Netscape's IPO Anniversary and the Internet Boom

Netscape held its initial public offering of stock 10 years ago Tuesday, a moment considered by many to mark the start of the Internet boom. Eric Niiler looks back on those heady days, and the economic consequences of the boom — and later, the bust.

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MADELEINE BRAND, host:

And there's a reason for that Short List on this particular day. Ten years ago, Netscape made its first public stock offering. Shares opened at $28. By the end of the trading day, they were going for 75. The Netscape offering marked the beginning of the dot-com boom. Here's NPR's Eric Niiler.

ERIC NIILER reporting:

For many folks, the big news on August 9th, 1995, was the death of Grateful Dead leader Jerry Garcia. But on Wall Street, Netscape's initial public offering was blood in the water to frenzied traders.

Mr. GEORGE LEWIS (NBC News): At 11 AM this morning, the company's stock went public and Wall Street went bonkers.

NIILER: That's how NBC's George Lewis recounted Netscape's first day of public trading. By December of 1995, Netscape was trading at $171 a share. Pretty good for a startup founded by a 23-year-old computer programmer and some college buddies from Illinois. Kevin Kelly was editor of Wired magazine. The San Francisco publication covered the Silicon Valley gold rush.

Mr. KEVIN KELLY (Wired Magazine): Here was a company that basically had not only no profits, but it didn't even have a suggestion of how it was going to make money.

NIILER: Investors were swept away by the novelty of the Netscape browser. Instead of an arcane subculture used by scientists and students, the Web became a tool for everyday people.

Mr. KELLY: It was pictures, easy clicking. It was very, very welcoming, and had--you know, people were putting up home pages about their dogs and their families, and so it was very humanizing.

NIILER: Netscape was not the first Internet-based company on the market, but it was the first to attract media attention and, more importantly, investors. John Giannandrea went to work for Netscape in 1994 as a programmer. He was lured by the challenge of making the Internet useful to ordinary folks.

Mr. JOHN GIANNANDREA (Netscape Programmer): It had to work with any Web site anybody could create, and that's actually technically quite difficult to do, but it's the key thing that makes a Web browser work well.

NIILER: Giannandrea said there were long nights spent in Netscape's office coding software to meet product deadlines. For him and the other engineers, the payoff was not the big stock prices, but in seeing the browser's public reception.

Mr. GIANNANDREA: There was a shared sense that we were doing something potentially important, and as so many people started to use the Web, then it became actually important.

NIILER: The Netscape IPO kicked off a five-year dot-com rush. Companies with crazy ideas, like Net-based dry cleaning, chased investors wanting to cash in on in the Internet. It all crashed in the spring of 2000 when the stock market began a nearly three-year downward spiral. Companies folded. Kevin Kelly said the Internet as a technology survived because it changed society.

Mr. KELLY: The surprising effect of the Web was how quickly it penetrated into people's lives. It's just really hard now to imagine a world where there's no Web at all.

NIILER: In 1995, Netscape dominated the browser market. Today it's a shadow of its former self, a division of AOL, but Netscape helped usher in a second more successful generation of Internet firms like Google, eBay and Amazon. Kelly says that 10 years from now, nothing won't be on the Web. Eric Niiler, NPR News.

BRAND: DAY TO DAY returns in a moment. I'm Madeleine Brand.

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