Managing Innovation MBA-678
Professor John Byrne
November 20, 2012
Although Netscape had first mover advantage and a strong product; Microsoft was able to knock them out of the competition for Internet browser control. This was accomplished mainly by bundling Microsoft’s Internet browser, Internet Explorer, with its operating systems. Netscape was unable to compete and was ultimately purchased by America Online. AOL can now utilize several of the Netscape’s strengths to add value to their base product as an Internet portal and in establishing the browser of the future that will be used in non-PC Internet connected devices. Problem Statement
Microsoft is attempting to establish a monopoly lock on the browser market. If this happens, they could potentially create proprietary control of the way customers access the internet and the standards used in creating webpages, effectively crippling any current or future competitors. Statement of Facts
Netscape believed that eventually the network would replace the computer and cross-platform browsers would be more important than the operating system. Their vision of the future included a single interface that smart phones, television and interactive games would all use to communicate. This vision necessitated open standards to connect everything. Netscape released the first version of navigator in 1994 and almost immediately gained more than 50% of browser market share. The web was its primary distribution channel but over time it expanded into other means of distribution. Netscape negotiated bundling arrangements with computer manufacturers and software venders. It was originally priced at $39, but was free for academic and non-profit use. By 1995 Navigator had more than 10 million users and over $40 million in sales. The growth continued for 10 quarters but reversed in 1997. In response to the fall in revenues, Netscape cutback their...