The Last Page

The Frantic Reign of Netscape

By Dale Dougherty
Web Techniques Magazine
February 1999
Volume 4, Issue 2

In the <blink> of an eye, Netscape has come and gone. Four years after the first beta release of its browser, Netscape ends its reign as the supreme ruler of the Internet empire. A courtroom fight with Microsoft and a $4.2 billion merger with America Online signal a stunning end to the Browser Wars. While Microsoft may be declared the victor, the price of victory is certainly steep if it causes the government to decide that Microsoft is out of control. That decision will no doubt end the History of the Internet, Part I.

Just as histories are written by the victors, business books are stories told by and about those who succeed. Look at these recent titles: Barbarians Led by Bill Gates: Microsoft from the Inside; aol.com: How Steve Case Beat Bill Gates, Nailed the Netheads, and Made Millions in the War for the Web; Speeding the Net: The Inside Story of Netscape and How It Challenged Microsoft. CEOs are the modern-day conquerors who amass power and prestige in the marketplace.

In any period of history, we can find similar stories of people who rise to power. Usually these power struggles are accompanied by bloodshed. I happen to be reading about Byzantium in a book of that title by John Julius Norwich. In the fourth century, Emperor Constantine founded this new center of the Roman Empire. The rise of Byzantium in the East comes about as Rome falls in the West. St. Jerome writes after the sack of Rome: "The city that has conquered the universe is now herself conquered."

In this period, the Roman Empire goes through emperors the way our industry goes through startups. Rulers fight each other for power while warring with barbarian invaders and struggling to maintain the support of their own armies. Many emperors rule only a few years. Some are teenagers when they begin their reign. Seldom do they live long enough to die of natural causes.

For example, the Emperor Constans is 15 when he takes control of North Africa and Italy. He aggravates his older brother, Constantine II, who challenges him to battle. Surprisingly, the more powerful Constantine dies in the fight. However, the victor's army soon revolts and names its own emperor, Magnentius. This army pursues its former leader and the reign of Constans ends in a violent death.

It's no wonder that the word byzantine has entered our language meaning "highly involved and intricate" or "characterized by elaborate scheming and intrigue." Make what you will of it, but certainly the history of the Internet, if not the entire computer world, can be considered byzantine.

For a while, Netscape was the undisputed leader of the Internet. Following the strategy "he who innovates rules," Netscape and its browser were a significant threat to both Microsoft and AOL. Both tried early on to buy a stake in Netscape but were unsuccessful.

Netscape threatened Microsoft's desktop empire by diminishing the importance of operating systems and applications. Since the Netscape browser ran on any platform, it didn't matter which operating system you used–the browser worked just the same. Additionally, the Netscape browser could be positioned as the last application you'd ever need. With a browser, you could do anything. With the Netscape browser at your fingertips, you had access to every computer in the world.

Netscape also threatened the dominion of AOL, a closed online service. The Netscape browser brought down the walls of all online services, and allowed direct access over the Internet to the rich, varied information resources on the Web.

We all know what happened. Microsoft responded by refocusing on the Internet. Its ability to give away Internet Explorer and make money in other ways made Netscape back away from the browser wars. Netscape decided it couldn't out-innovate Microsoft. AOL seemed to bide its time, remaining neutral, seeking only to make the best deal it could with either company.

Netscape began to go after customers in the enterprise. They tried to define some subset of the Internet that it could capture and hold against Microsoft–the intranet, the extranet, the Net economy, whatever. Unlike the early adopters who used the browser, these business customers were slow to accept change–and new vendors. That IBM should do so well serving business on the Internet is not surprising. IBM had long-term relationships with its business customers to begin with. Netscape did not.

The browser, not the back end, was the key to the Netscape kingdom. Netscape's inability to convert the sizable number of browser users into customers is the real story behind its decline and fall. During the same period, Microsoft and AOL built large customer bases on the Net–not just users, but paying customers.

Netscape realized too late that it had let companies like Yahoo benefit enormously from constant exposure to its users and go public as hugely successful media enterprises. It responded too late, and somewhat halfheartedly, with its launch of Netcenter. Netscape was not 100-percent comfortable in its role as a new media company. That put AOL in a better position to capitalize on the kind of company Netscape had become. The merger puts AOL in a better position to challenge Microsoft, especially as the battle shifts from building browsers to building services.


Dale is the editor and publisher of Web Review and editorial director of Web Techniques. You can reach him at dale@webreview.com


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