NetObjects
Encyclopedia
NetObjects, Inc. is a software company founded in 1995 by Samir Arora
, David Kleinberg, Clement Mok
and Sal Arora. The company is best known for the development of NetObjects Fusion
, a web design
application.
In its first phase, NetObjects was based in Redwood City, California
, and ceased operations in 2001 after selling its assets to Website Pros (now Web.com
) and a portfolio of patents to Macromedia
.
In 2009 NetObjects was re-established as an independent software company.
and before that in part at Apple Computer
investigating proto-types of web browser
s, information navigation and web design tools.
In 1995 NetObjects was founded to market NetObjects Fusion, a new design tool to build web sites. The term "web site", well-known and widespread today, was then still on the rise and is connected with the work of Samir Arora
, David Kleinberg, Clement Mok
and Sal Arora.
Initially NetObjects was as a privately held company with the Series A venture investment led by Rae Technology, Series B by Norwest Venture Partners
and Venrock Associates
, followed by Novell
, Mitsubishi
and AT&T
Ventures and the last round by Perseus Capital, L.L.C.
In April 1997 IBM
invested $100 million to acquire a majority of the company. The deal had a valuation of $150 million.
Additionally, Susan Kare
, who had built many of the interface elements of the Apple Macintosh
, was a consultant
to help design the user interface
of NetObjects Fusion.
.
Also in 1996, NetObjects Fusion won PC Magazine
s Editors' Choice award. CNET
's Builder.com elected Samir Arora one of the Web Innovators of 1997, and in 1998 NetObjects received the prestigious Gold award from the Industrial Designers Society of America
(IDSA).
Eleven U.S. patent
s were granted for Internet
-related technologies (design
and utility).
Releases 2.0 (1997) and 3.0 (1998) of NetObjects Fusion again gained positive reactions by the PC press as well as commercial success on the market. In 1999 IBM brought NetObjects to the stock exchange
with initial public offering
while remaining the major shareholder
. The initial public offering
(IPO) on NASDAQ
raised $72 million.
The board of directors
consisted of six people: Samir Arora as Chairman of the Board, Chief Executive Officer and President, and five directors including John Sculley
from Apple Computer, three representatives from IBM and one from Novell.
deals
were made with nearly all the big PC
sellers like Dell
and HP, and with Internet service provider
s like UUNET
, Earthlink
or 1 & 1 (Germany
). The company itself said it licensed the distribution
of more than 15 million copies of NetObjects Fusion. In addition, the company sold over 500,000 copies of NetObjects Fusion directly through retail. In 2001 a number of 5 million users worldwide was published.
In 2000 the stock
price of NETO (ticker symbol
) reached its record high of $45 11/16 USD, making NetObjects worth $1.5 billion.
Revenue
had started at $7.2 million in 1997, reached $15 million in 1998, $23.2 million in 1999 and peaked at $34.2 million for fiscal year 2000 (October 1999 - September 2000).
On March 3, 2000, TheStreet.com
's Adam Lashinsky praised NetObject's financial performance and its early adoption of e-business:
starting in 2000.
Tough competition
from Microsoft
, Macromedia
and Adobe
put pressure on market share
and falling prices of web-design application
s affected revenues. Also, long-term revenue effects of bundling deals in the software industry
are controversial.
NetObjects slashed prices for NetObjects Fusion from release 1.0 to release 4.0 by more than 50%. Older versions stayed in distribution for even lower prices.
Technical demands for large business web sites changed and required direct access of programmer
s to HTML
code
— which NetObjects Fusion was not designed for.
Its target market were designers who need complete control over page layout
and a similar user interface
as desktop publishing
applications.
were aimed at big businesses and ranged at much higher price levels than NetObjects Fusion.
However, IBM and NetObjects decided that its target market was the sector of small and medium enterprises, so it would focus on its flagship application NetObjects Fusion which would fit within the scope of these customers.
In the beginnings of the concept of "software as a service
", the company secondly made a bet on its ability to recognize technological trends and coined a strategy shift to a subscription model
. To this end NetObjects Matrix was developed and GoBizGo.com, an e-commerce solution was started. Subscribing web and online services would help small businesses keep pace with the Internet. To finance this shift of strategy, the NetObjects Enterprise Division with 40 employees along with two applications, Collage and NetObjects Authoring Suite, was sold for $18 million to UK-based Merant (merged in 2004 with Serena Software
Inc., based in San Mateo, California
).
