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Apr-25-2008Andreessen: Mosaic Expectations Were Very Low(topic overview)
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It's almost as shocking as if Al Gore were to endorse Barack Obama: Marc Andreessen, who helped create the first Web browser and jump-started the Internet economy--and who ultimately saw his company decimated by Microsoft --thinks the Microsoft acquisition of Yahoo! would be "a really good deal." "The combined company will be really successful," he said. Andreessen made his remarks on Thursday morning at the Web 2.0 Expo. These days he runs the social-networking platform company, Ning, which recently closed a fourth round of funding at $60 million and is valued at $500 million, according to VentureBeat. A meta network, Ning allows its users to create their own social networks based on a topic or geographical location. Its users have created 250,000 networks, of which 70% are genuinely active. [1] After lobbing some introductory softballs, Web 2.0 Expo keynote host Battelle asked Andreessen to talk about how Microsoft essentially borrowed Andreessen's concept of the Mosaic Internet browser, packaged it and made it an industry standard. Andreessen, who created Netscape Communications and Opsware before creating social platform provider Ning, reminded the audience that Microsoft engineers took the code he wrote at the University of Illinois to build Internet Explorer, which Microsoft eventually packaged on PCs all over the world. "It was very exciting," Andreessen noted drolly, drawing chuckles from the crowd. He also said he didn't panic when Microsoft entered the market. Netscape made him a multimillionaire, selling more ad revenue than all the Internet portals and search engines combined by 1997 or 1998. "No. I think that they've got a very important role to play," Andreessen said, pointing to Microsoft's Live Mesh strategy of synchronizing all computing devices via the Internet as an example. The caveat is that the Internet landscape has splintered in a positive way and that there are more counterweights opposing Microsoft, chiefly, Google, he said.[2] Battelle revisited Andreessen's pioneering role in the creation of the Mosaic Web browser, which spawned Netscape and Firefox and made Web 2.0 possible, as if to reminisce about the good times before pondering the browser's demise. "Does it disappear over time?" he asked. Andreessen said he had always assumed the browser was a halfway step and that it would just melt away. "The surprising thing has been the persistence of the browser as a distinct piece of software," he said, adding that more and more services, like instant messaging, appear to be moving into the browser. There is of course no shortage of companies that would like to see the browser fade away so they could become more effective gatekeepers and reap the potential revenue that comes from being a gatekeeper. This desire explains the appeal of rich Internet applications, such as those developed with Adobe AIR, which gives application developers more control over customers. Though Andreessen expressed surprise that the browser has lasted so long, he also appears to be aware of why the browser has lasted. Responding to Battelle's efforts to goad him to take a shot at Microsoft, his old adversary, Andreessen responded with praise for his nemesis during the nineties.[3]
"We had extremely low expectations. Then of course it took off," Andreessen reminisced during a keynote session Thursday at Web 2.0 Expo in San Francisco during which he was interviewed on stage by John Battelle, chairman of Federated Media. Of course, by the time he co-founded Netscape in 1994, Andreessen understood the potential of the Web browser, although he was in a minority among the skeptics in the industry and the media, he said. Even today, when the Web is so widely considered a crucial element across most industries, it's interesting to find resistance to it and lack of understanding about how to leverage it, he said, citing media and telecommunication companies as examples.[4] Marc Andreessen, Tim O'Reilly, and other leaders muse on the future of the Web browser, social networking, widgets, and the Web 2.0 movement itself. At the Web 2.0 Expo in San Francisco on Thursday morning, as he prepared to interview Marc Andreessen, co-founder of social networking platform Ning, John Battelle, chairman and CEO of Federated Media Publishing, articulated the conference's collective angst about the Web 2.0 movement's future.[3]
A Microsoft Corp. takeover of Yahoo Inc. would be a sad end for the Sunnyvale Web portal, given its iconic role in Silicon Valley, Internet industry pioneer Marc Andreessen said Thursday. "It's always a little bit sad, the prospect of an entrepreneurial company, especially one that has had that success over the years, not being independent," he said on stage at the Web 2.0 Expo, a conference held this week in San Francisco.[5] SAN FRANCISCO--"It turns out that the Internet has worked pretty well," industry mainstay Marc Andreessen told an audience at the Web 2.0 Expo here Thursday morning.[6]
