America Online (AOL) acquires Netscape

In November 1998, Netscape shocked the internet market by agreeing to be acquired by America Online. That the doyen of net counter-culture was succumbing to one of the medium's dominant players was seen by some observers as a sign of the growing commercialization of the internet.

It was true that Netscape's bruising battle with Microsoft had taken its toll. But Barksdale was aware that Netscape's other business - its Netcenter e-commerce portal - also needed wider and more substantial support if it were to realize its potential. So, by partnering with AOL, Netscape gained a substantial backer for its e-commerce venture, and receive a significant boost to its browser business.

For AOL, the move gave it one of the net's biggest technology brands, which also saw an important alliance cemented with Sun Microsystems. It may have been a sad day for supporters of diversity on the web, but for the parties involved, the executives were in no doubt of the importance of the move.

On reflection, did Barksdale feel that Netscape had achieved its potential by the time AOL acquired it?

'I think we'd exceeded our fondest hopes in many areas. We missed a few, but given the situation we were in I thought we'd done very well.

'By the time we closed in March of this year (1999), the company was worth $10 billion-plus, that's in a period of 48 months and there's probably not more than a handful of companies in the history of the world that have done that.'

AOL, he believes, brought Netscape the ability to market its product to the widest possible audience, as well as giving it more financial muscle:

'The one thing we needed was a bigger distribution arm, and the obvious opportunity there was AOL. So when they came calling, I thought that was a very fortuitous thing for us. I didn't regret that. I thought it was best for the employees, certainly best for shareholders and we had a bigger entity behind us to protect us from capital erosion.'

Barksdale left Netscape after the AOL deal, in March 1999, a very rich man. Indeed between July and October of 1999, he sold AOL shares he had received as part of the takeover worth a staggering $96 million.