High hopes were based on the NetObjects Matrix platform and its possibilities to position NetObjects as a "Business Service Provider". A version for Mac was announced, and a cooperation with IBM Global Services was forged. The share price, which already had fallen below 1 US$, doubled on the news of the IBM deal.
a result of changing markets, price cuts, strategy shift, and absent Authoring Suite / Collage sales. Subscription fees from NetObjects Matrix started coming in but the company had to face losses. Total revenues for the first three quarters of FY 2001 were only as much as $4.22 million opposed to total costs of $7.67 million.
While trying to raise an additional $50 million in a private placement with Deutsche Bank
, the cash reserves
started to fade. In the summer of 2001, the markets plummeted with the bursting of the dot.com bubble. The decision of the NASDAQ to de-list NetObjects in August 2001 because the share price had been hovering below $1 for longer than a year made things even worse. Ultimately IBM as the majority shareholder decided to sell NetObjects.
In a message to the user community, CEO Samir Arora had to announce that NetObjects was ceasing operations on September 1, 2001.
NetObjects Fusion, NetObjects Matrix including the MatrixBuilder, BizGoBiz and other assets were sold to Website Pros (now Web.com
), a web design and services company based in Jacksonville, Florida
, for an estimated amount of $4 million, including instant payments as well as fees from future revenues from NetObjects applications and services within three years. (The sum of $4 million was based on assumptions about sales in this three-year period. Depending on real sales the price could in fact be lower or higher up to a limit of $10 million.)
Additionally a portfolio of seven patents was acquired by Macromedia (now Adobe), the distributor of Dreamweaver, the long-term main competitor of NetObjects Fusion.
) went on developing and distributing future versions of NetObjects Fusion and offering subscription services based on this application, representing the mixed business model that was invented at NetObjects.
License revenue from sales of NetObjects Fusion reached nearly $3.58 million in 2006, $2.4 million in 2007, and $2.5 million in 2008. In May 2009 NetObjects Fusion was sold. In the first six months of 2009 "revenue generated by the NetObjects Fusion software business" reached only $428 thousand compared to $1.5 million in the first six months of 2008. Net income for this period was $228 thousand compared to $302 thousand.
In terms of management and staff, there are no overlapping between the old and new companies with the same name. Steve Raubenstine, who was vice president of the NetObjects Fusion division at Web.com (former Website Pros), serves as President and CEO of the new NetObjects Inc.
Samir Arora
Samir Arora is best known as the founder, CEO and Chairman of the web design pioneering company NetObjects, Inc. from 1995 to 2001, and also as the co-founder, CEO and Chairman of Glam Media since 2003. Samir Arora holds 13 US software patents as co-inventor.- Education :Samir Arora grew up in New...
, David Kleinberg, Clement Mok
Clement Mok
Clement Mok is a graphic designer and author.Mok founded several design-related businesses — Studio Archetype , CMCD and NetObjects, Inc.. In 1997, Mok helped to launch the advertising campaign called the "The Internet Guy". From 1998 until 2001, he was Chief Creative Officer of Sapient...
and Sal Arora. The company is best known for the development of NetObjects Fusion
NetObjects Fusion
NetObjects Fusion is a web design tool, from 1996 - 2001 developed and distributed by NetObjects, Inc., marketed from 2001 until 2009 by Web.com , which acquired the application in 2001, and from July 2009 on distributed again by the re-established NetObjects, Inc.NetObjects Fusion has a graphical...
, a web design
Web design
Web design is the process of planning and creating a website. Text, images, digital media and interactive elements are used by web designers to produce the page seen on the web browser...
application.
In its first phase, NetObjects was based in Redwood City, California
Redwood City, California
Redwood City is a California charter city located on the San Francisco Peninsula in Northern California, approximately 27 miles south of San Francisco, and 24 miles north of San Jose. Redwood City's history spans from its earliest inhabitation by the Ohlone people, to its tradition as a port for...
, and ceased operations in 2001 after selling its assets to Website Pros (now Web.com
Web.com
Web.com, Inc , formerly Interland , was a provider of websites and web services to small businesses and consumers, based in Atlanta, Georgia. Web.com's services included do-it-yourself and professional website design, web hosting, e-commerce, web marketing, and e-mail...