The Web entrepreneur won't be goaded into trashing Microsoft, the firm that crushed his Netscape and is now targeting former industry darling Yahoo. SAN FRANCISCO'Try as he might, John Battelle could not push Ning co-founder Marc Andreessen to take the bait.[2] Federated Media founder John Battelle, who moderated the conversation, nudged Andreessen to comment on Microsoft (nasdaq: MSFT - news - people ). "Bill Gates made an unbelievable contribution to the industry," says Andreessen, even as he took a jab at Microsoft for "borrowing" bits of Mosaic's source code for Internet Explorer. "It's hard to even conceive what this industry would be like if Microsoft hadn't developed a standard operating system. I don't know if the Internet in its current form would have happened." Too bad Battelle didn't ask Andreessen if he had shared his thoughts with Yahoo!'s (nasdaq: YHOO - news - people ) Jerry Yang.[1] Asked by Battelle and later by an audience member to comment about competing against Microsoft and Bill Gates, Andreessen had no fighting words, despite the historic conflict between Microsoft and Netscape and the ensuing U.S. Department of Justice antitrust probe. He said the IT industry wouldn't have experienced nearly as much growth as it has if Microsoft hadn't provided a standard operating system for PCs. He also praised recent moves by Microsoft to become more open in its technology. While it would be sad, from an entrepreneur's point of view, to see Yahoo lose its independence to Microsoft, such a merger could yield positive results for the companies, he said. Despite the potential for such a mega-merger, the competitive landscape in the computer industry is healthy, having "splintered and fragmented in very positive ways" in recent years, he said.[4]
Andreessen's current project, Ning, couldn't be less renegade. The slick dot-com, which taps into the social-media craze by letting members build their own social networks without requiring technical expertise, has been fueled not only by Andreessen's Valley cred but also by a sky-high valuation and a recent $60 million funding round that the exec famously said was for an economic "nuclear winter." "I have no idea what's really going to happen," Andreessen said when Battelle asked him about the "nuclear" comment. "There's this huge irony for our industry. we got blamed for a lot of the last crash. We are the most remote uncorrelated part to this crash that's happening because tech may have lots of issues but we tend to not have a lot of debt and this is all about debt and credit. Regardless, Andreesen seems to think his own company's well-prepared. He proudly touted some Ning statistics: more than 250,000 individual social networks have been created, 75 percent of which are active.[6] Andreessen recently raised $60 million for Ning, giving the company (which lets people build their own social networks) a valuation of over $500 million.[7]
Looking back, even Andreessen is surprised at the longevity and increasing impact of browsers on the Internet. "It turned out far better than anyone could have thought," he said. Even elements that he thought would be quickly discarded as development progressed, like JavaScript, cookies and the back/forward buttons, have withstood the test of time, he said. Far from nearing retirement, the browser is increasingly at the center of Web innovation, as more and more applications and services are built to be delivered via browsers, he said. One clear example is social networking, which is, of course, browser-based and has displaced applications like instant messaging as the preferred communication method for young people, he said. Perhaps unsurprisingly, Andreessen's latest venture, founded in 2004, is Ning, which provides a platform for anyone to create their own social network.[4] In the early days of Mosaic, the browser created by Andreessen that eventually evolved into Netscape and then Mozilla and then Firefox, "the conventional wisdom in the business world and in large parts of the press was that interactive television was going to be the future. the Internet, really, at the time, and the Web and Mosaic were really sort of renegade academic research projects."[6] Mosaic, as it was then called, opened up the Web to the public, and it eventually morphed into Netscape Navigator, then Mozilla and now Firefox. At the time, Andreessen had no idea the Internet would be big, he explained to the early-morning crowd that gathered at San Francisco's Moscone Center.[1]
Marc Andreessen had no idea that the Mosaic browser he co-developed would kick off the Web revolution and become such an enduring and important piece of software.[4]
