nestel harward case study Essay

4375 Words Nov 3rd, 2013 18 Pages
Harvard Business School

9-296-088
Rev. May 16, 1997

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Netscape's Initial Public Offering

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August 8, 1995 had taken an unexpected turn for Netscape Communications Corporation’s board of directors. Earlier that morning, the day before the company’s scheduled initial public offering (IPO), Netscape’s lead underwriters proposed to the board a 100% increase in the original offering price from $14 to $28 per share. This recommendation came in response to the remarkable oversubscription for Netscape’s shares, which had already prompted the underwriters to increase the number of shares to be offered from 3.5 million to 5 million. Under the current proposal, a company with a net book value of just over $16 million that had
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The Internet was a global network designed to facilitate communication between some
35,000 computer networks using the enabling code termed Internet Protocol. According to
International Data Corporation (IDC), in mid-1995 there were approximately 57 million Internet users. Of those 57 million users, IDC estimated that approximately 8 million were accessing information on the World Wide Web.

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Engineered in the early 1990s, the Web was a technology that linked one bit of information on the Internet with another so that users could share “webs” of ideas. The Web consisted of a network of Web servers that posted information in a common format described by the Hypertext Markup
Language (“HTML”). Internet users were able to access information on the Web by implementing the appropriate Hypertext Transfer Protocol (“HTTP”). Because it necessitated complex coding, the Web had remained largely undiscovered by nontechnical users who simply wanted to browse, a popular pastime which came to be dubbed “surfing the Net.”

1Bundled packages of Netscape Navigator and Netscape Commerce Server accounted for about 10% of total

revenues in the first quarter, while its contribution in the second quarter was immaterial.
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Netscape's Initial Public Offering

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Netscape’s Entrance

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Meanwhile at the University of Illinois at Urbana-Champaign, a group of computer science students working at the National Center for Supercomputing Applications

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