En la última clase, y dentro del marco de la bolilla VI sobre Decisiones de Financiamiento, hablamos sobre el concepto de underpricing y vimos el ejemplo que figura en el libro de Damodaran sobre Netscape.
Después de la clase me metí a buscar en Internet algo de data sobre como evolucionó la compañía después de su IPO y encontré en Wikipedia una breve reseña que comparto con ustedes.
The company was founded as Mosaic Communications Corporation on April 4, 1994 by Marc Andreessen and Jim Clark, and was the first company to attempt to capitalize on the nascent World Wide Web. It released a web browser called Mosaic Netscape 0.9 on October 13, 1994. This browser was subsequently renamed Netscape Navigator, and the company took on the ‘Netscape’ name on November 14, 1994 to avoid trademark ownership problems with NCSA, where the initial Netscape employees had previously created the NCSA Mosaic web browser. (The Mosaic Netscape web browser shared no code with NCSA Mosaic.)
Netscape had a successful IPO on August 9, 1995. The stock’s value reached $75 on the first day of trading, which was nearly a record for a stock’s first-day gain. The company’s revenues doubled every quarter in 1995.
One of Netscape’s stated goals was to “level the playing field” among operating systems by providing a consistent web browsing experience across them. The Netscape web browser interface was identical on any computer. Netscape later experimented with prototypes of a web-based system which would allow a user to access and edit their files anywhere across a network, no matter what computer or operating system he happened to be using.
This did not escape the attention of Microsoft, which viewed the commoditization of operating systems as a direct threat to its bottom line. It is alleged that several Microsoft executives visited the Netscape campus in June 1995 to propose dividing the market (although Microsoft denies this as it would have breached anti-trust laws), which would have allowed Microsoft to produce web browser software on Windows while leaving other operating systems to Netscape. Netscape refused.
Microsoft released version 1.0 of Internet Explorer as a part of the Windows 95 Plus Pack add-on. According to former Spyglass developer Eric Sink, Internet Explorer was based not on NCSA Mosaic as commonly believed, but on a version of Mosaic developed at Spyglass. Microsoft quickly released several successive versions of Internet Explorer, bundling them with Windows, never charging for them, financing their development and marketing with revenues from other areas of the company. This period of time became known as the browser wars, in which Netscape Communicator and Internet Explorer added many new features (not always working correctly) and went through many version numbers (not always in a logical fashion) in attempts to outdo each other. But Internet Explorer had the upper hand, as the amount of manpower and capital dedicated to it eventually surpassed the resources available in Netscape’s entire business. By version 3.0, IE was roughly a feature-for-feature equivalent of Netscape Communicator, and by version 4.0, it was generally considered to be more stable. Microsoft also targeted other Netscape products with free workalikes, such as the Internet Information Server (IIS), a web server which was bundled with Windows NT.
Netscape could not compete with this strategy. Meanwhile, it faced increasing criticism for the bugs in its products; critics claimed that the company suffered from ‘featuritis’ – putting a higher priority on adding new features than on making them work properly. The tide of public opinion, having once lauded Netscape as the David to Microsoft’s Goliath, steadily turned negative, especially when Netscape experienced its first bad quarter at the end of 1997 and underwent a large round of layoffs in January 1998.
January 1998 was also the month that Netscape started the open source Mozilla project. Knowing that Internet Explorer had become by far the dominant web browser in the marketplace, Netscape publicly released the source code of Netscape Communicator 4.0 in the hopes that it would become a popular open source project. It placed this code under the Netscape Public License, which was similar to the GNU General Public License but allowed Netscape to continue to publish proprietary work containing the publicly-released code. However, after having released the Communicator 4.0 code this way, Netscape proceeded to work on Communicator 4.5 which was focused on improving email and enterprise functionality.
It eventually became clear that the Communicator 4.0 browser was too difficult to develop, and open source development was halted on this codebase. Instead, the open source development shifted to a next generation browser built from scratch. Utilising the newly-built Gecko layout engine, this browser had a much more modular architecture than Communicator 4.0 and was therefore easier to develop with a large number of programmers. It also included an XML user interface language named XUL that allowed single development of a user interface that ran on Windows, Macintosh, and Linux.
The United States Department of Justice filed an antitrust case against Microsoft in May 1998. Netscape was not a plaintiff in the case, though its executives were subpoenaed and it contributed much material to the case, including the entire contents of the ‘Bad Attitude’ internal discussion forum.
In October 1998, Netscape acquired web directory site NewHoo for the sum of $1 million, renamed it the Open Directory Project, and released its database under an open content license.
Acquisition by America Online
America Online (AOL) on November 24, 1998 announced it would acquire Netscape Communications in a tax-free stock-swap valued at US$4.2 billion at the time of the announcement. This merger was ridiculed by many who believed that the two corporate cultures could not possibly mesh; one of its most prominent critics was longtime Netscape developer Jamie Zawinski. The acquisition was seen as a way for AOL to gain a bargaining chip against Microsoft, to let it become less dependent on the Internet Explorer web browser. Others believed that AOL was interested in Netcenter, or Netscape’s web properties, which drew some of the highest traffic worldwide. Eventually, Netscape’s server products and its Professional Services group became part of iPlanet, a joint marketing and development alliance between AOL and Sun Microsystems.
On November 14, 2000, AOL released Netscape 6, based on the Mozilla 0.6 source code. (version 5 was skipped.) Unfortunately, Mozilla 0.6 was far from being stable yet, and so the effect of Netscape 6 was to further drive people away from the Netscape brand. It was not until August 2001 that Netscape 6.1 appeared, based on Mozilla 0.9.2 which was significantly more robust. A year later came Netscape 7.0, based on the Mozilla 1.0 core.
Disbanding of Netscape
After the Microsoft antitrust case found that Microsoft held and had abused monopoly power, AOL filed suit against it for damages. This suit was settled in May 2003 when Microsoft paid US $750 million to AOL and agreed to share some technologies, including granting AOL a license to use and distribute Internet Explorer royalty-free for seven years. This was considered to be the “death knell for Netscape.”
On July 15, 2003, Time Warner (formerly AOL Time Warner) disbanded Netscape. Most of the programmers were laid-off, and the Netscape logo was removed from the building. However, the Netscape 7.2 web browser (developed in-house rather than with Netscape staff) was released by AOL on August 18, 2004.
Red Hat announced on September 30, 2004 that it had acquired large portions of the Netscape Enterprise Suite and is planning to convert them into an open source product to be bundled with Red Hat Enterprise Linux. . On June 1, 2005, Red Hat released Fedora Directory Server.
Today, the Netscape brand name continues to be used extensively. The company once again has its own programming staff devoted to the development and support for the series of web browsers. Additionally, Netscape also maintains the Netscape.com portal, which is a popular social-news site, similar to Digg, which was given a new look in June 2006. Most notably however, AOL now markets a discount ISP service under the Netscape brand name.
Alejandro Salevsky Ezequiel Calviño Multitag 2.0 UnderPricing Netscape