On Wednesday, while interviewing Slide CEO and founder Max Levchin, Forrester analyst Charlene Li asked whether widgets were a fad. Levchin at least mustered a spirited defense, saying, "No. It's the only thing that's going to prevent today's social networks from becoming fads." Such doubt about the continued vitality of the Web 2.0 meme and movement can be attributed partly to uncertainty about the future of the Web browser, now that other devices are eclipsing the PC in terms of industry focus.[3] Someday, a better standard platform for information retrieval may emerge. Since no one really know when that might be, it's probably safe to say that the Web browser, and by extension the precepts of Web 2.0, have years if not decades of life left.[3]
"If the deal goes through I think it will actually be a really good deal. I think they'll get a lot out of it," he said. He added that he'd be a bit sad for Yahoo. "It's always a little bit sad, the prospect of an entrepreneurial company, especially one that's had that kind of success over the years, not being independent. Over time these things are part of the natural evolution." The media business hasn't figured out that direction yet, in his view. [6] Andreessen said the deal, currently worth about $43 billion, would be a good one for Microsoft if it goes through. He also said the prospect of a formerly successful entrepreneurial company getting acquired is a "little bit sad," but allowed that it's part of the natural evolution of business.[2]
Andreessen voiced support for the merger, saying that if it goes through, "I think it will actually be a good deal." He also noted that both Yahoo and Microsoft could take steps to boost their businesses as separate companies without offering specifics. Yahoo is embroiled in a three-month merger standoff with Microsoft, which hopes that combining forces will help bolster its online advertising and create a more formidable challenger to mutual rival Google Inc. But Yahoo's board has so far rebuffed the advances, saying that the deal - currently valued at around $43 billion - substantially undervalues their company.[5]
The landscape is splintered and diverse. He thinks the Yahoo deal would add a lot to Microsoft and both would also be good separate. It's sad that Yahoo would go away but it is part of the natural evolution.[7]
Microsoft has set an April 26 deadline for Yahoo to come to the table to strike a deal. If Yahoo fails to comply, Microsoft may lower its bid and take it straight to shareholders, initiating a hostile takeover. As bleak as things look for Yahoo in its bid to remain independent, the future looks bright for Ning, Andreessen's latest baby.[2] If no deal is reached by Saturday, Microsoft has threatened to start a hostile bid by asking shareholders to replace Yahoo's board with a more merger-friendly slate of directors.[5]
Once again, Andreessen reminded Battelle and the audience that things tend to be unpredictable. Back in the early days, he said, "everybody told us there was no way to make money on the Internet." Battelle made sure he touched upon a particularly touchy subject for Andreessen: Microsoft. [6] Anyone hoping for nastiness would've been disappointed, though, as Andreessen's take on Microsoft was quite friendly. "It's hard to even conceive what this industry would be like if Microsoft hadn't standardized the operating system," he said. "Our view was, we adapt," Andreessen said when asked if he'd freaked out over the debut of Explorer.[6] Bill Gates, Andreessen said, "made an unbelievable contribution to the industry. It's hard to imagine what this industry would be like if Microsoft hadn't standardized the operating system[3]
There are more and more ad networks in all kinds of countries. Our approach is to slice and dice this." Regarding Bill Gates retiring from full-time work at Microsoft this summer, Andreessen said, "It's hard to sum up his contribution to the industry."[7]
Expect more to come, said Andreessen, who reports the network is growing 10% week-over-week. Its Andreessen's history as one of the original Netscape crew that underscores how the industry has changed from a ragtag group of entrepreneurs hoping the Internet would take off to a global advertising medium with annual revenues estimated to surpass $21 billion, according to the Interactive Advertising Bureau and PricewaterhouseCoopers.[1] Even the "back" and "forward" buttons on browsers and "bookmarks." "The surprising has been the persistence of the ideas and the persistence of the browser even as a separate piece of software," he said. Before Ning, Andreessen had founded Opsware, which makes it easier for corporations to run their computer networks. He scored again, after scoring with the Netscape IPO, when Hewlett-Packard agreed last year to buy Opsware for $1.6 billion.[7]
"The landscape in many ways has splintered and fragmented in a very positive way," said Andreessen, whose Netscape browser was crushed by Microsoft and has all but vanished.[5] Free browsers, fee-based versions, and web tools. It took off like a rocket, had a great initial public offering, and then Microsoft came into the browser market. Andreessen noted, "And they used my code from the University of Illinois." He got a laugh out of that.[7]
