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Microsoft Thursday, 10 February, 2000, 14:52 GMT
Netscape: A history
Jim Barksdale
James Barksdale led Netscape's browser battles
Netscape was the pioneering company in the field of internet browsers.

Its Navigator provided the first user-friendly way for people to be able to surf the vast amounts of information on the internet.
Netscape launched the Navigator internet browser, the first mass market way for people to find their way around the net, in 1994.
Microsoft, seeing the browser as a threat, launched its own browser, Internet Explorer (IE), which it gives away free.
Microsoft bundled IE with Windows 95 and favoured computer makers which used IE instead of Navigator.
Netscape lived to fight another day after being bought by America Online.
It was its rapid growth, and the threat of domination of the market, which caused Microsoft to use the rough house tactics to get its Internet Explorer browser into a market leading position.

The brains behind Netscape was Marc Andreessen.

It was in 1992, as an undergraduate working at the University of Illinois National Centre for Supercomputing Applications, that he and fellow student Eric Bina wrote Mosaic, which is acknowledged as the first ever graphical Web browser.

This browser created a user-friendly way of allowing users to find their way around the world wide web.

That task took them just six weeks to complete, and shortly afterwards Andreessen moved to Silicon Valley to work for a small software firm.

Soon afterwards, Jim Clark, the co-founder of Silicon Graphics, e-mailed him.

Swiss origins

A series of meetings between the young software writer and the Silicon Valley legend led to the creation of Mosaic Communications, later to become Netscape Communications, in the spring of 1994.

That was the year in which James Barksdale arrived from AT&T, becoming Netscape chief executive in 1995.

He was at the helm during the browser battles which led to the launch of the anti-trust trial in 1997.

The key events are, according to Barksdale's testimony, that Netscape released the first beta version of its Netscape Navigator 1.0 browser in October 1994 and that in December 1994 the final version was released.

The same month, Microsoft licensed Mosaic from Spyglass, the University of Illinois' contractor to promote Mosaic.

Although Netscape may have given the impression that Andreessen invented browsing, they had been developed at CERN in Switzerland, downloaded in Illinois, and only then further developed by Andreessen and others.

'Play ball or else'

In January 1995, Microsoft had just four people working on developing a browser.

It was not until May 1995 that Bill Gates told Microsoft executives "Now I assign the internet the highest level of importance."

Following increasing media criticism that Microsoft was falling behind in its adoption of the internet, in December 1995 Gates announced that Microsoft was now taking the Internet seriously, and that its Internet Explorer browser, developed from Mosaic, would be free.

Prior to that, in June 1995, there were what Barksdale has described as "play-ball-or-else" meetings between Netscape and Microsoft.

Netscape wanted to get from Microsoft the same technical information that Microsoft distributed to all software developers to enable their products to work with Windows.

Windows licence threat

But Barksdale said he was told that Microsoft wanted Netscape to stop development of a Windows 95 browser (which was seen as the largest potential browser market), in return for Microsoft agreeing to give Netscape a clear run at the relatively small browser markets for Windows 3.x, MacOS and Unix.

Microsoft said it was also willing to make an investment in Netscape, and wanted a seat on the board but Netscape refused the illegal market-splitting suggestion, Barksdale said, and incurred Microsoft's considerable wrath.

Barksdale's testimony described how "Microsoft began to use its market power to extract exclusionary deals with many of the largest [PC manufacturers and internet service providers]", threatening Netscape customers such as Compaq that if it tried to replace the Internet Explorer icon with the Netscape Navigator icon on its Presario range of computers, Microsoft would withdraw Compaq's Windows 95 licence.

Microsoft, by contrast, claims that Netscape is a whiner and poor competitor.

Netscape is widely seen to have made the situation worse for itself by continuing to charge for its browser, while IE was free.

Following a stunning rise on its flotation in the US - a prelude of the internet fever to come - the Microsoft assault wiped more than two thirds from its market value.

The effect was shown in the last three months of 1997 when Netscape made a loss of $88.3m, compared to a profit of $8.15m a year earlier.

Barksdale alleged that Microsoft not only used its monopoly to cut off Netscape's opportunities, but also paid key Netscape customers to change to Internet Explorer.

Dominance rivals Microsoft

He said technical information to make Navigator work with Windows 95 was held back because of its refusal to stop Navigator development for Windows 95.

The key part of Barksdale's account was where he alleges that at a meeting on 21 June 1995 Microsoft tried illegally to split the browser market with Netscape.

As it turned out, Netscape ended up being taken over by one of those big firms which had been persuaded to favour Microsoft's browser.

America Online, which bought Netscape for more than $4bn in 1999, had done a deal with Microsoft to favour Internet Explorer in return for AOL getting an icon on the Microsoft desktop.

But that later purchase of Netscape, added to the January merger with entertainment and media giant Time Warner, means that Netscape is now part of a firm which is arguably as influential and powerful in the market as Microsoft.

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