AOL acquires Netscape in $4.2B deal (1998) | Hacker News Reader

AOL acquires Netscape in $4.2B deal (1998)

money.cnn.com

143 pointskkaefer60 comments

Good contemporary read: https://www-archive.mozilla.org/fear.html

jwz was right, the source code was out there and even though AOL eventually gave up on browser tech, the code lived on to become Firefox, re-igniting competition for web browsers, moving the web platform forward, and providing an independent browser that's beholden to users first.

That's a nice piece of history.

Steve Case replied to that article too - https://www-archive.mozilla.org/stevecase.html

> ...re-igniting competition for web browsers, moving the web platform forward

I fondly remember when the selling point of Firebird/Firefox was that it isn't a bloated, sluggish piece of crap unlike all other major browsers (including Netscape) at the time.

Back then, it was still possible to develop a web browser without hundreds of millions of dollars in budget. Fast forward to how the web platform has "progressed" and browsers are again sluggish, bloated pieces of crap, but now that horrible technology also powers far more applications. We've dug ourselves into a hole that we can't get out of anymore.

Back then, Gecko was already complex. Firefox streamlined the UI, dropping for instance the Email client and unnecessary widgets.

It can be done. Just the engine remains complex, but it‘s not that big a problem. If needed, we can add a new doctype, just like HTML5 that puts the browser into some sort of strict mode where features are dropped.

I don't recall precisely when but I do recall Netscape taking FOREVER to load, like you'd click on it and it'd take 10 seconds or more (that's what it felt like) to load. It'd sit on a splash screen telling you all the crap it was loading. IE at the time just loaded like a flash in comparison.

That was ultimately why I recall switching to IE at the time, nowadays there's no browser with that level of annoyance I don't think.

Well sure, IE loaded all that crap when windows loaded.

Yeah. It was already running the whole time, heck, it was the very shell of the OS. Opening an IE window was literally no different from opening a new (filesystem) Explorer window. Hence the decade-long antitrust battles.

Not really, there was a point where it loaded pretty snappily. I think they bundled a bunch of stuff like email client e.t.c. and it was busy loading that stuff along with the browser. That's my recollection anyway.

Even on Mac OS back then, IE was the better faster option of the two. Obviously it got left in the dust afterwards.

Yeah, I recall that, too. I think it's when they transitioned from "Navigator" (web browser only) to "Communicator" which bundled a lot of other crap in: mail, news, and I forget what else. Netscape 3.x and earlier was pretty light weight. I remember running Netscape 0.9something on my original linux desktop with 8 megs of RAM!

The browser actually have become so fast websites can afford to be bloated turds.

TIME Magazine: Visions 21- June 19, 2000.

Will AOL Own Everything? America Online could do in the early 21st century what Microsoft did at the end of the 20th: control the flow of key technologies

by Lawrence Lessig

pg. 9-11: https://transition.fcc.gov/transaction/aol-tw/exparte/disney...

There's a good Netscape documentary filmed during their last year leading up to the acquisition. When they were working to get the Mozilla source code released.

https://www.youtube.com/watch?v=4Q7FTjhvZ7Y

My favorite quote from that documentary, about people who work in tech:

"This is a monk-like existence. There are very few women in these societies. These are male societies. They are secret societies. They function very much like the Masons or some street gang."

at 53:30 one of the engineers says "We're at the beginning of an industry and who knows where that industry's gonna go? This could all turn into television again. It could be controlled by a small number of companies who decide what we see and hear. And there's a lot of precedent for that."

Sounds pretty prescient considering current events.

>one of the engineers

https://en.wikipedia.org/wiki/Jamie_Zawinski

There's lots of old-school people in that documentary. Brewster Kahle

I figured all these guys/girl are probably a big deal now but I don't know anything about SV culture or history.

I somehow have the suspicion that the guy is proud of his insight and disappointed to be right at the same time.

I was at Netscape at the time of the acquisition. When they offered buy-outs for employees that would volunteer for layoffs I gleefully waved my hand and left.

