How Microsoft Courted Netscape
The upstart and the giant considered a partnership, but the deal fell apart

Did Microsoft and Netscape have to become blood enemies? There was a time when the two companies might actually have become partners. But it wasn't to be, and why it wasn't says a lot about Bill Gates and Microsoft. TIME Daily's Joshua Quittner and journalist Michelle Slatalla tell of the encounter between an aggressive Microsoft team and Netscape's wary execs in their new book "Speeding the Net:The Inside Story of Netscape and How It Challenged Microsoft." (Atlantic Monthly Press; $25.00)

etscape CEO Jim Barksdale thought that his fledgling company was too small to compete head-on with Microsoft, which was why he was anxious to find another way to co-exist. He favored a strategy of finding ways to work with Bill Gates. (Barksdale was new to Silicon Valley and its culture; maybe that's why he didn't share the prevalent local opinion that mighty Microsoft was the devil, ready to suck any unsuspecting smaller company down into the fiery pits of hell.)

In any case, when Barksdale ran into one of Gates' deputies at an industry conference in March of 1995, he was happy to sit down and have a friendly talk. He and Dan Rosen, Microsoft's new senior director of strategic relationships, already knew each other from the not-so-distant days when they both had worked at AT&T. "We spent an hour or so over drinks swapping stories about AT&T and brainstorming about how Microsoft and Netscape could work together," Rosen remembered. "Jim said that he would rather find a way to work with Microsoft than compete against us, so we agreed to try to scope something out."

Microsoft was developing an Internet server product. Rosen thought that Barksdale was particularly eager to convince Microsoft to abandon its product in favor of licensing and distributing Netscape's Commerce Server. In addition, Barksdale told Rosen that Netscape and Microsoft should work together to support a single security protocol to facilitate financial transactions over the Internet.

"It seemed to me that there was scope. . . (continued)