Marc Andreessen looks back and ahead at the Web 2.0 Expo. "It was a very confusing time," Andreessen said of the Net's early days.[6] SAN FRANCISCO--So there was Marc Andreessen, scaring the bejeesuz out of the crowd at the Web 2.0 Expo here with talk of a "nuclear winter" descending upon techdom.[8]
Andreessen's keynote interview with Federated Media chief John Battelle was somewhat of a history lesson into the distant past of the Web (you know, 15 years ago) followed by the requisite speculation about an uncertain future. [6] "The good news is the future for most forms of entertainment is now the Internet," Andreessen said. "By and large, the media companies are still unprepared, which is ironic given how much time they have had to prepare.[7] "All that hype was building." Andreessen said the push by telecoms to seize control of the interactive future was just "a big game" to juice their stock prices so they could then sell their companies. "The really revolutionary, profound things aren't recognized upfront--and we have a lot of reasons to believe that they're not going to succeed."[1]
Andreessen also issued an ominous warning about the sputtering economy and its impact on technology companies. Although the downturn started in the real estate and financial industries, he said, it could spread to Silicon Valley in what he described as a "vicious cycle" of declining consumer spending and corporate cutbacks. "On the one hand, all this happening in the economic climate doesn't have a lot to do with us," said Andreessen, whose current company is Ning, which enables users to build social-networking sites.[5]
Andreessen, who co-founded early dot-com phenom Netscape Communications, which was acquired by AOL in 1999, said change is part of the natural evolution in the industry. Companies rise and fall based on shifting opportunities, he said.[5] The mobile world, however, is structured much like the PC industry and that is holding the mobile industry back from explosive growth, Andreessen said.[7] Andreessen said one of the best places to invent is in a research lab at a university. It takes business know-how to make the transition to working in the tech industry. That's a wrap.[7]
Regarding Google's challenge to Facebook, OpenSocial, Andreessen said Facebook did an amazing thing of rolling out the social-networking platform for third-part applications to run it. We are at the early days of understanding the implications for advertising, he said. That spurred OpenSocial, he said. Facebook is getting more open about its platform, "and directionally that is the trend and so a lot of people like us will implement both OpenSocial and the Facebook platform," he said.[7] Andreessen said Microsoft is still very powerful but there are certainly a lot of "counterweights" to Microsoft. "There are new kinds of companies," he said.[7] Microsoft's once-dominant position is now countered to some extent by Google and others, Andreessen said.[5]
What might have been, Battelle asked? If there was one big surprise, Andreessen said, it was how many early ideas have lasted, like Javascript.[7] Battelle notes that Andreessen blogs and opines. He asked Andreessen to opine on Microsoft.[7]
We're in "a time we're all questioning whether or not we can sustain the momentum," Battelle said, an acknowledgment of doubt that might not be so noteworthy were it not echoed in other presentations. Tim O'Reilly, founder and CEO of O'Reilly Media and father of the Web 2.0 meme, posed a similar question at his conference keynote on Wednesday: "Do you really think we're done yet?" he asked.[3] CNET News.com's Caroline McCarthy is a downtown Manhattanite who believes that, despite popular opinion, the Web can actually help your social life. She's happily addicted to fun social media tools from Twitter to Yelp to Facebook, sends an inordinate number of text messages, and has a tendency to waste time at the office reading restaurant blogs. She explores all facets of the Web's gregarious side, as well as the unique tech culture in her home city of New York. (Don't call it Silicon Alley.)[6]
A session on comparing the respective social networking development platforms on Wednesday revealed that we're in "a new territory and we're all going through it together," as Dave Morin, senior platform manager at Facebook put it.[3] Ning, a platform for setting up new social networks, is adding 1,500 networks a day and millions of users. "We built Ning to be a general-purpose, programmable platform," he said.[7] Maybe it was the Lex Luthor resemblance that made it seem extra sinister. For the record, this line is becoming old hat for Andreesen--in a blog post he wrote after Ning raised $60 million net in a private round of funding, Andreesen said the money would "enable us to keep scaling given our accelerating growth (more than 230,000 networks on Ning now, growing at over 1,000 per day) and to make sure we have plenty of firepower to survive the oncoming nuclear winter. At current growth rates, we don't need it to get to cash-flow positive, but having lived through the last crunch, it's good to be conservative with these things."[8] The social network enabler banked $60 million in series D financing, a valuation of $500 million. Not too shabby for a site that helps users build their own versions of Facebook or MySpace.[2]