Why would they buy you out to be laid off? Wouldn't they have wanted to keep that kind of talent?

Right, this seems dumb as you're going to lose your best people first, since they're the ones knowing they'll have no issues finding something else on the open job market.

Best people is irrelevant after a buy out. In fact they are often the best paid so it’s a wash anyway.

On the other hand you also get rid of the people that don't want to be there.

At the time AOL was planning to shut down the Silicon Valley site and preferred to have everything in Virginia. Additionally they were already in talks with Time Warner (which internally we knew about).

There was a lot of redundancy in ops between AOL and Netscape, and AOL's talks with Time Warner made it apparent that their belief was that content and subscriber base was their future, not software... which is where I was at the time.

But then why did they buy Netscape?

Probably for the user base. IIRC Netscape switched from focusing on software to providing portal on the web. The browser became a tool for getting people to their start page.

Yep. Remember also that sites were paying browser makers to include their site as either the default homepage or included in the list of bookmarks.

I worked with a guy that was at AOL during the sale to TimeWarner. Apparently, in a large layoff round, they gave everyone a check for 6 months of salary and everyone went to a bar. The party was legendary. Lay-off + cash + lots of alcohol = cops + fights + tears.

I was at Netscape in Mountain View during that time, and i don't remember anyone getting a check that big at all. The severance checks weren't small, but nowhere near 6 months.

I did not get laid off (was part of Netcenter ops) but other friends did. A few months before the layoffs, they were all reorganized into one group too.

They had 2 meetings - morning meeting? laid off. Afternoon meeting? still employed. People were paged to one of the two meetings. A friend i was staying with was paged to the morning meeting, but thought "Eh, i'll just sleep in and go with you to the later one." Cue a bunch of pages and phone calls saying "you need to be in the morning meeting" and we just knew that things were not going to go well at all.

I ended up leaving that job shortly after, and honestly, I regret leaving to this day. I thought that we were all fixing to get re-org'd again or laid off a few months later, but i could have stayed there for a few more years easily. Sigh. Hindsight is 20/20, they say.

Thankfully Netscape decided to release the source code for "Mozilla" before this acquisition took place.

In 1998, $1 was worth $1.53 (in 2018 dollars), so this transaction would feel like a $6.4B deal.

Yeah, but Netscape was purchased with AOL stock, which was wildly inflated at the time, so you could also argue it feels like a couple hundred mil deal given the eventual tanking of AOL stock.

That was the thing about a lot of the huge deals of the original dotcom bubble. Most of them were made at inflated prices with (inflated) stock of the purchaser, but it's not like anyone ever paid that much cash for the total amount of those shares. That's one reason when the bubble burst that while painful it wasn't devastating to the overall economy: most of the insane valuations were never fully "realized" in the first place, so when they fell back to earth it really didn't wipe out as much wealth as the headline numbers made it seem.

  AOL, an industry behemoth with 14 million subscribers, will 
  acquire Netscape's Navigator and Communicator software, its 
  e-commerce software, and its Netcenter Internet "portal" 
  site, one of the 10 most-visited sites on the Internet.

The portal was supposed to be the real cash cow, here. Buying eyeballs in the early era of internet ads.

Q: What's a portal?

A: Yes, exactly.

They did have an advertising cash cow, just not as a web page.

Searching via a form directly embedded in the browser UI would end up being hugely valuable.

Google pays Apple ~$9 billion this year to remain the default search engine on Apple products.

AOL didn't know it. Browser search deals didn't exist until after AOL shut down Netscape in 2003. The first browser search deals arrived in 2004.

That's right, Google was gaining popularity fast but few knew about the profit monster that targetted search advertising was. They IPO'd in 2004.

AOL was Goto's biggest customer. Later renamed Overture Services. That was well before 2004.

Goto/Overture owned the patent on search advertising, which Google eventually settled legal proceedings regarding. And this is how Yahoo, when they bought Overture, got a bunch of Google stock if memory serves.

