Netscape Ipo

The largest stakeholder of Netscape’s equity was Jim Clark, who accounted for 24%. The other primary owners were the venture capital firm Kleiner, Perkins, Caufield, & Byers, a group of six media companies led by Adobe Systems, and Netscape’s president and CEO, James Barksdale. They held 11%, 11%, and 10% of Netscape’s equity, respectively. The ownership shares of Netscape did not correspond to the investments made by the primary owners because the owners made their investments at different times. Jim Clark invested in Netscape first and therefore paid the least amount of money for the largest share of the firm. His second investment came at the same time as Kleiner Perkins, and at that point the price to purchase a share of Netscape had obviously increased. Clark’s total investment amounted to $3.5 million for 24% of the firm, whereas Kleiner Perkins paid $5 million for 11% of the firm. The investment made by the media companies came later, when the price of Netscape had risen even further. Therefore, the media firms purchased an aggregate 11% share of Netscape for $18 million. The final primary owner, Barksdale, was not said to have invested any capital in Netscape. However, as president and CEO, it can be assumed that he was offered a 10% share as an incentive to guide and motivate the company to perform well.

6. As an executive of Netscape, what would you recommend with respect to the proposed offering price? As an investor in Netscape, what would you recommend? AS a manager of an institutional fund who is willing to buy and hold Netscape’s stock at the originally proposed price of $14 per share, would you be willing to buy and hold at an initial offer price of $28.

The name was later changed to Netscape Communications Corporation when the University of Illinois (which owned the trademark on the name Mosaic) threatened legal action. Netscape can be considered an advocate for the dot com era. They were not the first internet start-up, but they were the only one that mattered. Netscape produced Netscape Navigator which went on to become its first widely popular internet application. Netscape Navigator became really popular after the launch of the World Wide Web. Netscape Navigator introduced millions to the web. SSL, Java, JavaScript, open APIs and support for online media were innovations that Netscape Navigator made relevant. The next best thing of Netscape was the Netscape IPO. It helped launch the internet era that we are currently living in. It is thought that Netscape was born in Silicon Valley, but actually it was in Champaign Urbana, Illinois at the University of Illinois. It all started with a bunch of young programmers and software developers hanging out in a basement. The group was called the software development group. These programmers and software developers were working for barely above minimum wage at the National Center for Supercomputing Applications (NCSA). Aleks Totic and Jon Mittelhauser were a part of the group. Totic went on to develop Mac versions of both Mosaic and Netscape Navigator and Mittelhauser went on to develop the Windows

The time is now 1995; the internet is slowly evolving, and just as the company survived the arrival of television and other technology so it must with the internet. Convinced the internet will have

A recurring point in Gilbert's studies included the notion that people were utterly incapable of making predictions that would lead to their actual optimal happiness. A study showed "that about nine out of ten people expect to feel more regret when they foolishly switch stocks than when they foolishly fail to switch stocks", but the study also showed that those "nine out of ten people are wrong" in assuming that expectation (Gilbert 135). A majority of consumers also made an incorrect assumption, as described by Stiglitz, which resulted in the maintenance and growth of one of the most well known monopolies of the present. The consumers assumed that, due to it's "near-monopoly on PC operating systems," Microsoft was a good and innovative company and is capable in handling computer systems. This was not the case when it came to "alternative technologies" such as the "development of the Internet and the web browser" because their competitor, Netscape, was "building on government-funded research" while Microsoft had no such incentive (Stiglitz 405). Microsoft then decided to launch their Internet Explorer, but by itself Internet Explorer could not compete against Netscape. They knew this, and so "decided to use its monopoly power in PC operating systems to make sure that the playing field was not level." They offered Internet Explorer for

In order for Microsoft to be able to reach the goals set by Bill Gates, they must use their considerable resources efficiently to create a place in each market for the online consumer. If they wish to produce and offer online services such as electronic mail, information data bases, personal finance management, video on demand, and electronic commerce, then acquiring firms already specialized in at least some of these areas is the most efficient way to do so. Intuit’s products align with Microsoft’s without significant overlap such that the combined firms would provide a handsome horizontally integrated suite of products with prime market share positions including word processing (49% market share), spreadsheet (48% market share), tax preparation, accounting, banking, and bill paying which would all open up the prospect of continued online grazing by the user leading to repeat sales to Microsoft’s video on demand and future entertainment market. The larger objective would be to capture the user in a web to conduct direct financial transactions over the

Microsoft announced to integrate the internet technologies on Windows 95 and Office 97 giving an impetus to the sales of these products and a portion of these revenues should be deferred into the future.

