The challenge for Netscape and new ad agency Dahlin Smith White will be to turn a winning marketing strategy-distributing for free Netscape's software to browse the World Wide Web-into a true moneymaker.
"From the start, Netscape has been most adroit at selling the sizzle," said Allen Weiner, analyst at Dataquest, a San Jose, Calif., market research firm.
Netscape, formed in April 1994 by ex-Silicon Graphics chief Jim Clark, rocketed as high as $75 a share on Aug. 9, its first day of trading, before closing at $58.25. That gave the company a market value of $2.2 billion. It was an amazing run for a company that pulled in only $16 million in revenues in the first half of 1995 by selling software for Web servers and commercial versions of its Netscape Navigator Web browser.
What Netscape has sold thus far is image; now what it needs to sell is substance.
"Many, many companies out there would kill to have our visibility," said Mike Homer, VP-marketing. "Now we have to educate people about our products."
Netscape just awarded the creative portion of its account to Dahlin Smith White, the Salt Lake City shop behind "Intel inside." Dahlin's first work is the "Netscape General Store," an electronic catalog on Netscape's home page (http://www.netscape.com) offering everything from software to boxer shorts.
Netscape in the next month will begin its first Dahlin print effort, promoting high-end products in computer publications. The company has no plans for a major consumer ad campaign, Mr. Homer said.
Netscape holds as much as 70% of the Web browser market, but its dominance is not assured. A big challenge could come from Microsoft Corp., which will introduce a Web browser for Windows 95 on Aug. 24.
"I think Microsoft is in a position to mount a formidable push to persuade content providers and users to use their browser," said Josh Bernoff, senior analyst at Forrester Research, Cambridge, Mass.
Alice Z. Cuneo and Jan Jaben contributed to this story.