BROWSER MADNESS

It was such a seller's market that the sellers wouldn't sell, not just yet. Trading of 5 million shares in the long-awaited initial public offering of the upstart Netscape Communications Corp. was supposed to begin last Wednesday at 9:30 a.m., when the NASDAQ whistle blew. But here it was 90 minutes later, and the institutions and portfolio managers who had received huge blocks of shares still hadn't sold any of their stock. Investors were bidding up the price so fast that the ground floor had yet to be set. What the investment banks had valued a few weeks ago at a modest $14 was soaring to $30...$45 ...$55 and into the wild blue-chip yonder. Finally, as stunned brokers nationwide sat with phones glued to both ears--buyers on one, sellers on the other--the opening price was reached: $71 a share. Only then did profiteers start cashing in: Sell, sell, sell!

Not bad for a 16-month-old company that has never earned a profit and has given away most of the software it has created. Not bad for Netscape co-founder Jim Clark, who, by day's end--when the stock price finally settled at a more reasonable $58.25--was worth $565 million. And not bad for fellow co-founder Marc Andreessen, the 24-year-old programming tyro, whose stake made him a millionaire 58.25 times over.

So what exactly was America buying into with such enthusiasm last week? The Internet, of course, that boomtown of the wired world. "The Internet has gone to Main Street," said analyst Kathleen Smith of Renaissance Capital, a Connecticut firm that evaluates initial public offerings for institutional investors. Netscape was "the hottest deal we've ever seen. Friends we never thought we had were calling us, asking us how they could buy shares."

Netscape, based in Mountain View, California, makes an essential piece of Internet software known as a browser, which can be thought of as the 3-D glasses your computer wears to pick up images, sounds and text on the World Wide Web, the multimedia portion of the Internet. Netscape controls a cozy 70% of the market for browsing software.

Investors are increasingly keen to buy into Internet-related companies, but have had few opportunities. Four such companies have gone public: Internet-access providers Netcom On-line Communications Services, Performance Systems International and UUNet Technologies; and another Web-browser maker, Spyglass. All are performing extremely well because the Internet is regarded as the next stage of the information revolution. Now that computers are being linked around the globe, techno-happy investors are trying to stay ahead of that curve and find the next big company. Netscape, says Lise Buyer, technology analyst at T. Rowe Price, "has the potential to be as important to the Internet as Microsoft's dos was to the personal computer."

One reason Netscape's Navigator dominates the browser market is that the company gave it away to home and school users, which in turn attracted Web-based businesses. Commercial users pay for the Netscape software that makes them accessible to browsers-another market that Netscape controls, for now.