. One of those people was James Clark, the founder of Silicon Graphics, who together with Andreessen decided to turn the browser into a business and formed Mosaic Communications in April 1994.
Mosaic Communications announced the Netscape Navigator browser on Oct.13, 1994, as a free tool for anyone to use.
“Making Netscape freely available to Internet users is Mosaic Communications’ way of contributing to the explosive growth of innovative information applications on global networks,” Andreessen, then-vice president of technology at Mosaic Communications, said in a press release on that date. “We expect Netscape’s ease of use to spark another major leap in Internet usage by making the net a powerful tool for a broader base of users.”
Andreessen also prophetically stated that, “by incorporating security and advanced functionality, Netscape now lays the foundation for commerce on the net.” The security component that Netscape first invented—Secure Sockets Layer (SSL)—has been the backbone of all Internet commerce ever since.
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The “major leap in Internet usage” that Andreessen foretold was the beginning of the glory days of the dot-com era.
The success of the Netscape browser in 1994, as well as some legal issues surrounding the use of the name Mosaic, led Mosaic Communications to rename itself Netscape Communications on Nov. 14, 1994.
That year, Netscape was the unchallenged leader of the browser world and it undoubtedly was the catalyst that enabled the early growth of the Web in that era. Beyond just providing a view of the World Wide Web, Netscape engineers developed enhancements to the HTML specification that enabled new page layout formats. The Netscape 1.1 release of April 1995 introduced the world to the HTML concept of Tables, which served as the defining element of all Web page layouts for the following decade.
The summer of 1995 marked both the high point for Netscape’s market success as well as the beginning of the end. In one of the most active initial public offerings of all time, Netscape went public Aug. 9, 1995. Netscape shares hit $75 on the first day, up from the initial offering price of $28 a share, making Andreessen into an instant multi-millionaire and kicking off the dot-com boom era.
The summer of 1995 also marked the debut of Microsoft’s belated response to Netscape’s astounding success with its innovative Web browser with the release of Windows 95. Microsoft’s Internet Explorer (IE) browser was part of an additional package for Window 95, known as Plus.
This marked the start of the browser wars that would ultimately bring down Netscape and would provide one of the fundamental issues that would embroil Microsoft in years of antitrust litigation. The war began with Netscape and Microsoft jostling for attention with each new release of their respective browsers.
While HTML standards ostensibly were already in place, the truth was that each browser vendor was advancing its own version of standards. As a result, developers often had to build different versions of their site to suit the different browser or simply just had to conform to the practice of using the lowest common denominator for common features and HTML usage across both the browsers.
This was a costly and time-consuming process that sometimes delayed the release of Web applications and often forced developers and users to choose sides in the war.
In June 1997, Netscape rolled out the Netscape Communicator 4.0 suite, which included email and calendar applications alongside the Navigator browser. Microsoft responded with Windows 98, which for the first time fully integrated the IE browser into the operating system. For many users of that era, seeing the “big blue E” on their Windows desktop was the Internet, and it was the factor that ended Netscape’s reign as the dominant Web browser and eventually as an independent company.
Netscape’s fall from prominence didn’t happen in isolation; it was an act that came about through a deliberate series of Microsoft market actions. In May 1998, the U.S. Justice Department filed an antitrust complaint against Microsoft which charged among many other things that Microsoft acted illegally to end Netscape’s dominance as the most widely used Web browser and to prevent other browsers from gaining significant market share.
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While the legal motions were getting started, Netscape itself was going through a very different transition. In February 1998, Netscape created the Mozilla Project as the open-source home for its browser efforts. Time has proven that this act has preserved the initial technology promise of Netscape, to make the Web a better place for users and commerce alike.
In November 1998, AOL announced its intention to acquire Netscape for $4.2 billion, ending Netscape’s existence as an independent company. It wasn’t actually until January 2002, that Netscape itself would directly sue Microsoft, based on the same claims of anti-competitive behavior that were the basis of the U.S. government’s antitrust case.
The acquisition of Netscape by AOL wasn’t seen as being particularly positive by those within Mozilla at the time. An essay written by Mozilla staffer Jamie Zawinski summed up the feelings of the day. Its title was “Fear and Loathing on the Merger Trail.”
“Some people have the impression that the Mozilla agenda is set by Netscape, and to some extent, that is true because Netscape is paying more than a hundred people’s full-time salaries to work on the Mozilla code base—and to give their code away,” Zawinski wrote.
Zawinski added that it would be hard to imagine that AOL would have “the intention of turning Netscape into something that it is not; it’s hard to imagine that they would spend $4 billion on Netscape just to throw away the client.”
Yet, with history as our guide, that is precisely what happened. Over time, AOL’s interest in Netscape diminished, while Mozilla’s own star began to rise. In 2003, Mozilla got its own foundation, entirely independent of AOL and helped to begin yet another era of browser innovation that continues to this day with the Firefox Web browser. Not coincidentally, 2003 is also the year that AOL settled with Microsoft for $750 million.
The advent of Firefox set off yet another round of the browser wars that continued until rulings in the antitrust litigation ensured that Windows users could more easily define a browser that opened by default whenever they clicked on a Web link. Those rulings and the evolution of cloud computing reduced Internet Explorer’s dominance and gave competing browsers—including Firefox, Google Chrome, Safari, Opera and others—a chance to win adherents.
The fact remains that AOL didn’t officially “throw away” the Netscape Navigator Web browser until years later when in 2007 they finally admitted the obvious and declared the Netscape browser dead.
But Netscape’s epitaph was written long before that date. In 1999, eWEEK ran an article quoting Oracle CEO Larry Ellison that sums up the fall of Netscape.
“Bill Gates said he was going to put Netscape out of business, and he did,” Ellison said.
Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.