from the popularity of the first browser in the 1990s to its rapid decline

In 1994, Netscape released the first truly popular Internet browser. Its popularity was short-lived, but in the 1990s the browser accounted for more than 90% of the market. Netscape made the Internet more accessible to everyday users, while simultaneously demonstrating to companies the ability to monetize Internet developments. Kommersant decided to remind readers about Netscape on the days when it could celebrate its 30th anniversary.

Browser in six months

Netscape was founded by engineers and developers Jim Clark and Marc Andreessen. They created Mosaic Communications Corporation, soon renamed Netscape Communications, on April 4, 1994. The company’s goal was to create a web browser.

In order to understand the revolutionary nature of this task, one should remember what the Internet itself was like at that time.

In the mid-1990s, less than 1% of the world’s population had access to the Internet. The World Wide Web itself was not such a worldwide and such a web. It only went beyond individual government, military or scientific networks, remaining mainly a set of individual text sites that were difficult for the average user to find.

It’s almost impossible to believe now, but at that time, regularly reprinted paper directories on Internet sites were very popular, both in size and content reminiscent of Yellow Pages-style telephone directories. It was these that the new instrument was supposed to replace. “The original idea was how to make all this information easily accessible to everyone,” Eric Bina, who helped create one of the first NCSA Mosaic browsers, later said.

Like many Internet tools of the time, this browser was a university development – worked on by students and graduates of the University of Illinois. Among them was recent graduate Marc Andreessen, who would soon co-found Netscape.

NCSA Mosaic appeared in 1993. A year later, Andreessen would join Jim Clark in creating Netscape. They wanted to make the browser a true consumer product that could be brought to market quickly. The company’s founders said that they created their own browser from scratch, without using the developments of NCSA Mosaic. However, the University of Illinois still sued them, after which they changed the name of the company and browser from Mosaic to Netscape.

One of the main creators of the new browser was recent University of Kansas student Lou Montulli. As for Clark, he was older than the other founders of the company (he was 40 years old). He already had experience creating the technology company Silicon Graphics and teaching computer science and computer graphics at Stanford University.

Just six months after its creation – on October 13 – the company released its first product, a beta version of the Mosaic Netscape 0.9 browser. By December of the same year, when the non-test version was released, the browser was renamed Netscape Navigator.

Less than a year after its release, it accounted for up to 90% of the market. And this despite the fact that Netscape Navigator was a paid product for several years.

When assessing this market, one should also take into account the low level of Internet penetration into everyday life. So Netscape Navigator had a huge share of a very niche, albeit extremely promising market. At the same time, it was the emergence of web browsers that was one of the factors that helped overcome this niche and make the Internet more understandable and accessible to ordinary users. Fortune magazine called the advent of browsers “the beginning of the Internet era”—in general, quite rightly.

A template for the dot-com boom

A year after its creation, Netscape was already one of the most fashionable companies. In August 1995, it held an IPO. Before Netscape’s IPO, the stock market and the booming Internet were quite separate. The huge technology IPOs that would become the norm in the late 1990s were still to come.

The start of trading had to be postponed by two hours due to very high demand for Netscape shares, which at that time had not been there for even a year and a half. The shares were initially valued at $14 per share, but immediately before the placement the price was increased to $28. On the first day of trading, the shares rose to $75, and by the close of trading they were still worth almost double the original price – $58. This put Netscape’s total value at $2.8 billion.

The New York Times then called the IPO “one of the most stunning initial public offerings in Wall Street history.” As observers noted, Netscape demonstrated for the first time how a company from the virtual world could earn billions in the real world.

According to many experts, it was Netscape’s initial offering that gave impetus to the surge in popularity of IPOs of Internet companies (the so-called dot-coms) and the sharp rise in their shares. True, this first wave of popularity ended very quickly. In 2000, the dot-com bubble burst. But by this time Netscape itself had ceased to exist as an independent company.

The first browser war

A very simple entry into a new market predetermined the rapid fall of Netscape. Less than a year after the launch of its browser, in August 1995, Microsoft, which was already a heavyweight in the software market, released its own browser, Internet Explorer. Its huge competitive advantage was that it was included in the office software package with Windows 95.

The entry of Internet Explorer into the market marked the beginning of the so-called first browser war – its main participants were, in fact, Netscape and Microsoft.

They say that at some point a representative of Microsoft came to the founders of the new company, convincing them to divide the browser market between them, but they refused – however, there is no hard evidence of this story.

At first, Netscape seemed to be winning the competition. Netscape Navigator 2, released in 1995, was faster, simpler, and better in every way than the first version. And, as analysts noted, the first versions of Internet Explorer were inferior to Netscape Navigator – after all, Microsoft’s browser was rushed out to take share of a developing market.

The outcome of the browser war was in some way predetermined by the disparate financial power of the participants – a small company created a couple of years ago with one product and a recognized IT giant of its time. For comparison, in August 1995, when Netscape was valued at just under $3 billion in its IPO, Microsoft’s capitalization reached $38 billion.

And Internet Explorer itself, by the fourth version, released in 1997, was already, according to analysts, at the level of its competitor. At the same time, the Netscape browser was increasingly criticized for the fact that its creators were more interested in adding new “chips” to the tool, rather than stable work in the existing format.

To compete more successfully, in 1996 the company introduced its own software package, Netscape Communicator, which in addition to the browser included a text editor, email service and other tools. However, this package was not widely used.

Fast sunset

In 1998, Netscape employees created the Mozilla community, which promoted open source software. Subsequently, the Mozilla Firefox browser itself gained great popularity, successfully competing with Internet Explorer. So many experts note: Netscape also contributed to the development of the open source software movement. However, at that time, the publication of code for Netscape products rather only gave additional advantages to Microsoft, slowing down Netscape’s own developments.

Also in 1998, Netscape’s short history as an independent company ended – it was bought by the American Internet conglomerate AOL for $4.2 billion. By the time the deal closed in March 1999, Netscape’s market capitalization was estimated at $10 billion.

1998 was a significant year for this story for another reason – it was then that Internet Explorer for the first time overtook Netscape Navigator in market share. And by 2000, Internet Explorer accounted for 99% of the browser market, leaving Netscape Navigator with a measly 1%.

Subsequently, Internet Explorer itself will lose the “second browser war” to Chrome, but this will happen only in the early 2010s.

New versions of Netscape Navigator continued to be released into the 2000s, but now it was already a niche product for connoisseurs. The latest version, Netscape Navigator 9, was released in 2007, and the following year AOL stopped technical support for the browser.

In addition to the browser itself, Netscape developed many other things that are now used in a wide variety of Internet systems. For example, the SSL cryptographic protocol, which provides a high level of communication security. One of the company’s employees created the popular JavaScript programming language, which was first used in Netscape. Lou Montulli, while working for the company, was the first to come up with the idea of ​​collecting and using cookies.

As CNN later noted, Netscape “more than any other company set the technological, social and financial tone of the Internet age.” Many people talk about Netscape as one of the first companies that managed to monetize Internet developments. Moreover, few people remember about the company itself, which laid many of the foundations of the modern Internet.

Yana Rozhdestvenskaya