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With $81 million in sales and 600 employees, Netscape had enjoyed a comfortable dominance of the infant Internet world. Its killer app was a program that made navigating the Net as simple as pointing at what you wanted to see and clicking on it. Browsers brought order to the chaos of the World Wide Web, a corner of the Net stuffed with text, sounds and pictures. Netscape's Navigator browser was the best on the market, and it had propelled the company through a wildly successful initial public offering in August. Some analysts were saying Netscape had an invincible lead...
Proof of that came on Aug. 13, when Microsoft unveiled Explorer 3.0, the newest version of its Web-browsing software. The 8-megabyte behemoth matched Netscape's franchise browser, Navigator, feature for feature, and at a much better price--free. Available over the Web, the browser notched a million downloads in its first week. Netscape stockholders voted with their feet: by late August, Netscape stock had shed half its value from a December high, while Microsoft shares approached record levels. And Gates swore the best was yet to come...
Netscape wasted little time in counterattacking. Two weeks later, on Aug. 26, company founder Jim Clark unveiled blueprints for a new software firm called Navio that will try to outflank Microsoft by putting browser software on pretty much anything with a screen and a modem. The first stop is likely to be an Internet TV, followed by a $500 network computer, online video gaming machines and Net-surfing cell phones. Organized around a powerhouse electronics alliance that includes just about everyone but Microsoft (Sony, NEC, Nintendo and IBM are supporting the venture), the company...
...programmers, this means their pages can do more than just display pictures. Java-enabled sites will be able to act as word processors, telephones and even (if you have a TV receiver hooked up to your computer) vcrs. And although Microsoft has tried to embrace Java--its new Explorer browser will run programs written in the language--it is still seen more as a strategic weapon for Netscape, since Java software could one day compete with Microsoft products such as Word and Excel...
That put extra pressure on Microsoft to deliver a world-class browser. Explorer 2.0, the browser Microsoft released early this spring, was a poor second cousin to Navigator 2.0. Gates knew Internet Explorer 3.0 had to be far better. So the company began throwing bodies at the problem. From August to November 1995, the browser group grew from eight to 30 employees. By the time Explorer 3.0 was released last month, that number had risen...