Ning currently hosts about 250,000 social networks, 70 percent of which are active, said Andreessen, Ning chairman and co-founder.[4]
Gates Co. famously dealt a fatal blow to Andreessen's Netscape Navigator browser in 1995 when it released Internet Explorer. [6] "When Netscape first started, everyone told us there wasn't any money on the Internet," Andreessen said.[1] Mosaic attracted a million or so users; Netscape's numbers were in the multi-millions. "It wasn't until after that I saw this was going to be a real phenomenon," Andreessen said. The super-information highway was going to pan out, he added.[1]
"The future of most forms of communication and interactivity is the Internet," Andreessen said.[1] The underbrush of the valley keeps on growing." Battelle congratulated Andreessen on his funding, which Batelle said was uncovered by a "blogger." That would be Anthony Ha of VentureBeat. Writing afterward on his own blog, Andreessen said it's nice to have money for the coming "nuclear winter." He said he meant the financial woes in the stock market, which can cause a spiral down.[7]
Battelle noted that the cable companies and other media companies have all piled into the Internet now. [7] The odd thing is that I've heard similar hedge-your-bet comments all week. This is a crew that survived the last bubble and they know from firsthand experience that a lucky rabbit's foot won't be enough to get by in case lightning strikes twice. The knock against Web 2.0 is that it's chockablock with me-two, doodad makers, companies fated to blow away like prairie grass at the first sign of a storm.[8] Some of that is true. When you walk the floor at Web 2.0, you see that this year's conference is dominated by serious companies with serious products: Disney, IBM, Intuit, Microsoft, Cisco-Webex, Oracle, Juniper, Google, EMC--well, you get the idea. (You can find the full list in the program guide.) Barring a real nuclear winter, I expect they'll still be around for quite some time.[8]
The team launched the Netscape browser, an enterprise software effort, and a Web development and advertising business--all at the same time.[1] By 1998, Netscape's software business was raking in $400 million in annual revenues.[1] Charles Cooper has covered technology and business for over 25 years. A graduate of Queens College and Columbia University, Cooper began his career in journalism at the Associated Press before moving to technology coverage. Over the years, he has worked at Computer & Software News, Computer Shopper, PC Week, ZDNet News and now, CNET News.com. He received the Excellence in Journalism award from the Northern California branch of the Society for Professional Journalists for column writing.[8]
"You look at CPMs for a lot of the social-media platforms we work with and you wonder about the CPMs," said an executive who asked to remain unidentified. This guy was one of the smart ones: he took the money last year and decided to hang around the mother ship--at least for the foreseeable future--and run the division. "Unless they run a very small shop, it's going to be really hard for them to make serious money.[8] The advantage of building a site that can be used through a browser is it can be accessed by anyone else in the world. There's no longer any incentive to use a service that can't be reached through a browser, he said. It's going to be another 15 or 20 years before the industry takes the next revolutionary leap forward.[1] If Andreessen thinks MicroHoo can succeed, well, maybe it can. Fifteen years ago, Andreessen unleashed a revolution upon the world when he put out the first consumer-oriented browser into the wild.[1]
"Wonderful company," Andreessen quipped. Microsoft has been arguing that it's not the "bad guy" anymore and that Google is the one to worry about.[7]
Ning, like Battelle's Federated Media, could take a big advertising hit in a recession. [6]
SOURCES
1. An Unusual Vote For MicroHoo - Forbes.com
2. Battelle Casts, but Andreessen Doesn`t Take the Bait
3. Web 2.0: It's No Fad -- Web 2.0 -- InformationWeek
4. Andreessen: Mosaic Expectations Were Very Low - New York Times
5. Andreessen: Merger would be sad end for Yahoo
6. History lessons with Marc Andreessen | The Social - CNET News.com
7. Live blogging: Conversation with Ning'''s Marc Andreessen at Web 2.0 | The Industry Standard
8. Time to get over the Web 2.0 inferiority complex | Coop's Corner : A Blog from Charlie Cooper - CNET News.com
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