The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Thursday, August 10, 1995              TAG: 9508100449
DATELINE: NEW YORK                           LENGTH: Medium:   81 lines


Netscape Communications Corp., which has given away software that makes the Internet useful, roared onto the stock market Wednesday under such heavy demand that its share price doubled and its overall value shot past some of high technology's biggest names.

Netscape's stock, offered at $28, opened at $71, rose as high as $75 and then tumbled as low as $53.75. It closed regular trading at $58.25 on the Nasdaq Stock Market.

At that price, Netscape's market value was $2.9 billion, close to that of Dell Computer Corp. and greater than firms like AST Research Inc., Broderbund Software Inc. and Gateway 2000 Inc.

Nearly 14 million shares were traded, almost three times the 5 million shares that were issued.

The debut was the most stunning Wall Street has seen since Boston Chicken Inc. went public in November 1993 for $20 and traded as high as $51 on its first day.

To many investors, Netscape represented the chance to get in at the start of another technology dynasty like Apple Computer Inc., Oracle Corp. or Microsoft.

``There are a lot of people who want to own the stock regardless of the valuation,'' said Kathleen Smith, analyst at Renaissance Capital Corp. in Greenwich, Conn. ``They see this as the Microsoft of the Internet.''

The company makes a program called Netscape Navigator, which allows people who use personal computers to very simply access and manipulate information on the World Wide Web portion of the Internet, the global public data network.

From a financial standpoint, the company is the fastest software start-up ever. It had $700,000 in sales from its inception in April 1994 through December. During the first six months of this year, sales were $16.6 million and its losses narrowed. Netscape may turn profitable by the end of the year.

Nonetheless, as the sell-off through the afternoon seemed to reflect, it may take some time to be worth nearly $3 billion.

``Can one imagine a scenario where the company gets to be big enough to justify a valuation like that? Yes,'' said Roger McNamee of Integral Capital Partners, a Silicon Valley investment firm. ``How many years will that take? That's the question.''

Netscape faces several competitors in a market that has had wide attention for just a year. But it allowed people to freely download its software, giving it more than 7 million customers, representing 70 percent of the people who use the Web.

Netscape recently began selling a $40 version of Navigator in stores for people who don't wish to mess with the technicalities of a download on the Internet.

It has also started selling versions that help companies perform specific communications tasks through the Internet or their own internal networks. That's raised the prospect that Netscape could play an essential role in computers in the manner of Microsoft's Windows operating system or the Notes productivity program of IBM's Lotus Development Corp.

The company was formed in April 1994 by James H. Clark, founder and former chairman of Silicon Graphics Inc., and Marc Andreessen, who was then a 22-year-old graduate student at the University of Illinois.

Andreessen and several other students who joined the company were the leading designers of Mosaic, the first graphical Web-browsing program that was easy for novices to install on personal computers.

The University of Illinois, which owns the rights to Mosaic, has licensed the program to Netscape and several other companies, including Spyglass Inc., which jumped from $17 into the $40-range when it became public in June. Its shares traded as high as $54 Wednesday before closing at $43.25, down $6 on the Nasdaq Stock Market.

Clark's 26.5 percent stake in Netscape, worth $272 million at $28 per share, was worth just over $565.8 million at the close of Wednesday's trading. Andreessen's 2.7 percent stake was worth about $58 million.

Several other early investors - including venture capitalist L. John Doerr and Adobe Systems Inc. chairman John E. Warnock - also profited from the day's trading.

Adobe, Tele-Communications Inc., Times Mirror Co., Knight Ridder Inc. and Hearst Corp. were also early investors in Netscape. by CNB