Web Master - CNET

September 6, 1996, Marc Andreessen

Web Master
By Margie Wylie, Nick Wingfield, and Jai Singh
Staff Writers, CNET NEWS.COM
If you're looking for someone to blame the Web on, Marc Andreessen is your guy.
Wondering why software releases are now weeks rather than months apart? It'sa phenomenon called Web Weeks and, yes, it's the chubby, baby-faced24-year-old multimillionaire's fault. Add it to a long list of ways in whichthe Web haschanged our lives, from Web addresses on billboards to talk of online
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addiction. Andreessen will tell you he was just in the right place at theright time when as a college student in Illinois he wrote Mosaic, one of the first graphical Web browsers. Talking to him, you get the feeling that he trippedand accidentally founded Netscape with Silicon Graphics veteran JimClark. Don't believe it.
Andreessen has, if only temporarily, conquered the Web. About 85 percent ofall browsers in use are made by Netscape. That's gotten the attention ofMicrosoft, which now plans to build Web browsing into Windows, a move thatcould destroy Netscape in the consumer market. Andreessen's response? Goafter the business market. Andreessen has been exhorting businesses to throwaway Lotus Notes and other "closed" business information systems and move tothe "open" Web. The intranet is born and the idea of "extranets" areincubating in Andreessen's mind. We'll see just how lucky he is.
NEWS.COM: Are you at all surprised by the kinds of business and culturalchanges you have set off through development of Mosaic?
Andreessen: I laugh every time I open the morning newspaper and half thearticles are about the Internet or something on the Internet. The San Francisco Examiner recently rana big article on Stale, thisparody ofSlate. Here's an article in anewspaperabout a Web site. It's like just a totally normal thing these days.
I've been waiting for three years now for the level of interest to crest andit hasn't. I get the feeling increasingly that we're at the very beginningof a very long-term ramp up. This is just the start. And so I think thechanges over the next five or ten years are really going to be profound, andwe're only starting to see some of them.
NEXT: Politics

Stats

Age: 24

Net worth: $70 million

Claims to fame: Wrote Mosaic, the first commercially successful graphical Web browser
Founded Netscape

September 6, 1996, Marc Andreessen

Politics
You say profound changes are still to come. What are a couple ofthings that pop into your head?
Politics. By 1998 or '99, most political discussion in thecountry will be on the Internet.
If you figure 40 or 50 percent of the population votes, out of that todaymaybe 30 percent of them are online. In another year, 80 percent of themwill be online. And the resource for most of the information they use andmost of the debate they engage in is going to be, I think, Internet-based.Along with that, the issues around the Internet, like regulation andcryptography and all the rest, are going to increasingly influence politics.
If that is the case, do you think that Silicon Valley takes on abigger role in the shaping of legislative issues regarding the wholecomputing and Internet world?
I think that happens because the technology world is becomingmore important to the rest of the world overall, which seems to be happeningnow with issues like crypto and the Communications Decency Act and a lot ofissues around the Internet.

Does Netscape support a PAC, support certain candidates? Does itpoll resources?
We belong to industry associations that have lobbying effortsunder way. We also have a person in our legal department who is our publicpolicy counsel who spends most of his time in Washington. Increasingly,there's actually the risk that a bill could get passed that would hold usliable for things like content. That's just insane, but the politiciansdon't know that half the time. Content providers are worried enough nowabout copyright infringement that they would like to hold software providersin some cases liable for enabling the copyright infringement. And then thereare issues that directly affect our business, like [the inability to export]encryption. Netscape is losing $20 million to $40 million revenue this yearbecause of this. The problem exists with or without us. So we have to get in themiddle of issues like that.

What other issues do you think besides politics are on the horizon?
The arrival of the Internet and intranet is forcing a transitionin how businesses treat technology. For the last 35 or 40 years, mostcomputers were used to automate processes that already existed inside ofbusinesses. But now computers are increasingly being used to create newprocesses that are centered around the computers themselves that thecomputers made possible. You can build an intranet now that seamlessly tiestogether your internal company and its culture and its employees andseamlessly extend that out to your partners and your suppliers and yourcustomers. That means that the businesses that do (build intranets) havesignificant advantages over businesses that don't.

Are most companies switching over to the concept of theintranet, or are you enlarging the market?
A little of both. We tend to get a lot of business for thingslike information sharing or database access or collaboration. We're alsogetting a good share of the email business. So a lot of it is new customers,but a lot of it's business that would have gone to Notes two years ago. Ourbusiness is to sell this type of software to companies, and there's sort of athree-way race between Microsoft, Netscape, and Lotus.

You mentioned culture being an issue. Is that an obstacle you findwith corporations already working with legacy applications who will have adifficult time of transitioning?
The specific area where there is sometimes some resistance is inpeople who have made a political commitment or they've bet their careers onsome technology. Many of them decided on Exchange two years ago, and nowthey're finally getting to the point where they can roll it out, except itlooks like now it's obsolete. So they've got a problem on their hands towork through that. The same thing for Notes. That's the major barrier.

How is Netscape as a company dealing with these two differentmarket segments: the corporate intranet and the Internet?
The Internet is 80 percent or more of our business. So most ofour product development, most of our features in Navigator, and all the restof it are geared to the Internet. The crossover point for us that's reallyimportant is a company like FedEx that wants to take its order managementsystem or its package tracking system and make that accessible to Internetusers. There's a lot of money there. There's a lot of IS budgets that areallocated to do this stuff. The Internet's basis of revenue is notsignificant, so it's less important. On the Internet side it's tougher tojustify that level of spending on investment because the business models arenot there. The Internet content business so far has proven to be prettytough. There's not a broad base of successful business enterprises yet.Increasingly, a large part of our business will be what we call extranets,which is companies linking up to other companies. They may or may not usethe Internet as the transport. They may have a private IP network as thetransport, but it shares many of the same characteristics as the Internet.