) and a portfolio of patents to Macromedia
Macromedia
Macromedia was an American graphics and web development software company headquartered in San Francisco, California that produced such products as Flash and Dreamweaver. Its rival, Adobe Systems, acquired Macromedia on December 3, 2005 and controls the line of Macromedia...
.
In 2009 NetObjects was re-established as an independent software company.
Introduction
From 1992 to 1995 the founders of NetObjects had worked at Rae TechnologyRae Technology
Rae Technology was a software company founded as a spin-off from Apple Computer in 1992. Rae Technology was best known for its Personal Information Manager Rae Assist and for being the predecessor of NetObjects, Inc.. After transferring new developed technology for web site design to NetObjects, Inc...
and before that in part at Apple Computer
Apple Computer
Apple Inc. is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad...
investigating proto-types of web browser
Web browser
A web browser is a software application for retrieving, presenting, and traversing information resources on the World Wide Web. An information resource is identified by a Uniform Resource Identifier and may be a web page, image, video, or other piece of content...
s, information navigation and web design tools.
In 1995 NetObjects was founded to market NetObjects Fusion, a new design tool to build web sites. The term "web site", well-known and widespread today, was then still on the rise and is connected with the work of Samir Arora
Samir Arora
Samir Arora is best known as the founder, CEO and Chairman of the web design pioneering company NetObjects, Inc. from 1995 to 2001, and also as the co-founder, CEO and Chairman of Glam Media since 2003. Samir Arora holds 13 US software patents as co-inventor.- Education :Samir Arora grew up in New...
, David Kleinberg, Clement Mok
Clement Mok
Clement Mok is a graphic designer and author.Mok founded several design-related businesses — Studio Archetype , CMCD and NetObjects, Inc.. In 1997, Mok helped to launch the advertising campaign called the "The Internet Guy". From 1998 until 2001, he was Chief Creative Officer of Sapient...
and Sal Arora.
Initially NetObjects was as a privately held company with the Series A venture investment led by Rae Technology, Series B by Norwest Venture Partners
Norwest venture partners
Norwest Venture Partners is a global, multi-stage investment firm focused on investments in early to late stage venture and growth equity investments in U.S...
and Venrock Associates
Venrock Associates
Venrock, a compound of "Venture" and "Rockefeller", is a pioneering venture capital firm formed in 1969 to build upon the successful investing activities of the Rockefeller family that began in the late 1930s. It has offices in Palo Alto, California, New York City, Cambridge, Massachusetts, and...
, followed by Novell
Novell
Novell, Inc. is a multinational software and services company. It is a wholly owned subsidiary of The Attachmate Group. It specializes in network operating systems, such as Novell NetWare; systems management solutions, such as Novell ZENworks; and collaboration solutions, such as Novell Groupwise...
, Mitsubishi
Mitsubishi
The Mitsubishi Group , Mitsubishi Group of Companies, or Mitsubishi Companies is a Japanese multinational conglomerate company that consists of a range of autonomous businesses which share the Mitsubishi brand, trademark and legacy...
and AT&T
AT&T
AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...
Ventures and the last round by Perseus Capital, L.L.C.
In April 1997 IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
invested $100 million to acquire a majority of the company. The deal had a valuation of $150 million.
Key positions
Key positions in the company were as follows:- ChairmanChair (official)The chairman is the highest officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office is typically elected or appointed by the members of the group. The chairman presides over meetings of the assembled group and conducts its business in an...
and Chief Executive OfficerChief executive officerA chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
(CEO): Samir AroraSamir AroraSamir Arora is best known as the founder, CEO and Chairman of the web design pioneering company NetObjects, Inc. from 1995 to 2001, and also as the co-founder, CEO and Chairman of Glam Media since 2003. Samir Arora holds 13 US software patents as co-inventor.- Education :Samir Arora grew up in New...
, who held executive positions at Apple Computer and Rae Technology.
- Executive Vice President, Products and Marketing: David Kleinberg, who co-founded Rae Technology with Samir Arora.
- Chief Creative OfficerChief creative officerA chief creative officer is the highest ranking position of the creative team within a company. This position is responsible for the overall look and feel of all materials, media, and branding associated with the organization...
