Netscape's 24-year-old co-founder was worth $58 million. Then Microsoft gave browsers away.
As a student paid $6.85 an hour, Marc Andreessen helped build Mosaic, the first graphical web browser, then founded Netscape with investor Jim Clark. Its browser, Navigator, was sold under licence; licences brought in a significant portion of its revenue.
In May 1995, Bill Gates wrote to his executives: "A new competitor 'born' on the Internet is Netscape. Their browser is dominant, with 70% usage share."
That August, Netscape shares opened at $71, not the expected $28. Andreessen's stake was worth $58 million on paper, TIME reported.
A federal judge later found that Microsoft's top executives decided to give their browser away, at no extra charge inside Windows. In court-record estimates, Navigator fell from above 80% to 55% in under two years. Three years after the IPO, AOL agreed to buy Netscape in stock valued at $4.2 billion. In 2001 an appeals court upheld the Windows monopoly ruling, reversed the attempted browser monopoly finding and vacated the break-up order. A 2002 consent decree ended the case.
For enterprise software sellers, the threat was price plus distribution: a free rival inside the platform.
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Microsoft
What the captions say
- This is the story of how Netscape made its 24-year-old co-founder worth $58 million, and how Microsoft gave away the kind of product Netscape sold.
- At 22, Marc Andreessen was a student at the University of Illinois, paid $6.85 an hour.
- There, he helped build Mosaic, the first graphical browser for the World Wide Web.
- With investor Jim Clark, he founded Netscape. The plan, TIME wrote, was to become a kind of Microsoft of the internet.
- At Microsoft, Bill Gates was watching. In May 1995, he wrote to his top executives that the internet was the biggest development since the IBM PC.
- Gates wrote, "A new competitor 'born' on the Internet is Netscape. Their browser is dominant, with 70% usage share."
- That August, Netscape sold its shares to the public. They were expected at $28. They opened at $71.
- Andreessen, 24, was suddenly worth $58 million on paper. He told TIME it was all still funny money.
- Netscape earned a big part of its money from licenses for its browser, Navigator. Microsoft knew that.
- A federal judge later found that Microsoft's senior executives decided to give their browser away. Internet Explorer came inside Windows, at no extra price.
- By court-record estimates, Navigator's share fell from above 80% to 55% in under two years.
- In late 1998, AOL agreed to buy Netscape, in stock valued at $4.2 billion.
- Andreessen later told Wired magazine about the moment Mosaic worked: "I was like, wait a minute, you can actually change the world!"
