How Netscape lost to Internet Explorer


by Angus Davis

Lack of focus, and fighting the other guy's game. Some perspective follows:

At one point we had 4 teams actively building Netscape 4.06, Netscape 4.5 (code-named Nova), Netscape 5.0 (code-named Grommit) and Netscape 6.0 (code-named Raptor) -- simultaneously. At the time, I was the product manager for Raptor (the technology today called Gecko at core of Firefox). Our effort was split four ways, despite recently completing our first layoffs while hemorrhaging market share to Microsoft IE 3.x and 4.x. Meanwhile, the client products division had dueling goals of building a great client for enterprise collaboration (competing with exchange, cc:mail, notes) and quite separately, building a world-class Internet browser. 

Jim Barksdale had a great saying: in the fight between the bear and the alligator, the winner will be determined by the terrain.

The browser war was lost in part because we (Netscape) jumped into the swamp with the alligator to fight in the enterprise, instead of making him (Microsoft) run into the woods to fight us on our own turf - the Internet.

I testified before the Senate judiciary committee staff during their investigation into Microsoft for anti-trust violations. While we can argue over whether Microsoft abused its monopoly power to pressure OEMs and AOL into distributing IE over Navigator, Microsoft's cunning (some would argue illegal) distribution deals in the late 90's are no excuse for Netscape taking its eye off the ball it created. Hindsight is 20/20, but I like to think we could have eaten that fierce alligator for dinner had we found a way to corner him in our bear's den, instead of jumping into his swamp.

Ironically, I later went on to work at Microsoft when they acquired Tellme in 2007, at a time when all of this was a distant memory. Both MS & Netscape were amazing companies and I have huge respect for all the players. One of the first people Mike and I hired at Tellme in 1999 was Hadi Partovi - the very guy who was kicking our ass running the IE 4 team while we were at Netscape :-)

One last thing -- you may wonder why Netscape was motivated to focus on enterprise instead of the Internet. The answer is simple: revenue growth as a public company. I have some appreciation for folks like Facebook who stayed private "too long", as public market growth incentives can sometimes have unexpected impacts on your strategy.