When the Web was new: Remembering Netscape, its contributions, its fall

In late November 20 years ago, the end was at hand for the early Web’s most intriguing, flamboyant, and influential startup company — the one with the name that was pitch-perfect for the emerging digital landscape: Netscape.

The name offered a hints of the dreamy and the exotic, suggesting as it did that the World Wide Web was open for exploration in a benign and welcoming way. The opportunities online seemed limitless then, and Netscape and its graphical Web browser Navigator were showing the way.

Such sentiments seem distant now, as does the memory of Netscape. Its acquisition by AOL.com was announced November 24, 1998, in an all-stock deal completed in 1999. The 20th anniversary of word of AOL’s takeover has been little remembered, and sadly so given Netscape’s lasting contributions and influences.

The tech graveyard is filled with 1990s startups and their dashed ambitions. Think of AltaVista, which offered the promise of high-speed search for the early Web. Or GeoCities, the Web-design company founded in 1994 and acquired by Yahoo in 1999. Or Napster, which began in 1999 sharing digital music files online; its heyday lasted but a couple of years.

None of those failed companies was nearly as significant as Netscape, which in the mid-1990s introduced millions of people to the World Wide Web.

Netscape was launched in 1994 as Mosaic Communications and changed its name before the year was out. Sixteen months after its obscure beginnings, Netscape went public in a sensational IPO (initial public offering of shares) that came to be known as the Internet’s “big bang” moment.

Like no other occasion of the early digital age, Netscape’s IPO in August 1995 thrust the Web squarely into popular consciousness. As I wrote in my book, 1995: The Year the Future Began, the IPO “demonstrated that the Web could be a place to make fortunes fast. … The Wall Street Journal observed that it had taken General Dynamics forty-three years to become a corporation worth $2.7 billion in the stock market. It had taken Netscape ‘about a minute.'”

Five million Netscape shares were offered for sale August 9, 1995, pegged at $28. Trading of Netscape’s stock on the NASDAQ exchange was delayed nearly two hours that morning because of a massive order imbalance. When Netscape did open, it was selling at $71 a share.

By day’s end, the share price had eased to $58.25, which it meant a market capitalization of more than $2 billion for a company that had yet to turn a profit.

“These days,” as Brian McCullough noted in his well-received new book, How the Internet Happened, “we’re used to embryonic technology companies debuting on the stock market to soaring valuations, but in August of 1995, such an event was almost unheard of.”

„Netscape deserves to be remembered for more than its watershed IPO. Although its lifespan as an independent company was short, Netscape’s contributions were notable and enduring.

They included popularizing the narrative of the “heroic geek,” the wunderkind who emerges from nowhere to shake up the tech world.

Andreessen, Netscape co-founder

Netscape’s heroic geek was Marc Andreessen, who co-founded the company when he was 22 years old. By the time he was 24, after the IPO, he was a multimillionaire.

Andreessen was Netscape’s defining and most colorful figure, a technologist with an agile mind who spoke fast and relished poking fun at  Microsoft, the tech giant that only belatedly recognized the potential of the Web.

When it did, Microsoft was alarmed to find that the features and potential of Netscape’s browser threatened its dominance. Not long after Netscape’s IPO, Microsoft launched its own browser, Internet Explorer, and bundled it with its Windows operating system. From 1995 to 1998, Microsoft engaged Netscape in a lopsided “browser war” that ended with Netscape’s demise.

While Netscape’s fall was not due exclusively to the “browser war,” its meteoric rise and collapse became a parable for ruthlessness of the digital world, for the hazards of clashing with powerful, unforgiving, and very rich entities like Microsoft.

Its tactics brought Microsoft severe legal trouble: In May 1998, the U.S. Justice Department filed an antitrust lawsuit against the software giant, arguing that Microsoft had “used its monopoly power to develop a choke hold on the browser software needed to access the Internet.”

The federal lawsuit came much too late to save Netscape, however. And Microsoft survived, barely, dodging an initial proposed penalty that anticipated splitting the company in two. Microsoft afterward was perhaps chastened, but it remained intact. And just today, it reclaimed the distinction of being the most valuable U.S. company, with a market capitalization that has reached $851 billion.

In its short and flamboyant run, Netscape proved to be nothing if not innovative. It developed the Secure Sockets Layer encryption tool which helped protect online transactions and make them reliable. It developed JavaScript, a programming language that helped animate the Web. It introduced the small packets of digital information known as cookies, which are stored on a user’s computer. Netscape was first to offer bug bounties for identifying flaws in its browser software. Bug bounties have since become commonplace.

What’s more, Netscape helped define “Internet time,” an idiom of the late 1990s that meant everything moved more rapidly online.

“The compressed arc of Netscape’s meteoric” lifespan, I wrote in 1995, “was itself emblematic of Internet time.”

WJC