The market valuation of Netscape Communications is not specifically a Cypherpunks topic, though many of us interested in it, and/or use Netscape. But there are some issues about Netscape's future product plans which may affect market valuation, and which also could hinge on PR issues like Jim Clark's apparent support for mandatory key escrow. To wit, Netscape is currently valued at $5 billion or so, despite having essentially no revenues or profits (sure, it has a little of each, but not much). This is more than the market capitalization of many sizable, respected companies. Companies like General Dynamics, Apple Computer, CBS (which was just sold to Westinghouse for $5B). Granted, Netscape investors are betting on the come. (And contrary to what someone said, investors in companies like Netscape are not mostly interested in profits. Rather, they are interested in selling at a higher price, for whatever reason. This is also known as the "greater fool" theory: that no matter how high the price of a stock, there is some greater fool who will buy it a higher price. Of course, the corrolary to the greater fool theory is that there is usually a greatest fool.) So, can Netscape keep a $5 billion valuation? (And more to the point, can it double from where it is now, say, and sustain a $10 B valuation? I am skeptical, personally, but I've been wrong before.) What Netscape has to offer is based on a *public* standard, the Web and all the various pieces that so many companies are supporting. Netscape's _server_ market--which is said to be where the revenues are mostly coming from--is likely to face heavy competition. As is the browser, of course. (Spyglass Mosaic, Ravi's company, HotJava, CyberDog, MacWeb, and a bunch of others). Scenario #1: Netscape sticks to an open standard. Hard to see what keeps the valuation at $5 B with so many free browsers, free servers, low-cost servers, etc. (From the browsing side, "brand loyalty" is probably minimal: I've used several browsers, and currently use Netscape 1.1N for _some_ of my Web needs. I'll switch "on a dime" to another browser if it offers features I like. Others I have talked to feel the same way. I think "loyalty" to a particular browser is close to nil. Much less than loyalty to a text editor, for example.) Scenario #2: Realizing this, Netscape seeks to "differentiate itself" by proprietary technology. "'Nuff said." I can't see any means of "proprieterizing" the Web that Netscape could hang on to. Any good ideas will be quickly copied or reverse-engineered by other companies and groups. Unlike a chip company, with various and complicated secrets tied up in internal chip design data bases and in billion-dollar fabrication plants, what could a browser or server really keep secret? Unlike a company like Adobe, with various programs whose functionality can mostly be protected from copying by use of copyright laws, a Web browser that operates on public standard files in standard ways will be hard to protect. (Ironically, Netscape's valuation is significantly higher than Adobe's, and Adobe had something like $700 million in yearly sales and $100+ million in profits.) So, it is my thesis that "brand loyalty" to Netscape is ephemeral, that users will flock to the Next Whizzy Thing faster than you can say "price collapse." The connection with crypto and key escrow is that any bad publicity, any hint that Netscape is signing-on to be an agent for Big Brother, could hasten this conversion. While I would never, ever suggest to anyone that the sticker idea I devised a few years ago--"Big Brother Inside"--be applied here, I can imagine others will. Netscape is in a very delicate balancing act. Jim Clark may turn out to be the Karl Wallenda of the Web (with no Net to catch him). --Tim May Views here are not the views of my Internet Service Provider or Government. ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay@got.net 408-728-0152 | anonymous networks, digital pseudonyms, zero Corralitos, CA | knowledge, reputations, information markets, Higher Power: 2^756839 | black markets, collapse of governments. "National borders are just speed bumps on the information superhighway."