American History 1988
Chapter 371 - 360: Troublesome Autumn

Chapter 371: Chapter 360: Troublesome Autumn

The closing price of Netscape that day eventually ended at 49 US Dollars, which was 3.5 times the issue price and double the opening price!

Similarly, on the first day of its listing, Netscape’s market capitalization soared straight from an IPO valuation of 1.8 billion US Dollars to 63 billion US Dollars.

It broke all Wall Street records for stock offerings, including that of Bit Company four years earlier.

This company, established for two years and truly profitable for less than one, created dozens of millionaires overnight.

On the first day of listing, the stock price even peaked near 70 US Dollars at its highest.

Wall Street and stock analysts simply couldn’t understand Netscape’s stock.

The expertise they relied on for survival seemed to fail them at this moment.

Because there were so many clients interested in Netscape’s debut offering, Charles Schwab even changed their telephone voice response.

"Welcome to Charles Schwab, to learn about Netscape’s initial public offering, please press 1."

Morgan Stanley also increased their hotlines to cope with the endless consultation calls, as too many people wanted to buy this stock.

Two days later, a "Fortune" magazine article reviewing this event described Netscape’s IPO as "the spark that ignited the internet boom."

In fact, that’s true. Netscape’s dazzling debut completely set off the internet gold rush.

Almost within a week, dozens of various internet companies were established in America.

Just in Silicon Valley alone accounted for two-thirds of them, and suddenly, entrepreneurs were as common as hairs on a cow.

In some outrageous cases, startups could get money from venture capital firms almost by just having a business development plan.

This was the most direct impact of Netscape’s successful listing, and the beginning of the internet wave.

Unlike the internet companies that sprung up like bamboo shoots after a rain, Microsoft only made a move a week after Netscape’s listing.

Firstly, its official spokesperson formally announced the different versions of Windows95 and their differences.

Among these, the Plus package description importantly included the word "Internet Components."

Ordinary people might have been confused by this, but for Dean and others, it was not such a difficult puzzle.

If they guessed correctly, the so-called Internet Components were probably Microsoft’s own browser.

In Gates’ understanding, a browser was an interface to the network, calling it "an internet component" was not an exaggeration.

However, for marketing effects, Microsoft deliberately maintained a sense of mystery, and detailed pricing information would probably only be revealed at the launch.

Of course, because of the blanket advertising during this period, Windows95 hardly lacked attention.

Even if Microsoft blurred the details in its explanations, it couldn’t fool the keen-nosed professional media.

Thus, it was no secret that Microsoft would soon introduce a browser in its new system platform.

However, the outside world including Wall Street wasn’t optimistic about Microsoft’s move because Netscape Navigator had already occupied more than 90% of the market.

Taking market share from a company that had achieved monopoly was no easy task.

Moreover, Netscape had just gone public, and it was at its zenith.

Although Microsoft was a giant, this did not mean it would succeed in the browser market.

While the media buzzed, they also waited to see this most famous operating system in history to judge for themselves.

Meanwhile, some also turned their attention towards Netscape to see how it would react.

Nevertheless, all was quiet at Netscape, their only action being the announcement that the JavaScript programming language would be freely available to all developers.

Yes, all of them, including corporate users.

This advanced programming language could achieve various complex functions on web pages, including dynamic content display, user interaction experience, data processing and computation, and network requests and data interactions.

Specifically, it could manage dynamic content updates, control multimedia, animate images, and nearly everything else.

It was powerful, and it was magical.

In fact, long before Netscape announced this news, many individual developers had already been using this language.

Now that Netscape officially made it free, it would undoubtedly attract more developers to join the construction of JavaScript.

Dean and others did this, of course, to attract developers to their platform.

In addition, another reason was that Netscape had submitted a draft standard for JavaScript to the European Computer Association.

It would become a standard computer language, circulating internationally and used by more developers.

This was part of establishing rules, high-end business competition wasn’t just about price wars or flying in cheap airlines.

To turn their draft into an international standard, the prerequisites included no involvement in patent disputes and low licensing fees.

According to industry standards, this licensing fee was generally around a thousand US Dollars, nearly never a barrier.

Thus, they might as well offer it for free, as Netscape did not lack the licensing revenue.

And free licensing was also more likely to attract the favor of international organizations.

