Netscape's Work Culture

The Setback Contd..

Former Netscape vice president of technology Mike McCue and product manager Angus Davis founded Tellme Networks. They brought with them John Giannandrea. As chief technologist and principal engineer of the browser group, John Giannandrea was involved with every Navigator release from the first beta of 1.0 in 1994 to the launch of 4.5 version in Oct.

1998. Ramanathan Guha, one of Netscape's most senior engineers, left a $4 million salary at AOL to join Epinions.com. He was soon joined by Lou Montulli and Aleksander Totic, two of Netscape's six founding engineers. Other Netscape employees helped start Responsys.

Some employees joined Accept.com and others AuctionWatch. Spark PR was staffed almost entirely by former Netscape PR employees. Market watchers were surprised and worried about this exodus of Netscape employees. Some of them felt that the mass exodus might have been caused by monetary considerations.

Most of the employees at Netscape had stock options. Once the acquisition was announced, the value of those options rose significantly. David Yoffie, a Harvard Business School professor said, "When AOL's stock went up, the stock of most of the creative people was worth a ... fortune."

Most of them encashed their options and left the company. But some analysts believed that there were other serious reasons for the exodus. Netscape employees always perceived themselves as an aggressive team of revolutionaries who could change the world.

Before resigning from AOL, Jamie Zawinski, the 20^th person hired at Nescape, said, "When we started this company, we were out to change the world.

We were the ones who actually did it. When you see URLs on grocery bags, on billboards, on the sides of trucks, at the end of movie credits just after the studio logos – that was us, we did that. We put the Internet in the hands of normal people. We kick-started a new communications medium. We changed the world." Another ex-employee said, "We really believed in the vision and had a great feeling about our company."

But the merger with AOL reduced them to a small part of a big company, with slow-moving culture. Some employees felt that AOL was more interested in the Netscape's brand name. An ex-Netscape executive said, "AOL always turned its nose up at technology – what Netscape was trying to do. The opportunity AOL had was to make Netscape the technology arm of AOL.

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Case Details

Case Code : HROB013
Themes: Organizational Culture
Case Length : 13 Pages
Period : 1994-2000
Organization : Netscape
Pub Date : 2001
Teaching Note : Available
Countries : USA
Industry : Information Technology

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