: Clement MokClement MokClement Mok is a graphic designer and author.Mok founded several design-related businesses — Studio Archetype , CMCD and NetObjects, Inc.. In 1997, Mok helped to launch the advertising campaign called the "The Internet Guy". From 1998 until 2001, he was Chief Creative Officer of Sapient...
, well known as an interactivityInteractivityIn the fields of information science, communication, and industrial design, there is debate over the meaning of interactivity. In the "contingency view" of interactivity, there are three levels:...
designerDesignerA designer is a person who designs. More formally, a designer is an agent that "specifies the structural properties of a design object". In practice, anyone who creates tangible or intangible objects, such as consumer products, processes, laws, games and graphics, is referred to as a...
.
- Vice President of Product Development and Chief Technology Architect: Sal Arora, who was the lead engineer at Rae TechnologyRae TechnologyRae Technology was a software company founded as a spin-off from Apple Computer in 1992. Rae Technology was best known for its Personal Information Manager Rae Assist and for being the predecessor of NetObjects, Inc.. After transferring new developed technology for web site design to NetObjects, Inc...
.
- Vice PresidentVice presidentA vice president is an officer in government or business who is below a president in rank. The name comes from the Latin vice meaning 'in place of'. In some countries, the vice president is called the deputy president...
, North American Sales: Dominic Renda, who was instrumental in the establishment and viability of NetObjects Enterprise Division and the achievement of strategic revenue, alliance and account objectives.
- Director of Product DesignProduct design-Introduction:Product design is the process of creating a new product to be sold by a business or enterprise to its customers. It is concerned with the efficient and effective generation and development of ideas through a process that leads to new products.Product designers conceptualize and...
: Victor Zauderer, who had been focusing on developing and designing online systems solutions.
Additionally, Susan Kare
Susan Kare
Susan Kare is an artist and graphic designer who created many of the interface elements for the Apple Macintosh in the 1980s. She was also one of the original employees of NeXT , working as the Creative Director.-Background:Kare was born in Ithaca, New York and is the sister of aerospace engineer...
, who had built many of the interface elements of the Apple Macintosh
Macintosh
The Macintosh , or Mac, is a series of several lines of personal computers designed, developed, and marketed by Apple Inc. The first Macintosh was introduced by Apple's then-chairman Steve Jobs on January 24, 1984; it was the first commercially successful personal computer to feature a mouse and a...
, was a consultant
Consultant
A consultant is a professional who provides professional or expert advice in a particular area such as management, accountancy, the environment, entertainment, technology, law , human resources, marketing, emergency management, food production, medicine, finance, life management, economics, public...
to help design the user interface
User interface
The user interface, in the industrial design field of human–machine interaction, is the space where interaction between humans and machines occurs. The goal of interaction between a human and a machine at the user interface is effective operation and control of the machine, and feedback from the...
of NetObjects Fusion.
Launch of NetObjects Fusion and IPO
NetObjects Fusion 1.0 was released in 1996. As the first complete web design tool it was seen as groundbreaking by technology observers. NetObjects was elected as one of "25 Cool Technology Companies" of 1996 by FortuneFortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
.
Also in 1996, NetObjects Fusion won PC Magazine
PC Magazine
PC Magazine is a computer magazine published by Ziff Davis Publishing Holdings Inc. A print edition was published from 1982 to January 2009...
s Editors' Choice award. CNET
CNET
CNET is a tech media website that publishes news articles, blogs, and podcasts on technology and consumer electronics. Originally founded in 1994 by Halsey Minor and Shelby Bonnie, it was the flagship brand of CNET Networks and became a brand of CBS Interactive through CNET Networks' acquisition...
's Builder.com elected Samir Arora one of the Web Innovators of 1997, and in 1998 NetObjects received the prestigious Gold award from the Industrial Designers Society of America
Industrial Designers Society of America
Industrial Designers Society of America is an organization of professional industrial designers primarily in the United States. Recently IDSA has started chapters in Canada and in China...
(IDSA).
Eleven U.S. patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
s were granted for Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
-related technologies (design
Design
Design as a noun informally refers to a plan or convention for the construction of an object or a system while “to design” refers to making this plan...
and utility).
Releases 2.0 (1997) and 3.0 (1998) of NetObjects Fusion again gained positive reactions by the PC press as well as commercial success on the market. In 1999 IBM brought NetObjects to the stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
with initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
while remaining the major shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
. The initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
(IPO) on NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
raised $72 million.