But in that scenario, Internet users don't get those kinds ofapplications or features because you're concentrating more on the businessside of things. Do you see a scenario like that unfolding?
Well, they'll get what they pay for. Everybody else ultimatelygets what they pay for.

NEXT: Network computers

September 6, 1996, Marc Andreessen

Network computers
Can you clarify Netscape's position on Network Computers?
We're going to have a way to take Navigator onto basically allnon-PC devices. And that should be probably within the next few weeks. We'lltalk in more detail about how that works. But the upshot is we're going totry to get Navigator running everywhere, and we're not going to do all thatwork ourselves. We've got some partnerships.
"Everywhere" meaning standard?
NCs, PDAs (personal digital assistants), video game boxes,interactive things like the different 32- and 64-bit video game platforms are really good for this.
There will be a Navigator-branded product on a PDA; it may not include all the functionality. There are very real hardware limitations on some of these devices, but Moore's Law is on ourside, so over time you'll get more and more.
So you're bullish on...
Yeah, bullish on the concept of non-PC devices that connect tothe Internet and are useful. And especially there's two things that aregoing to be big wins here. One is the things will be free because they canbe subsidized by service providers. So the cost isn't going to be $500. Thecost is going to be zero dollars.
But who is really committed to that?
All of the ISPs and online services have established a modelfrom which they're willing to spend to get a customer. The question iswhether it's $40 or $200 that a customer is worth. It's like cellularphones. One thing that's true about PCs is that they are hellaciouslycomplex to run and support. Gartner Group said that PCs cost $8,000 to$15,000 a year to support. So if you have what I call the "zero admin client"where you just turn it on and it works, there is a segment of the marketthat's going to like that a lot.
Are information services managers going to be that keen about zeroadmin clients?
When we talk to CIOs about it, sort of the Fortune 100-levelcompanies, if they had a box in their hands and it worked, they'd roll it out.
What's the future of Navigator?
More and more of the things that people do on the network canjust happen inside Navigator. We're going to expand Navigator to be adesktop, and that will work with all these different platforms exactly in thesame way. It will take over the screen if you want. You could even replacethe Windows start-up screen. Navigator will be able to take over the wholedesktop. In fact, you'll be able to boot directly into it.
As far as size and complexity goes, more and more of it's going to bedownloaded on the fly. Navigator is turning more and more into asubscription-based service. You're going to subscribe to Navigator andyour subscription may actually be subsidized by content providers oradvertisers or whatever. But you'll subscribe to the Navigator and in themiddle of the night, a new module will get downloaded and then you'll getasked the next morning, "Would you like to install this?" If you click yes,boom, it will be right there. If you click no, it will be erased from yoursystem. With Java, we can do all that safely and do it broadly and acrossplatforms.
It seems like it's the same thinking that's motivating IE 4.0.
The difference is we don't have to run the OS. There's pros andcons on both sides. There's a certain advantage to owning the OS; there's acertain advantage to not having to worry about an operating system revenue.So people will get to choose.
There are an increasing number of users who are spending more and more oftheir day in the Navigator. What do you do on a PC? You do email, you surfthe Web, and if you're creating documents or content you're probably creatingthem in space to post online. Navigator does that. So the stuff that youneed to do that's not in Navigator right now is like manage your localfiles. Maybe run spreadsheets. That's about it.
In what time frame do you foresee this happening?
Six to 12 months.
Do you feel like the pace forces you to make decisions you'drather not make?
No, well the pace forces people to make decisions period. CNEThas the option, for example, to wait for ActiveX or wait for the next greatauthoring tool, whatever it is. You can't, you don't. You'll be creamed byyour competitors if you do.
Most companies, a lot of internal corporate IS people, are under the gun todeliver stuff right now, and they can't wait. So I think the pace hasaccelerated permanently. These technologies are only feeding it. But it'sthe way things always would have been done. We're only able to move as fastas we are because we're benefiting from a lot of stuff that's happened inthe last 10 or 15 years. There are ways to communicate extremely effectivelywith the press just through email. Software distribution: It's justpainless and transparent now. That's never been the case before. Thefeedback from customers is instantaneous. Sales channels: We were able toget Navigator Personal Edition into 80,000 stores in a matter of a few weeksbecause the distribution channels are there that weren't there 10 years ago.
NEXT: Netscape vs. Microsoft

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September 6, 1996, Marc Andreessen

Netscape vs. Microsoft
Microsoft has so many resources, it's easy for them to amplifytheir message. Has it become more difficult for you to articulate your message?
It hasn't gotten more difficult to articulate; it's gotten moredifficult to broadcast it. And the reason is we're dealing with a companythat has 1,000 working on PR in the Internet space and we have 300people working with standards bodies. They have 2,000 or 3,000 marketingpeople ... some ungodly number like this, in the developer organization.That's where the resource differential comes in. I think we may still havemore programmers on it than they do. But on the marketing side, there's noquestion theirs is an enormous marketing machine.
Do you think it would take a decree from the Department of Justiceto stop Microsoft, or pure competitive forces in the marketplace can determine what will happen?
On the DOJ thing, there's a fairly straightforward set of rulesfor the ways that different companies, including those of monopolies, cancompete: They're either legal or not. So those are sort of a separate setof issues. But more broadly, we think we've got a pretty decent story, got apretty decent appeal. In many cases, it's different than Microsoft's. Sowe're just going to keep on going.
Microsoft has been good at freezing the market with vaporwareannouncements.
Sure. They've been good at freezing traditional markets. Theyhaven't been so good at freezing the Internet yet.

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