Remember Netscape? It was the first company in the world to attempt to properly commercialize the World Wide Web by launching, in December, 1994, the first graphical interface.
Before Netscape the internet was a strange, clunky but intriguingly new place of pixelated text, command-line code and weirdly chirping dial-up modems. It’s strange to listen to that noise now but even stranger perhaps, in today’s world of 3D printing, the Internet of Things and ubiquitous smartphones, to remember that this all started only two decades ago.
Back then the internet was used mainly by academia, the US military and hippyish, kind-of-anarchic, nerds. Netscape’s web browser was transformative in that it turned the internet into a point-and-click environment which made it, for the first time, accessible to millions.
Netscape’s star burned, and burned brightly for a little more than 10 years. It went public in August 1995, only months after its launch, and the IPO astounded its 20-something owners by raising $3 billion, despite the fact that Netscape had yet to make one cent in profit. It was this IPO that has since been said to have started the Dot-Com bubble.
The internet giant of the day, America Online – later to become AOL, remember them? – announced it wanted to buy Netscape in 1998 and did so a year later for $4.2 billion. Netscape was killed off by AOL in 2008 after being crushed by Microsoft in the so-called “browser wars” of the late 1990s. The browser that started it all, and at one time had more than 90% of the browser market share, had only 0.6% when it died. By then Microsoft’s Internet Explorer had 78%.
A brave new world
The comparisons between the early days of the Dot-Com bubble and what we are seeing today, with the hype, money and feverish, expectant uncertainty that hangs around blockchain and bitcoin, has often been made. The year that AOL moved to take over Netscape was the year Google was born.
We are, goes the argument, not even at that point yet with blockchain. Just like today, many back then said it was an IPO-driven bubble that would burst – and burst it did – while the blockchain fans will argue “well yes, but just look what happened to Google?”
But there is another point here. The future that Netscape, AOL and all the other bright young internet start-ups promised was a brave new world of borderless communication and fast and free and shared information that would allow everyone across the world to share and collaborate.
And yes, of course that did happen. The effect the internet has had on communication, culture and commerce has been revolutionary. But something unpredictable happened too. Today’s world is dominated by a few internet giants that are the biggest companies the world has ever seen. They gained their market dominance by offering free services to billions of people in exchange for private data.
And with that data mining has come, with a host of other things, a sophisticated algorithm-driven agenda that seems to have tried to change the political landscape of the USA and the EU. It is, in history, unprecedented and it is something that we are only just really beginning to understand. The internet giants certainly did not see it coming and democratic governments across the world are still struggling to come to terms with it.
And so to blockchain. Today we are told that this brave new world, that many are looking at with a familiar starry-eyed wonder, is going to somehow liberate us via decentralized and open communication. Just like the internet was going to do in 1995?
What are the consequences?
Some are now asking what will be the long-term consequences of putting our lives – our financial, health and work records and more – on to blockchain databases? Has this sort of thing worked out with the internet? If we really are at the pre-Google stage of the blockchain bubble, there’s an important question. So who gets to be Google?
The Dot-Com bubble burst in 2001, just after AOL had paid $165 billion for Time Warner. The price was approximately double the iconic media and entertainment conglomerate’s market cap. The bubble burst, the market changed, and AOL Time Warner as it became known, struggled badly.
In 2002 AOL Time Warner reported a loss of $99 billion – then the biggest loss in US corporate history – and by 2006, its market cap had shrunk to little more $20 billion. In 2015 it was purchased by US telecoms giant Verizon for $4.4 billion.
Next week, there is yet another chapter to this story running in a New York courtroom. Time Warner is now the subject of a $109 billion acquisition bid by AT&T. The bid was blocked by the US Justice Department on the grounds it will give AT&T and Time Warner too much advantage over competitors.
The trial, that is being billed as a debate on “the future of TV,” is scheduled to start in New York on Monday and will see AT&T and Time Warner argue against the Justice Department. They will say that the merger is legal and is just an attempt to keep up with Netflix, Amazon and yes, of course, Google and Facebook. It is in effect a tussle between old media and new. Where blockchain will fit into this tussle is not yet known.