There has been talk of Netscape becoming the next Microsoft, but the comparison is not apt. Microsoft dominates the personal computer industry in a way that no company, even Netscape, could do to the virtually untameable Internet. It’s more likely that investors believe the myriad alliances Netscape has struck with other technology companies will enable it to set the tone for developing business, banking and entertainment on the World Wide Web. The bottom line is that it doesn’t matter that Netscape is still a puny company on paper. The future is what counts, and optimism over the future has juiced the stocks of most Internet-related companies, not just Netscape.
Predictor: Einstein, David
Prediction, in context:In a 1995 article for The San Francisco Chronicle, David Einstein covers the incredible interest in the initial public offering of Netscape stock, and the months that followed. He writes: ”Shares of Netscape Communications continue to rise like an Atlas rocket toward the stratosphere, taking on 21 1/2 more points yesterday to close at 171. That’s right, $171 per share. The Mountain View [California] maker of Internet software is becoming the Michael Jordan of the stock market, able to jump higher and score more than anyone else. And it’s doing this in its rookie year (it went public in August). What’s really scary is that Netscape seems to be gaining momentum. Its stock price has nearly tripled in two months, rising 62 percent just in the past eight trading days. And yesterday it posted its best single-day gain to date … The question on everyone’s mind is: How can a company with less than $21 million in quarterly sales, that barely makes a profit, command such a price for its stock? The answer: Nobody knows. It’s not just hype, that’s for sure. Rabid interest in the Internet no doubt helped Netscape at first. On the first day of trading, its stock shot up as high as 75 before settling at 58 1/4 – more than double its offering price of 28. But hype wears off … There has been talk of Netscape becoming the next Microsoft, but the comparison is not apt. Microsoft dominates the personal computer industry in a way that no company, even Netscape, could do to the virtually untameable Internet. It’s more likely that investors believe the myriad alliances Netscape has struck with other technology companies will enable it to set the tone for developing business, banking and entertainment on the World Wide Web. The bottom line is that it doesn’t matter that Netscape is still a puny company on paper. The future is what counts, and optimism over the future has juiced the stocks of most Internet-related companies, not just Netscape.”
Date of prediction: December 6, 1995
Topic of prediction: Economic structures
Subtopic: General
Name of publication: San Francisco Chronicle
Title, headline, chapter name: Netscape’s Rise is Getting Scary: It Shows No Sign of Slowing as Stock Soars 21 1/2 Yesterday
Quote Type: Direct quote
Page number or URL of document at time of study:
http://web.lexis-nexis.com/universe/document?_m=624f5ef8673a5abc75ddf58d6c0f02fe&_docnum=1&wchp=dGLbVtb-lSlAl&_md5=8d8a43e9634f70e431712e093e424351
This data was logged into the Elon/Pew Predictions Database by: Anderson, Janna Quitney