The board of directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
consisted of six people: Samir Arora as Chairman of the Board, Chief Executive Officer and President, and five directors including John Sculley
John Sculley
John Sculley is an American businessman. Sculley was vice-president and president of PepsiCo , until he became CEO of Apple on April 8, 1983, a position he held until leaving in 1993...
from Apple Computer, three representatives from IBM and one from Novell.
Success on the market and the stock exchange
In the following years numerous product-bundlingProduct bundling
Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business , in the cable television industry Product bundling is a marketing strategy that involves offering several products for sale as...
deals
were made with nearly all the big PC
Personal computer
A personal computer is any general-purpose computer whose size, capabilities, and original sales price make it useful for individuals, and which is intended to be operated directly by an end-user with no intervening computer operator...
sellers like Dell
Dell
Dell, Inc. is an American multinational information technology corporation based in 1 Dell Way, Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest...
and HP, and with Internet service provider
Internet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
s like UUNET
UUNET
UUNET founded in 1987, was one of the largest Internet service providers and one of the nine Tier 1 networks. It was based in Northern Virginia and was the first commercial Internet service provider...
, Earthlink
EarthLink
EarthLink , is an Internet service provider headquartered in Atlanta, Georgia, USA. It claims 1.94 million subscribers.- Business :EarthLink provides a variety of Internet connection types, including dial-up, DSL, satellite, and cable. Both dial-up and high speed Internet access are available...
or 1 & 1 (Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
). The company itself said it licensed the distribution
Distribution (business)
Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
of more than 15 million copies of NetObjects Fusion. In addition, the company sold over 500,000 copies of NetObjects Fusion directly through retail. In 2001 a number of 5 million users worldwide was published.
In 2000 the stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
price of NETO (ticker symbol
Ticker symbol
A stock symbol or ticker symbol is a short abbreviation used to uniquely identify publicly traded shares of a particular stock on a particular stock market. A stock symbol may consist of letters, numbers or a combination of both. "Ticker symbol" refers to the symbols that were printed on the ticker...
) reached its record high of $45 11/16 USD, making NetObjects worth $1.5 billion.
Revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
had started at $7.2 million in 1997, reached $15 million in 1998, $23.2 million in 1999 and peaked at $34.2 million for fiscal year 2000 (October 1999 - September 2000).
On March 3, 2000, TheStreet.com
TheStreet.com
-History:TheStreet.com, Inc., was co-founded in 1996 by Jim Cramer and Martin Peretz. It is traded on the NASDAQ Global Market. The company is headquartered at 14 Wall Street in New York City. Its stock was made public in May 1999 under the direction of past Chairman and Chief Executive Officer...
's Adam Lashinsky praised NetObject's financial performance and its early adoption of e-business:
"And, more so than many start-ups, NetObjects has managed to deliver on what it has promised. It has slightly beaten the expectations of the friendly analystsFinancial analystA financial analyst, securities analyst, research analyst, equity analyst, or investment analyst is a person who performs financial analysis for external or internal clients as a core part of the job.-Job:...
who follow it. And quarter by quarter, it has steadily reduced its operating losses. Plus, it got lucky. It was firmly entrenched as a business-to-businessBusiness-to-businessBusiness-to-business describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer...
software company before the term gained currency and B2BBusiness-to-businessBusiness-to-business describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer...
companies took off."
Challenges and crisis
However, several factors led NetObjects to a crisisCrisis
A crisis is any event that is, or expected to lead to, an unstable and dangerous situation affecting an individual, group, community or whole society...
starting in 2000.
Tough competition
Competition
Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...
from Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, Macromedia
Macromedia
Macromedia was an American graphics and web development software company headquartered in San Francisco, California that produced such products as Flash and Dreamweaver. Its rival, Adobe Systems, acquired Macromedia on December 3, 2005 and controls the line of Macromedia...
and Adobe
Adobe Systems
Adobe Systems Incorporated is an American computer software company founded in 1982 and headquartered in San Jose, California, United States...
put pressure on market share
Market share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
and falling prices of web-design application
Application software
Application software, also known as an application or an "app", is computer software designed to help the user to perform specific tasks. Examples include enterprise software, accounting software, office suites, graphics software and media players. Many application programs deal principally with...
s affected revenues. Also, long-term revenue effects of bundling deals in the software industry
Software industry
The software industry includes businesses involved in the development, maintenance and publication of computer software using any business model...
are controversial.