“All of these qualities were evident in Gates’s nimble response to the sudden public interest in the Internet. Beginning in 1995 and 1996, Gates feverishly refocused Microsoft on the development of consumer and enterprise software solutions for the Internet, developed the Windows CE operating system platform for networking non computer devices such as home televisions and personal digital assistants, created the Microsoft Network to compete with America Online and other Internet providers, and through Gates’s company Corbis, acquired the huge Bett mann photo archives and other collections for use in electronic distribution.

First, Microsoft ‘encouraged’ Compaq, Apple, and other computer manufacturers to promote only Internet Explorer, and to make that the default browser on their PC. This encouragement came in the way of threats to eliminate or delay licensing of operating systems, providing the browser for free to internet access providers, and bundling the software with the operating system under the guise of interactive ease for the consumer. This manipulation led to an increase in the browser’s sales by 45 to 50%, which paralleled the decline Netscape experienced in their market sales in 1998.6

In the editorial “Verizon’s AOL deal: ISPs go searching for content”, by The Times Editorial Board, points out the important benefits that Verizon acquired by buying AOL, the most popular dial-up internet service in the country. The principal reasons of the agreement to buy AOL and the benefits they received are: AOL’s content business, the subscriber's exclusive content access, and the probability to have preferable treatment to sites and services for their customers. First, Verizon's smart move was to obtain primarily the business content from AOL. All the advertising tools from AOL are an important investment for the future of Verizon's strong standing. Another benefit that Verizon obtain from AOL was the subscribers

had used tactics to protect the monopoly it had over the software and browser industry. The case

Flatter #2: 98/9/95 Netscape: Friedman believes that this was the essence of people to people connectivity and hence a huge flattener. He says that Netscape going public played a key role in commercializing internet and making it accessible to everyone across the globe.

* Capital raised in an IPO can be used to pay off debt and thus reduce the interest costs and enhance the company’s debt to equity ratio

to This browser would threaten to remove the application barrier which enabled Microsoft’s monopoly position on operating systems for many years. The software application - internet browser allows users to retrieve, present, and pass over information resources on the World Wide Web and contains Applications Programming Interface (API) which allows programmer to write other application programs. on it. In addition, the development of new programming language “Java” by Sun Microsystems allows programmer to write applications in it which can be run on various operating systems. Both the twoJave a Netscape Navigator innovations corporate use each other; because Java applications are especially written for the internet and the Netscape browser was a primary distribution channel for java applications. Therefore, the developments of the Netscape browsers along with the java programming language enables software applications to run across operating systems reducereducing Microsoft’s competitive strategy and threaten its monopolisticy position.

Firstly, interest on debt is tax deductible, therefore, debt is the least costly source of long-term financing as this is a tax saving for the frim. Thus, creditors or bondholders require a lower return on debt as it is considered a reflectively less risky investment. Secondly, the capital structure of a firm is flexible due to debt financing. Ultimately, bondholders are creditors and they do not have voting rights, hence, they are not involved in decision making and business operations. Additionally, the major advantages of equity finance are as follows. Firstly, the capital provided is to finance the businesses short term needs and future projects. Secondly, the business will not have to pay any additional bank expenses such as interest on loans, thus allowing the business to use the money for business activities. Lastly, investors anticipate that the business will develop thus they help in exploring and executing thoughts. Certain sources, for example, venture capitalists and business angel can bring significant skills, abilities, contacts and experience to businesses and they can also provide expertise advice to businesses (Hofstrand,