Netscape's Work Culture
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THE SETBACKAfter the acquisition, AOL planned
to integrate Netscape's web-browser products and Netcenter portal site with
its Interactive Services Group[17]. The company created a Netscape Enterprise
Group in alliance with Sun Microsystems[18] to develop software products ranging
from basic web servers and messaging products to e-commerce applications.
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However, overlapping technologies and organizational
red tape slowed down the process of integration. Within a year of the
acquisition, Netscape browser's marketshare fell from 73% to 36%.
Andreessen, who had joined AOL as chief technology officer, resigned
only after six months on the job.
His departure triggered a mass exodus of software engineering talent
from Netscape. Soon after, engineers from Netscape joined Silicon Valley
start-ups like Accept.com, Tellme Networks, Apogee Venture Group and
ITIXS. Former Netscape vice president of technology Mike McCue and
product manager Angus Davis founded Tellme Networks. |
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They brought with them John Giannandrea. As chief
technologist and principal engineer of the browser group, John Giannandrea
was involved with every Navigator release from the first beta of 1.0 in 1994
to the launch of 4.5 version in Oct. 1998. Ramanathan Guha, one of
Netscape's most senior engineers, left a $4 million salary at AOL to join
Epinions.com.
He was soon joined by Lou Montulli and Aleksander Totic, two of Netscape's
six founding engineers. Other Netscape employees helped start Responsys.
Some employees joined Accept.com and others AuctionWatch. Spark PR was
staffed almost entirely by former Netscape PR employees.
Market watchers were surprised and worried about this exodus of Netscape
employees. Some of them felt that the mass exodus might have been caused by
monetary considerations. Most of the employees at Netscape had stock
options. Once the acquisition was announced, the value of those options rose
significantly.
David Yoffie, a Harvard Business School professor said, “When AOL's stock
went up, the stock of most of the creative people was worth a ... fortune.”
Most of them encashed their options and left the company. But some analysts
believed that there were other serious reasons for the exodus.
Netscape employees always perceived themselves as an aggressive team of
revolutionaries who could change the world. Before resigning from AOL, Jamie
Zawinski, the 20th person hired at Nescape, said, “When we started this
company, we were out to change the world. We were the ones who actually did
it.
When you see URLs on grocery bags, on billboards, on the sides of trucks, at
the end of movie credits just after the studio logos – that was us, we did
that. We put the Internet in the hands of normal people. We kick-started a
new communications medium. We changed the world.” Another ex-employee said,
“We really believed in the vision and had a great feeling about our
company.” But the merger with AOL reduced them to a small part of a big
company, with slow-moving culture.
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EXHIBIT I - NETSCAPE – CHRONOLOGY OF EVENTS
EXHIBIT II - NETSCAPE TIME
EXHIBIT III - BENEFITS FOR NETSCAPE EMPLOYEES
EXHIBIT IV - NETSCAPE CONSOLIDATED STATEMENT OF OPERATIONS
[17]
A provider of online Internet portal services and developer of Internet
browser software.
[18]
Sun Microsystems, Inc. is a leading provider of industrial-strength
hardware, software, and services that power the Internet.
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