Wired on Friday/ Danny O'Brien: It was 10 years ago this week that Netscape toasted its Initial Public Offering (IPO), on August 9th, 1995. I remember the day quite clearly. I was sitting in the office of an aspiring young British media tycoon: all fast talk, business plans and cell phone chatter.
The IPO came up as a side item on the radio news. He was dumbstruck. We'd been talking about the internet; I had been boring him about its potential. "Did you know about this?" he asked me, as the news report described the newly minted millionaires, still working at a company that had yet to turn a profit. I confessed that I'd sort of heard about it, but I hadn't really given it much thought. He practically throttled me. "Why. Didn't. You. Get. Me. In. On. This?" he said, each word an accusation in itself.
And so the decade went. Everyone looking at the last deal, and wondering how to get into the next one: the very definition of a speculative boom.
Jim Clark, the co-founder of Netscape, agreed to push the company to go public when it was only 16 months old, saying that the IPO was a "marketing event". And that, of course, is the perennial criticism of the boom: that it was hype without substance. Netscape, a company built literally on giving away its main product, was barely anything when it became a billion dollar company, and vanished to nothing when it was bought by AOL a few years later.
Netscape was an incredibly hyped company, long before its IPO. Indeed its fame, in a way, made IPOs themselves famous. Before then, the Silicon Valley tradition of going public was anything but public; it was a party for institutional investors and the venture capitalists who had shored up the early days of a small company. It wasn't meant to be for a wider public.
And despite the promises of riches that drew in most of the world, it never really was. The real money, at least by common understanding, was made by those who had share options before the public offering, who could catch the early rise in prices on the day of the sale. Everything else was just smaller fools looking for bigger fools.
But what changed with Netscape was the almost endless vistas of bigger fools that emerged in the following years. When Clark and the 23-year-old browser programmer Mark Andreessen toured the US in the "pony show" of pre-offering publicity, they played to crowds. The crowds had heard about the internet; and more importantly, they'd heard of Netscape. You could hardly avoid it - the glowing N of the brand hovered above every page you clicked on during your first dial-up onto the net.
The net was something exciting, but not something you could really buy in on. Netscape, however: you get a chunk of that.
The next few years went by in, as they said at the time, Netscape Time. But the miracle was that there continued to be bigger fools. Where did they come from? From the fast increasing (although not as fast as everyone thought) internet audience.
The reason why I had no interest in the Netscape offering - although presumably I had some dim understanding that it was possible to make money from it - was that I really had no idea of how to buy a share. For that, I'd need a broker. And, moreover, a broker who somehow would know how to play the American stocks - including the upstart electronic trading market called Nasdaq. I wasn't a financial whizz. Who knew any kind of broker, let alone one who would call in transatlantic trades?
A few years later the world had changed, thanks to the internet that had spread the news of Netscape's existence. Individuals with a credit card could buy shares without any greater hurdle than the subscription forms on sites like E*Trade.
And while the outer waves of the net washed slowly over the first day's trading, the centre of it was caught up in the world of instant day-trading; buying and selling on the penny and cent changes over the very short-term. Day-trading outside the support and the training and the sheer volume of the stock market floor itself is another mug's game. But before the net, nobody could even get a place at the roulette wheel.
Day-trading and hitching a ride on IPOs were both speculative ventures, riding the froth caused by a churning upward market. But their very existence as options available to everyone showed the change the net was making in liberalising and liquidifying markets.
It's perhaps dangerous to justify hype in terms of itself. That is, after all, how hysteria establishes itself. But, 10 years on, with the high tide of internet money long behind us, it's worth noting what is left.
Netscape is a shadow of itself; but the browser that delivered its brand so effectively to millions still does the same thing, with billions of dollars of profit to advertisers and those who broker those advertisements.
The interest in IPOs has waned, but fast, unmediated access to international markets has not (who had ever considered ordering from abroad until Amazon and eBay?). And while the pyramid scheme of bigger fools buying more and more crazily priced stocks is no longer tenable, that audience of now wiser consumers is still out there. Human nature being what it is, there will be another boom along in a year or two. We may well see this one, from beginning to end, run on Netscape Time - or faster.
