How Netscape lives on: 30 years of shaping the web, open source, and business

When I started using the internet, there was no web. Only computer scientists and geeks were using the internet. Then, along came the web, and everyone could use it. Well, everyone who could master Trumpet Winsock and Mosaic anyway. What really opened the door to the web to most people was Netscape Navigator, the first popular, easy-to-use web browser, which appeared 30 years ago.   

In 1994, Marc Andreessen and Jim Clark founded Mosaic Communications Corporation, which was soon renamed Netscape Communications. Their flagship product, Netscape Navigator, was released in December of that year and quickly became the dominant web browser of the mid-1990s.

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Netscape wasn’t just a technological marvel; it was a cultural phenomenon. Its user-friendly interface and innovative features introduced tens of millions of people to the web. Netscape transformed the internet from a techie’s favorite toy into a mainstream medium. Even if you grew up before the internet, it’s hard to imagine a world without it, as I recently discovered when Hurricane Helene kicked me back into the 1960s.

So, why haven’t many of you heard of Netscape? Blame Microsoft. 

Microsoft hadn’t seen the internet’s popularity coming, so it played catch-up. The company wasn’t competitive with its first web browser, Internet Explorer (IE) 1.0. In the mid-90s, Netscape owned 80% of the web browser market. 

Next, Microsoft made IE free in a Windows 95 add-on program called Microsoft Plus! for Windows 95. Then, the company packaged IE into its new operating system, Windows 95. Microsoft strong-armed PC vendors to put its new operating system and, by default, its browser on all its PCs. 

The goal was not so much to kill off other PC operating system vendors. OS/2 was sputtering out, and only a handful of people used the brand-new Linux. Windows 95’s top mission was to wrest internet control from Netscape.  

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Netscape sued Microsoft for running an illegal monopoly and won. That victory, however, did not matter. By the time the appeals had run their course, Netscape was a dying company. It finally expired on March 1, 2008. But that wasn’t the end of the Netscape story.

Netscape and technology

Netscape’s influence lives on. First, its contributions to web technology were numerous and far-reaching. For example, love it or hate it, Netscape was the birthplace of the JavaScript programming language, and it remains fundamental to web development today.

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Netscape also pioneered the Secure Sockets Layer (SSL) encryption protocol. The technology’s descendants are the foundation for all web security and online transactions. Without SSL, there would be no Amazon, eBay, or PayPal. 

In another mixed blessing, Netscape also gave us cookies. These small data packets revolutionized user tracking and personalization, and they are still used today by essentially every website on the planet. The browser also popularized many features we now take for granted, such as the back button and support for animated GIFs.

Netscape and open source

When Netscape saw the writing on the wall as its market share slumped, the company tried a desperate move: it open-sourced Navigator’s code. Today’s companies open-source their programs every day. Then, almost no one opened up their proprietary code. So, in 1998, Netscape became one of the first companies to release its source code. That code would eventually become Firefox.

The initial Mozilla codebase came directly from Netscape’s browser code. While much of this code was eventually rewritten, it provided the starting point for Mozilla’s development efforts. 

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For instance, Netscape originally developed the Gecko rendering engine, which is still used in Firefox today. The engine became a core component of Mozilla’s technology and is also used in other internet programs, such as the Thunderbird e-mail client. 

Besides the code, many early Mozilla developers, including co-founders Mitchell Baker and Brendan Eich, came from Netscape. Their experience and vision helped shape Firefox’s development.

Firefox has fallen on hard times. Today, the browser has less than 3% market share, a far cry from its 2010 high of 34.1%. Still, Firefox remains influential and was one of the first mass-market, open-source success stories. 

Netscape and finance

Silicon Valley has had a business culture all its own since the 1930s when Bill Hewlett and Dave Packard became friends at Stanford University and founded HP in a rented garage in Palo Alto, California. However, the Silicon Valley we know today — with warts, billionaires, and all — was started by the Netscape Initial Public Offering (IPO). 

In August 1995, this IPO was the starting line for the dot-com boom. The company went public at $28 per share and soared to $71 on the first day of trading, reaching a market capitalization of over $2 billion. 

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This dramatic IPO demonstrated enormous fortunes that could be made on the internet, attracting massive investor interest in tech companies. Netscape’s rapid rise gave us the concept of “internet time”, the notion that everything moved faster online. This concept fed into the frenzy of rapid growth expectations for internet companies.

Netscape’s innovative spirit and confrontational stance toward Microsoft embodied the ambitious ethos of many dot-com startups. This approach was about disrupting existing technologies and business models. 

Despite Netscape not yet being profitable, the company’s ever-soaring stock price set a precedent for valuing internet companies based on potential rather than actual earnings. This pattern of valuing growth over value still dominates in today’s stock market. 

However, just like Netscape played a major role in fueling the dot-com boom, the company would also be a key contributor to the eventual crash. Many internet companies were extremely overvalued, with investors pouring money into startups with no clear path to profitability. Speculation and hype drove stock prices to unsustainable levels. For a time, simply saying your business had an internet plan was enough to bring in investors. 

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With Netscape’s business beginning to flounder, in 1998 America Online (AOL) paid more than $10 billion for Netscape in a three-way deal with Sun Microsystems. Yet Netscape’s market share continued to dive. 

Many dot-com companies had unsustainable business models and burned through cash rapidly without generating profit. The Federal Reserve’s raising interest rates in 1999 and 2000 restricted cash flow, making debt financing more expensive, so investors started to move money out of speculative tech stocks.

The result? The NASDAQ fell by more than 25% during the week ending April 14, 2000. The dot com boom had become a bust. 

That fall wasn’t the only effect Netscape would have on the financial world. Andreessen, Netscape’s co-founder, became a prominent venture capitalist (VC), funding numerous tech startups.

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In 2009, he co-founded the venture capital firm Andreessen Horowitz (a16z) with his longtime business partner Ben Horowitz. This firm quickly became a powerhouse in Silicon Valley’s venture capital landscape.

But a16z was more than just another VC. It introduced a more holistic approach to nurturing startups, going beyond just providing capital. The firm offered comprehensive support, including help with recruiting, sales, marketing, and networking. 

The firm focused specifically on investing in companies based on computer science, regardless of their business sector. This approach helped identify and support many successful tech startups, including Facebook, Airbnb, Lyft, and GitHub. A16z set the business model for the modern Silicon Valley VC firm. 

So, even as Netscape fades into history, its influence remains powerful in technology and business. Netscape may have lost the browser wars, but we’ll feel its impact for generations to come.