This was Netscape’s only major move for a while; it almost made no splash among the general public, but it had a profound impact within the developer community.

Do you think it was all over? To prepare for Microsoft’s entry, the source code there coordinated well with Netscape.

It also opened up its JSP language environment for free to individual developers, whereas enterprise users had to sign free usage terms.

The JSP language was mainly used on the server side, and it was very significant for internet enterprise users.

This language could help internet companies deploy Java-written programs on browsers.

For instance, games and animations based on Java could all run in web pages.

With a JavaScript and a JSP, they could already constitute the entire internet environment from the server side to the client side.

This was the strategy that Netscape used in the first round of its battle with Microsoft.

It had to move quickly, with the aim to capture the standard-setting rules in the industry before Microsoft could enter this field.

Facing Netscape’s strategy, Microsoft had no reaction for the time being.

The time was already late August, and the launch of Windows 95 was imminent.

Dealers around the world had already begun unpacking copies of this new system and arranging their displays.

Some large shopping malls, two days before the launch, began their respective warm-up activities.

The entire industry seemed to know that this Windows 95 was out of the ordinary.

And just on the eve of this historic moment, Dean had to worry about other matters.

...

The Netscape IPO completely ignited the internet fire in Silicon Valley.

Yahoo became very popular, as did several of its competitors.

However, an unspoken secret was that apart from creating an internet brand, Yahoo had no other options.

Because it wasn’t a technical company, it had no patents and not much of an advantage in engineering.

Its directory was put together by browsing web pages and categorizing websites, with most of the work done manually.

Although Dean provided them with an early search engine, it was only used as a screening tool.

In terms of real algorithmic research and development, Yahoo had hardly made any significant progress, as neither of its founders were adept in this area.

From the DNA of the company, Yahoo was not equipped to become a technology-oriented company.

Without a technological moat to protect it from competitors’ attacks, this meant Yahoo faced huge market risks.

More importantly, the logic of the business field Yahoo was in was "winner takes all," meaning internet users tended to use a single method to search for information online, thus the competition was fierce.

The winner would take the largest share of online advertising revenue, while others would get only crumbs.

For that reason, Yahoo couldn’t act like a traditional tech company.

It couldn’t simply invent a product, promote it, and then rely on technological innovation to bring in sales and profits.

Instead, it had to maintain a more active stance than its competitors, which meant it had to create an atmosphere of strong momentum.

So a dangerous logic emerged: the key to Yahoo’s growth was that it had to keep growing!

Its early advertising expenses did not translate into profits. To continue expanding the business, every dollar of advertising revenue had to be reinvested in marketing expenditures.

Simply put, it was about burning money, constantly burning more and more money.

Thus, after receiving its first financing last year, Yahoo ran out of money before the year ended.

Traditional venture capitalists could see that Yahoo was a money-burning business, and under normal circumstances, they might refuse to invest any further.

But the Netscape IPO changed the game rules.

The traditional thinking was outdated—it revealed a rule of the internet.

That is, when you have exponential user growth, the returns that follow are astronomically exaggerated!

Not to bet everything on them would be insane, and venture capitalists turned from shrewd to irrational, just one IPO of Netscape away.

In this context, a nonconformist investor noticed Yahoo.

His name was Sun Zhengyi, short in stature, and looked like an entrepreneur.

He rose to fame through SoftBank Group and was dubbed "Neon’s Bill Gates."

However, unlike Gates, who came from an elite background, Sun Zhengyi was an extreme example of a self-made man.

His family was a marginalized Korean clan in Neon, and his childhood home was a shack near the railway, where he lived with his six siblings.

Despite how his unfortunate childhood contributed to his legend, it also became his burden.

His father, to cover up their Korean clan identity, gave him the surname "Yasumoto."

This shame forced him at 16 to leave home for California, saying, "I will reclaim my surname to prove that everyone is equal."

This was his vow when he left home, and because of this deeply ingrained "outsider complex," he developed an extraordinary investment style.

He invested like a desperado risking everything, even though his wealth had long surpassed most people.

This fall, he returned to California and heard the whisper of the "internet gold rush."

With his keen intuition, he immediately noticed Yahoo at the center of the buzz and looked at it like a hunter spotting his prey.