NetObjects slashed prices for NetObjects Fusion from release 1.0 to release 4.0 by more than 50%. Older versions stayed in distribution for even lower prices.
Technical demands for large business web sites changed and required direct access of programmer
Programmer
A programmer, computer programmer or coder is someone who writes computer software. The term computer programmer can refer to a specialist in one area of computer programming or to a generalist who writes code for many kinds of software. One who practices or professes a formal approach to...
s to HTML
HTML
HyperText Markup Language is the predominant markup language for web pages. HTML elements are the basic building-blocks of webpages....
code
Source code
In computer science, source code is text written using the format and syntax of the programming language that it is being written in. Such a language is specially designed to facilitate the work of computer programmers, who specify the actions to be performed by a computer mostly by writing source...
— which NetObjects Fusion was not designed for.
Its target market were designers who need complete control over page layout
Page layout
Page layout is the part of graphic design that deals in the arrangement and style treatment of elements on a page.- History and development :...
and a similar user interface
Graphical user interface
In computing, a graphical user interface is a type of user interface that allows users to interact with electronic devices with images rather than text commands. GUIs can be used in computers, hand-held devices such as MP3 players, portable media players or gaming devices, household appliances and...
as desktop publishing
Desktop publishing
Desktop publishing is the creation of documents using page layout software on a personal computer.The term has been used for publishing at all levels, from small-circulation documents such as local newsletters to books, magazines and newspapers...
applications.
Shift in strategy
In 1998 the company had developed and since then distributed NetObjects Authoring Suite and the related "Collage" product, which as content management solutionsContent management system
A content management system is a system providing a collection of procedures used to manage work flow in a collaborative environment. These procedures can be manual or computer-based...
were aimed at big businesses and ranged at much higher price levels than NetObjects Fusion.
However, IBM and NetObjects decided that its target market was the sector of small and medium enterprises, so it would focus on its flagship application NetObjects Fusion which would fit within the scope of these customers.
In the beginnings of the concept of "software as a service
Software as a Service
Software as a service , sometimes referred to as "on-demand software," is a software delivery model in which software and its associated data are hosted centrally and are typically accessed by users using a thin client, normally using a web browser over the Internet.SaaS has become a common...
", the company secondly made a bet on its ability to recognize technological trends and coined a strategy shift to a subscription model
Subscription business model
The subscription business model is a business model where a customer must pay a subscription price to have access to the product/service. The model was pioneered by magazines and newspapers, but is now used by many businesses and websites....
. To this end NetObjects Matrix was developed and GoBizGo.com, an e-commerce solution was started. Subscribing web and online services would help small businesses keep pace with the Internet. To finance this shift of strategy, the NetObjects Enterprise Division with 40 employees along with two applications, Collage and NetObjects Authoring Suite, was sold for $18 million to UK-based Merant (merged in 2004 with Serena Software
Serena Software
Serena Software Inc is US-based software company.Serena develops and markets products focused on managing change across information technology environments...
Inc., based in San Mateo, California
San Mateo, California
San Mateo is a city in San Mateo County, California, United States, in the San Francisco Bay Area. With a population of approximately 100,000 , it is one of the larger suburbs on the San Francisco Peninsula, located between Burlingame to the north, Foster City to the east, Belmont to the south,...
).
High hopes were based on the NetObjects Matrix platform and its possibilities to position NetObjects as a "Business Service Provider". A version for Mac was announced, and a cooperation with IBM Global Services was forged. The share price, which already had fallen below 1 US$, doubled on the news of the IBM deal.
IBM decisions and sale of NetObjects
In 2001 revenue streams decreased sharply,a result of changing markets, price cuts, strategy shift, and absent Authoring Suite / Collage sales. Subscription fees from NetObjects Matrix started coming in but the company had to face losses. Total revenues for the first three quarters of FY 2001 were only as much as $4.22 million opposed to total costs of $7.67 million.
While trying to raise an additional $50 million in a private placement with Deutsche Bank
Deutsche Bank
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
, the cash reserves
Reserve (Accounting)
In financial accounting, the term reserve is most commonly used to describe any part of shareholders' equity, except for basic share capital. Sometimes, the term is used instead of the term provision; such a use, however, is inconsistent with the terminology suggested by International Accounting...
started to fade. In the summer of 2001, the markets plummeted with the bursting of the dot.com bubble. The decision of the NASDAQ to de-list NetObjects in August 2001 because the share price had been hovering below $1 for longer than a year made things even worse. Ultimately IBM as the majority shareholder decided to sell NetObjects.
