What happened to Netscape?

Netscape – or Netscape Communications Corporation – was a computer services company best known for its web browser. The company was founded in 1994 by Marc Andreessen and James H. Clark as one of the first and most important start-ups on the internet. The Netscape Navigator web browser was released in 1995 and it became the browser of choice for the users of the time. By November 1998, it had been acquired by AOL which tried unsuccessfully to revive the popularity of the web browser. Ten years later, Netscape was shut down entirely.

Background

Netscape – or Netscape Communications Corporation – was a computer services company best known for its web browser.

The company was founded in 1994 by Marc Andreessen and James H. Clark as one of the first and most important start-ups on the internet. The Netscape Navigator web browser was released in 1995 and with virtually zero competition, became the browser of choice for the users of the time.

Andreesen and Clark were true visionaries of their time, understanding the significant role web browsers would play in a free and accessible internet. A Netscape IPO followed in August 1995, enabling the company to reach a market cap of $2.9 billion on its first day of trading.

Despite a promising start, Netscape would quickly fade into obscurity. By November 1998, it had been acquired by AOL which tried unsuccessfully to revive the popularity of the web browser. Ten years later, Netscape was shut down entirely.

So what happened to Netscape? Keep reading to find out!

Browser wars

While Netscape enjoyed first-mover advantage for a short while, Microsoft was working in the background to develop a browser of its own.

Around the time of the Netscape IPO, Microsoft released Windows 95 with an optional feature called Internet Explorer 1.0. The two companies would engage in the so-called “browser wars” during 1995 and 1996 – but Microsoft eventually closed the gap with their release of Internet Explorer 3.0.

To differentiate itself, Netscape released the Communicator 4.0 bundle in late 1996. This bundle was an early form of sales and management-driven bloatware featuring a Usenet client, web editor, email app, and address book. 

Unfortunately, Communicator 4.0 uptake was low.

Bundling, bugs, and product creep

Internet Explorer 4.0 was released in 1997. Microsoft began to assert its dominance at this point because its browser was bundled with every copy of Windows – itself bundled with the purchase of most personal computers.

Given the boom in sales of PCs in the late 90s, Internet Explorer became the most popular browser by default. 

Around the same time, Netscape was increasingly plagued with bugs caused by an outdated browser core and was also criticized for feature creep.

Netscape Communicator 5.0 was then promised in January 1998. But after a delay of more than three years, consumer trust in the company was almost non-existent.

What else caused the downfall of Netscape?

Microsoft ultimately gained the upper hand through distribution and bundling, but this was not the only contributing factor to the demise of Netscape.

Here are a few more reasons:

  1. Poor product strategy – after Netscape 4.0, developers decided to rewrite the code from scratch causing them to miss the release date for Netscape 5.0. Netscape 6.0 was eventually launched in November 2000 but was plagued with problems after owner AOL forced a release before it was ready. By that stage, Netscape had become irrelevant in the industry.
  2. Poor product planning – Netscape developers continually added new features to Navigator in the web browser arms race. The codebase then became difficult to manage, leading to quality control problems and buggy experiences for consumers.
  3. Feature bloat – the obsession with adding new features also resulted in the company losing its focus and direction. Instead of doubling down on its highly successful web browser, Netscape essentially became an enterprise and server software company with eCommerce applications.

Key takeaways:

  • Netscape was a computer services company founded by Marc Andreessen and James H. Clark. It was the first company to introduce a free and accessible web browser for general internet use.
  • Netscape enjoyed first-mover advantage for a time, but became engaged in a war with Microsoft who was quietly developing its own browser in the background. Microsoft ultimately won because Internet Explorer was bundled with sales of Windows and home computers.
  • Netscape also contributed to its downfall with poor product strategy and planning. An obsession with adding new features caused the company to deviate from its core offering and suffer from extensive development-related delays.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"