What Netscape/AOL Means to You & Me

Alright, now that everyone has settled down from the announcement of AOL's rescue of Netscape, I think we should all unbuckle those belts, sit back in the easy chair and ruminate over exactly what something like this really means to people like you and me.

Just think about it: Less than two oil changes ago, Netscape was one of the hottest internet-based companies, the darling of Wall Street. Today, it lies flat on its back, gasping for oxygen -- and still ranks as one of the ten most successful IPO's in stock market history.

What's wrong with this picture? Anybody? Anybody? Bueller? Okay, since nobody else is piping up, let me offer my two cents' worth. And pay attention, because if you're not careful, you could suffer the very same humiliation as our browser friends now must endure.

How, exactly, does a Wall Street winner go from champ to chump in less time than it takes to stir up a really bad cup of instant coffee? Pretty much like this:

You start with practically 90% of the market and then ignore everything else.

Yup. It's that simple. Netscape had a death grip on the market and they let it slip away. Not because of inferior technology. Not because of under funding. They lost their grip because of the most common startup affliction of all: myopia. What Netscape should have been doing from Day One was building their defenses against the Microsoft machine, which anyone with a half-active brain could have seen coming. Netscape should have built stronger marketing alliances and integrated relationships with a strategically-chosen team of partners so that Windows users would have had to do some serious thinking before switching over to Internet Explorer.

But they didn't. And the result was that zillions of Microsoft users said, "What's the difference?" and switched to a browser that came with a marketing strategy built right in.

Netscape's biggest mistake was not establishing programs. They never built a true brand that inspired user loyalty (and rabid anti-Microsoft Mac users don't count, because we'd use anything other than Microsoft if we could help it).

So what can we really learn from the Netscape/AOL issue? Well, a couple of things: First, it's always better to establish a beach head than to run for cover. And it's easier to build that strength BEFORE you go out and market yourself to the world. Second, no matter what you build, if you haven't built in brand strategy, you can lose it all in a heartbeat. And third, a really good spin doctor is worth his weight in gold.

Rob Frankel