In a message to the user community, CEO Samir Arora had to announce that NetObjects was ceasing operations on September 1, 2001.
NetObjects Fusion, NetObjects Matrix including the MatrixBuilder, BizGoBiz and other assets were sold to Website Pros (now Web.com
Web.com
Web.com, Inc , formerly Interland , was a provider of websites and web services to small businesses and consumers, based in Atlanta, Georgia. Web.com's services included do-it-yourself and professional website design, web hosting, e-commerce, web marketing, and e-mail...
), a web design and services company based in Jacksonville, Florida
Jacksonville, Florida
Jacksonville is the largest city in the U.S. state of Florida in terms of both population and land area, and the largest city by area in the contiguous United States. It is the county seat of Duval County, with which the city government consolidated in 1968...
, for an estimated amount of $4 million, including instant payments as well as fees from future revenues from NetObjects applications and services within three years. (The sum of $4 million was based on assumptions about sales in this three-year period. Depending on real sales the price could in fact be lower or higher up to a limit of $10 million.)
Additionally a portfolio of seven patents was acquired by Macromedia (now Adobe), the distributor of Dreamweaver, the long-term main competitor of NetObjects Fusion.
NetObjects as a division of Website Pros
Website Pros (WSP) (now Web.comWeb.com
Web.com, Inc , formerly Interland , was a provider of websites and web services to small businesses and consumers, based in Atlanta, Georgia. Web.com's services included do-it-yourself and professional website design, web hosting, e-commerce, web marketing, and e-mail...
) went on developing and distributing future versions of NetObjects Fusion and offering subscription services based on this application, representing the mixed business model that was invented at NetObjects.
License revenue from sales of NetObjects Fusion reached nearly $3.58 million in 2006, $2.4 million in 2007, and $2.5 million in 2008. In May 2009 NetObjects Fusion was sold. In the first six months of 2009 "revenue generated by the NetObjects Fusion software business" reached only $428 thousand compared to $1.5 million in the first six months of 2008. Net income for this period was $228 thousand compared to $302 thousand.
NetObjects as a re-established company
In May 2009 NetObjects Inc. was re-established as an independent company. It acquired the NetObjects Fusion product line for "approximately $4.0 million" from Web.com. A smaller part of the amount was transferred instantly, while $3.0 million remained payable from future revenue of NetObjects Fusion sales until 2013. $4.0 million was the same price that was agreed upon between IBM and Website Pros in 2001.In terms of management and staff, there are no overlapping between the old and new companies with the same name. Steve Raubenstine, who was vice president of the NetObjects Fusion division at Web.com (former Website Pros), serves as President and CEO of the new NetObjects Inc.
Main applications of NetObjects
- NetObjects Fusion: web design tool created in 1996, sold to Website Pros (now Web.comWeb.comWeb.com, Inc , formerly Interland , was a provider of websites and web services to small businesses and consumers, based in Atlanta, Georgia. Web.com's services included do-it-yourself and professional website design, web hosting, e-commerce, web marketing, and e-mail...
) in 2001, re-purchased by the new established NetObjects, Inc. in 2009, still distributed. The latest release is version 12, released in December 2010.
- NetObjects Authoring Server, a collaborative Web development and content management solutionContent management systemA content management system is a system providing a collection of procedures used to manage work flow in a collaborative environment. These procedures can be manual or computer-based...
, created in 1999, sold to UK-based Merant in 2000, after Merant's merge in 2004 with Serena Software distributed as "Collage" and discontinued in 2008. The predecessor of this was NetObjects Team Fusion, introduced as a client–server application in 1998.
- NetObjects Matrix, an online Web builder and Web services tool, invented in 2000, sold to Website Pros in 2001. Website Pros, now Web.comWeb.comWeb.com, Inc , formerly Interland , was a provider of websites and web services to small businesses and consumers, based in Atlanta, Georgia. Web.com's services included do-it-yourself and professional website design, web hosting, e-commerce, web marketing, and e-mail...
, relied their website building process for customers on the NetObjects MatrixBuilder platform.