Netscape lost browser battle with Microsoft in the Web’s infancy

By Matthew Fordahl The Associated Press
Wednesday January 23, 2002

SAN JOSE — Back in the early days of the World Wide Web, Netscape Communications Corp. pioneered the commercial development of Internet browsers and even charged for the software. 

Then Microsoft Corp. began giving away Internet Explorer with its Windows operating systems, sparking the so-called browser wars and adding fuel to monopoly arguments against Microsoft. 

The rest is history. Today, Netscape, a subsidiary of AOL Time Warner, has only 8 percent of the total browser market compared to Internet Explorer’s 91 percent, according to research firm WebSideStory Inc. 

“Microsoft was extremely successful in bundling the Explorer browser with the operating system and that was the best distribution for it,” said Ken Allard, senior vice president of research at Jupiter Media Metrix. 

On Tuesday, Netscape’s parent company sued Microsoft, seeking damages for anticompetitive behavior. The federal government’s antitrust case against Microsoft had been largely hinged on the old browser battles. 

But analysts say Netscape suffered because some of its later efforts were inferior to Internet Explorer. And it lost momentum — and key talent — when it was taken over by America Online in November 1998. 

Mountain View, Calif.-based Netscape sprang to life in April 1994, founded by Silicon Graphics pioneer James Clark and software developer Marc Andreessen, who was instrumental in developing one of the first Web browsers — NCSA Mosaic — as a student at the University of Illinois. 

Sixteen months after its founding, Netscape held its initial public offering, which gave the start-up a $2 billion market value even though it had only $20 million in sales. 

That same month, Microsoft awoke to the promise of the Web and released Internet Explorer. At the time, most users laughed off Microsoft’s buggy attempt to compete. 

But over the ensuing months, each company released improved versions with more capabilities with some users awaiting the next version as eagerly as the next installment of Star Wars. 

Netscape’s share of the market began to decline. 

on Jan. 22, 1998 — four years to the day before Tuesday’s lawsuit — Netscape capitulated and began giving away its software for free. 

At the same time, Netscape was hemorrhaging money. In November, AOL announced plans to acquire the Internet pioneer. 

AOL was more interested in Netscape’s media property, the Netscape.com Web site that many users kept as their home pages. Other Netscape initiatives, such as browser development, enterprise software and services did not receive as much attention, Allard said. 

AOL also never integrated the Netscape browser into its proprietary online service, instead relying on a version of Internet Explorer. 

Netscape 6.0 was released in April 2000 and was uniformly criticized for being incomplete and buggy. 

Netscape fixed the problems with later versions, but “the damage was already done, said Geoff Johnston, a browser market analyst at WebSideStory. 


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