Netscape navigates the Internet with aplomb via browser, server

From PC Week for April 24, 1995 by Anne Knowles

Netscape Communications Corp. is cruising in the fast lane on the information highway.

The company leads the market for World-Wide Web servers, and according to the Internet Society, more than three quarters of the browsers on the Web are Netscape's Navigator.

The company's products have attracted impressive customers, including electronic commerce pioneers such as Bank of America, Capitol One Bank, MasterCard International Inc., and MCI Telecommunications Inc.

Netscape has also signed as OEMs Internet veterans such as Digital Equipment Corp. and Silicon Graphics Inc., as well as Sun Microsystems Inc. -- whose hardware makes up more than half the servers on the Internet.

Besides customers, Netscape has attracted investments from Adobe Systems Inc., The Times Mirror Co., Knight-Ridder Inc., TCI Technology Ventures, and Tele-Communications Inc.

The company's management is first-rate, according to analysts. The group includes Jim Clark, founder of Silicon Graphics; Marc Andreessen, vice president of technology and developer of Mosaic, the original Web browser; and James Barksdale, former McCaw Cellular Communications Inc. president and, since January, Netscape's president and CEO.

"What attracted me to the company was it seemed to be solving a need in a very large emerging market with long-term growth possibilities," said Barksdale.

Founded in April 1994, the Mountain View, Calif., startup delivered a browser that improved on Mosaic and a server designed for electronic commerce by December. "Netscape brought out good technology to market first and fast," said Stan Lepeak, an analyst with Meta Group Inc., in Stamford, Conn.

Right now, Netscape has few competitors, none threatening its hegemony. Analysts believe the only blight on Netscape's horizon is that 800-pound gorilla in Redmond, Wash. Microsoft Corp. is building an Internet browser into Windows 95, which is slated to ship in August.

"The bottom line is, is [Netscape] going to dominate this market, or is Microsoft going to blow them away?" said Bob Herwick, an analyst with Herwick Capital Management, in San Francisco.

Barksdale doesn't think so. "I see Windows 95 as another distribution channel," he said. "The browser won't be as good as Netscape's, I'm sure, and users will use it to download Navigator off the Net."

Industry analysts have not yet made estimates of the privately held company's revenues; the recent investment by Adobe and others involved an undisclosed sum.

But Netscape's revenues have to be driven more by its servers, which are priced from $1,500 to $50,000, than by its $39 browser. And in servers, according to analysts, Netscape will prevail.

"Microsoft isn't focusing on what Netscape is providing," said Lepeak. "Microsoft will concentrate on the network side, and Netscape will fit in with its commerce server product."