Case 1 Netscape Final
Case 1 – Netscape Initial Public Offering
Course: Corporate Finance
Date: 09-02-2015
Suzanne Groen
Nikki Krayenoord
Zhenni Hu
Juliette van der Werf
10003288
10872043
10824286
6165796
1
Netscape Communication Corporation
Netscape Communication Corporation is a software company founded in April 1994 by Marc
Andreessen (co-founder of Mosaic) and Jim Clark (founder of Silicon Graphics).
Their mission was to provide open software that connects information and people over the Internet and
Intranet. The industry Netscape was in was an extremely unpredictable industry. This Internet sector was fast growing, and quickly expanding. The stock prices increased rapidly and the future profit expectations were great. These times were promising, and therefore the opportunity for young companies to go public. However, there were huge risks involved for these young companies in the type of sector. This case answers the questions with respect to the Initial Public Offering of Netscape.
Case Questions
Question 1. Why has Netscape been successful to date? What is its strategy? How risky is its current competitive situation?
During the start of Netscape, mid-nineties, the Internet market experienced an enormous evolution. This creates new opportunities for software companies, as the market was growing very fast.
The advantage of Netscape was being the first one who focused one-web browsers.
Besides the first-mover advantage, they had a little competition in the market from other companies. There were no other dominant players in the market. Therefore in a short time period, they achieved the market leader position with the Netscape communicator and commercial. Netscape could command strong customer loyalty and high brand recognition, which enabled them to grow in the leader position. The disadvantage, which was involved with these opportunities, is the competition from multiple players who are coming in. In a short time period more competitors are attracted and this increases the
Course: Corporate Finance
Date: 09-02-2015
Suzanne Groen
Nikki Krayenoord
Zhenni Hu
Juliette van der Werf
10003288
10872043
10824286
6165796
1
Netscape Communication Corporation
Netscape Communication Corporation is a software company founded in April 1994 by Marc
Andreessen (co-founder of Mosaic) and Jim Clark (founder of Silicon Graphics).
Their mission was to provide open software that connects information and people over the Internet and
Intranet. The industry Netscape was in was an extremely unpredictable industry. This Internet sector was fast growing, and quickly expanding. The stock prices increased rapidly and the future profit expectations were great. These times were promising, and therefore the opportunity for young companies to go public. However, there were huge risks involved for these young companies in the type of sector. This case answers the questions with respect to the Initial Public Offering of Netscape.
Case Questions
Question 1. Why has Netscape been successful to date? What is its strategy? How risky is its current competitive situation?
During the start of Netscape, mid-nineties, the Internet market experienced an enormous evolution. This creates new opportunities for software companies, as the market was growing very fast.
The advantage of Netscape was being the first one who focused one-web browsers.
Besides the first-mover advantage, they had a little competition in the market from other companies. There were no other dominant players in the market. Therefore in a short time period, they achieved the market leader position with the Netscape communicator and commercial. Netscape could command strong customer loyalty and high brand recognition, which enabled them to grow in the leader position. The disadvantage, which was involved with these opportunities, is the competition from multiple players who are coming in. In a short time period more competitors are attracted and this increases the