Weaving the World Wide Web - The Computing Universe: A Journey through a Revolution - page 230

The first commercial Internet domain name, symbolics.com, was reg-
istered in March 1985 by Symbolics, Inc., a computer systems company in
Massachusetts. By 1992, fewer than fifteen thousand .com domains had been
registered. All this changed in August 1995 when Netscape made an initial pub-
lic offering (IPO) on the stock market. From an initial stock price of $28 per
share, the shares jumped to a peak of $75 on the first day of trading. Netscape
was now a company valued at more than $3 billion even though it had yet to
generate a profit. Sales for its Netscape Navigator browser were small but grow-
ing rapidly each quarter. By the end of 1995, the share price had risen to $175
per share and investors were looking for other .com Internet companies that
could show similarly spectacular growth.
One of the earliest and most enduring of the “dot-com” businesses is the
online retailer Amazon ( Fig. 11.16 ). Its founder, Jeff Bezos ( B.11.8 ), was an
investment analyst in New York when he saw a report in May 1994 describing
the explosive growth of the World Wide Web. He recognized the potential of
the web for online retailing and decided that selling topics online would have
a much lower overhead than traditional bricks-and-mortar bookstores. He left
his job in Manhattan, moved to Seattle, and established Amazon in July 1994.
When Netscape's IPO started the rush to invest in “dot-coms,” Internet
start-ups sprung up offering everything from airline tickets and hotel rooms,
such as Lastminute.com , to selling pet supplies, such as Pets.com . Throughout the
second half of the 1990s, the dot-com bubble grew. A wave of investor enthu-
siasm pushed the stock value of Internet companies to greater and greater
heights although most of the companies had not yet made any money. These
new companies seemingly made a virtue of not having a conventional business
plan showing a plausible path to a profitable future! A small group of financial
analysts specializing in high-technology companies fueled the dot-com buying
frenzy. Having seen the spectacular rise of Netscape, these Internet analysts
talked up the value of these dot-com companies to unrealistic values as com-
pared to traditional bricks-and-mortar companies. In February 2000, the inevi-
table happened: reality returned to the stock market and the shares of dot-com
companies went into free fall. Amazon shares, for example, which had reached
$600 per share in 1999, fell to less than $10 by the end of 2001.
Many of the dot-com companies disappeared without a trace, but Amazon
continued to grow its business and reported a profit by the end of 2002, only one
year later than Bezos's original business plan had predicted. What of Netscape, the
company that started the boom? Their dominant market share collapsed dramat-
ically when Microsoft Corporation woke up to the potential - and threat - offered
by the Internet and the web.
The story of Microsoft's conversion to embracing the web and the
Internet is long and complicated. One beginning was in September
1991 with the recruitment of James Allard, known within Microsoft as
“J Allard.” Allard came from a Unix background and believed in the value of
open Application Programming Interfaces (APIs). An API is a description of exactly
how one program needs to ask another software program to perform a specific
service. An open API is just an interface whose specification is freely available
to the public so that any user can develop applications and services for a par-
ticular software program. It was clear to Allard that Microsoft urgently needed

Fig. 11.14. First release of Netscape
Navigator browser in 1994.

Fig. 11.15. The ICANN is a nonprofit
organization responsible for assigning
top-level Internet domain names.

B.11.7. The first CEO of Netscape Jim
Barksdale (left) and the two found-
ers, Marc Andreessen and Jim Clark.