Anyway here is the AOL search advertising deal, or one of them. 2000 and they certainly knew of it before that:

https://www.ectnews.com/story/4194.html

>Q: What's a portal?

Alexa, Ok Google, App Stores, AMP and it's relationship with carousel widgets, etc.

This

I thought the answer was ‘Facebook without any activity from friends’ or ‘twitter’

To be fair my grandmothers home page is still mail.aol.com. And its only that because I changed it from aol.com years ago.

Its still big money to claim the homepage of most people over 60. Most to my knowledge still don't use smartphones - at least for email, which they do use - which they have a home PC for of some kind to open a browser and go to aol, msn (redirected to outlook), or yahoo.com.

As of 2011 the netscape forums were still active.

https://forums.somethingawful.com/showthread.php?threadid=33...

Google feels like a portal now with the number of services they have. They just have a search interface instead of a "a million links on the front page" interface

It is, and it's called Facebook.

And the two attached sound files are still working. Pretty crazy actually

And it's a very prescient comment for a company that wasn't ultimately successful:

...we call the "AOL anywhere strategy" and although predominantly people use personal computers, over the next few years we think a variety of internet devices, some pocket devices, some television devices, will become more and more important and working with Sun and Java as well as other operating systems we want to create the best possible set, kind of a family of these internet devices for AOL and for Netscape.

Of course Java would end up on those "pocket devices" in the form of Android.

Alright, the article itself is not so interesting (for me) as the fact that CNN apparently keeps the entire design for an article from '98.

The BBC does the same. Here is their coverage of the same story: http://news.bbc.co.uk/1/hi/business/221295.stm . The navigation links on the side even still work.

Presumably pages were either statically generated AOT, or edited directly back then.

This was largely a patent buy, they later sold them to Microsoft for a billion in 2012 [1], which Facebook ended up buying 650 of the 800 they bought from AOL [2].

[1] https://www.zdnet.com/article/microsoft-buys-netscape-web-pa...

[2] https://arstechnica.com/tech-policy/2012/04/facebook-will-bu...

Aol (now oath) in Ashburn still has a Mozilla statue in the front hallway — it’s a Pokémon Go gym, for some reason, even though only Aol employees can get close enough to it.

I have two pairs of boxer shorts that came from the Netscape company store. They are still in great shape (i don't actually wear them..) that have the Netscape logo and Mozilla the character on them.

I wish I didn't actually wear (and wear out) my Netscape Communicator t-shirts. And I'm also kicking myself for not buying a bunch of other logo items!

Tried Cafepress?

It should be said, despite the massive stupidity of how AOL handled what they bought, that their primary motivation might have been to use it as a bargaining chip with Microsoft: "play nice, or we'll make Netscape the default browser for AOL". At the time, that would have made IE a minority browser again, IIRC.

I think it was more than that. They paid $4.2B for Netscape. I think they wanted Netscape's presence on the Web. They were a walled garden dial-up era media company with a lucrative subscription base trying to migrate their business to something for the broadband era - the Web. Netscape had a top 10 website and that was in big part because it was the default home page for Netscape's browser, used by half of the people on the Web that year. They wanted that package, IMO. (And maybe they bought some vision from Netscape about a Java-connected internet of things.)

AOL already had its own built-in browser (the imaginatively titled "AOL Browser"), although it used the IE rendering engine under the hood IIRC.

Internet Radio Podcast first 10-15 episode cover this in great detail. Was so interesting for me. http://www.internethistorypodcast.com

And sold to Verizon by $4.1B later on...

If you want to see the entire history of AOL acquisitions look here [1].

As the list grew, there was a sense in the crowd that AOL is a cemetery for startups. That is, ,buying them in, and then shortly afterwards, they die.

[1]: https://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL

AOL Keyword: Netscape

I think of that every time I see an ad with a facebook page, instagram, or twitter handle.

Worst thing for the web ever

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