Quick: Who was the first browser manufacturer to hold an IPO in the dotcom era? Netscape? WRONG! Its competitor Spyglass beat it out, holding its IPO June 27, 1995. Its IPO did rather well too, issuing two million shares at a cost of $17 per share and raising $28.5 million. A week later, it was trading for $28.25 per share.
The same week Spyglass went public, Netscape filed plans with the SEC for its own IPO.
Who was Spyglass?
Spyglass was a licensee of Mosaic, the first web browser. I really thought I remembered seeing Spyglass Mosaic on retail shelves circa 1995, but I don’t think that’s the case. What I actually saw was probably Spry Mosaic, another company who had licensed the use of the Mosaic name from the University of Illinois. Spry did sell its version of Mosaic directly to consumers at retail. Spyglass licensed its browser to other companies to use, rather than selling it directly to consumers.
At least that’s what former Spyglass employee Eric Sink says, and since he was there, I have every reason to believe him. If Spyglass Mosaic had sold at retail, images of the retail packaging would exist and so would copies of the browser. A few leaked copies of Spyglass Mosaic exist but they warn the user not to distribute it.
Sink says Spyglass licensed Mosaic to around 120 companies to embed the browser in their own products. One of those companies was Datastorm, the publisher of Procomm Plus. But the problem for everyone was that one of the other licensees was Microsoft. Early versions of Internet Explorer were very heavily based on Spyglass Mosaic code, which Microsoft purchased for $2 million. When you click Help > About in Internet Explorer 6 and earlier, the resulting screen references Spyglass Mosaic.
The problem with licensing Mosaic to Microsoft
Internet Explorer was initially a commercial product, part of the add-on Plus pack that cost $40 that included add-ons like additional screen savers and a Pinball game. Microsoft decided to change strategy even before the Plus Pack was released, but the decision came in May, as Bill Gates’ Internet Tidal Wave memo. It was too late then to change direction for the August release. But by November, Microsoft was bundling Internet Explorer with Windows itself and giving it away for free to those who bought the original August 1995 version.
Microsoft argued since it gave away the browser, it owed a percentage of $0 as royalties. That was a problem for Spyglass, who made their money off royalties. Microsoft not paying royalties was a problem. But giving its browser away meant people weren’t buying the product from the 119 other licensees either. Revenues started declining.
Spyglass sued Microsoft, and in January 1997 the two companies settled for $8 million.
On March 26, 2000, OpenTV revealed plans to acquire Spyglass for $2.5 billion in stock. OpenTV wanted to use Spyglass’ Prism server software, which reformatted standard web pages to be more suitable for viewing on set-top boxes, in its own interactive TV services. It also planned to use Spyglass Mosaic in its set-top boxes.
It was a steep price to pay, but prices were still high in 2000. The July 3, 1995 issue of Computerworld, reporting on the sale of Spry to Compuserve for $100 million, stated that companies were paying top dollar for fear of being left behind when Internet commerce reaches critical mass. That hadn’t happened yet in March 26, 2000. It was only in August 2000 that Internet access reached 50 percent of the US population for the first time.
David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.
OpenTV never used Spyglass in a set top box (this is the world I was in in those days). But Spyglass’ staff around the world were absorbed in to OpenTV and made huge contributions later. The digital TV world finally embraced HTML when broadband happened, at first with ADSL lines. Now HTML is used in many places (although the iteractivity as foreseen by OpenTV is not. See HbbTV for a comparison.