Jump to content

NetObjects

Add links
From Wikipedia, the free encyclopedia
This is an old revision of this page, as edited by Peter Eisenburger (talk | contribs) at 08:35, 1 October 2006. The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.
(diff) ← Previous revision | Latest revision (diff) | Newer revision → (diff)
NetObjects Inc.
Company typeIncorporation
IndustryInternet, Software
Founded1995 (closed 2001)
HeadquartersRedwood City, California
Key people
Samir Arora, Founder
Productsweb design applications, content management systems
Revenue$34.2 USD (2000)
Number of employees
~240 (2000)
Websitewww.netobjects.com (owner now Website Pros)

NetObjects, Inc. was 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.

NetObjects, Inc. was based in Redwood City, California, and ceased operations in 2001 after selling its assets to Website Pros and a portfolio of patents to Macromedia. NetObjects' main application NetObjects Fusion is still distributed.

Introduction

File:NetObjects Founders.jpg
The founders of NetObjects, Inc. From left: Sal Arora, Clement Mok, Samir Arora, David Kleinberg

From 1992 to 1995 the founders of NetObjects Inc. had worked at Rae Technologies and before that in part at Apple Computer investigating proto-types of web browsers, information navigation and web design tools.

In 1995 NetObjects, Inc. was founded to market NetObjects Fusion, a new design tool to build web sites. The today well-known and wide-spread term “web site” was then yet on the rise and is connected with the work of Samir Arora, David Kleinberg, Clement Mok and Sal Arora.

Initially Netobjects, Inc. was as a privately held company with the Series A venture investment led by Rae Technology, Series B by Norwest Venture Capital and Venrock Associates, followed by Novell, Mitsubishi and AT&T Ventures and the last round by Perseus Capital, L.L.C.. IBM acquired a majority of the company at a valuation of $150 million.

Key positions

Key positions in the company were as follows:

Chairman and Chief Executive Officer: Samir Arora, a muli-talented personality with an Apple Computer and Rae Technology history.

Executive Vice President, Products and Marketing: David Kleinberg, who co-founded Rae Technology with Samir Arora.

Chief Creative Officer: Clement Mok, who is regarded as one of the world's leading interactivity designers.

Vice President of Product Development and Chief Technology Architect: Sal Arora, who was the lead engineer at Rae Technology.

Director of Product Design: Victor Zauderer, who had been focusing on developing and designing online systems solutions.

Additionally Susan Kare, who had built many of the interface elements of the Apple Macintosh, was a consultant to help designing the user interface of NetObjects Fusion.

Successful launch of NetObjects Fusion and IPO

File:NETO 25 cool.jpg
NetObjects leaders and staff in successful times

NetObjects Fusion 1.0 was released in 1996 and was seen as groundbreaking by technology observers.

NetObjects Fusion won PC Magazine’s Editors’ Choice award in 1996. An InfoWorld review cited the cons for the product as insignificant. CNET's Builder.com elected Samir Arora as one of the Web Innovators of the Year 1997. In 1998 NetObjects, Inc. received the prestigious Gold award from IDSA (Industrial Designers Society of America).

Eleven US patents were granted for for Internet-related technologies (design and utility).

Releases 2.0 (1997) and 3.0 (1998) of NetObjects Fusion gained positive reaction by the PC press as well as commercial success at the market. In 1999 IBM brought NetObjects, Inc. to the stock exchange with initial public offering while staying the major shareholder. The IPO on NASDAQ raised $72 million.

The board of directors was 6 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.

Continuing the success story

In the following years numerous bundling deals were made with nearly all the big PC sellers like Dell and HP, and with Internet service providers 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 direct 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 US$ making NetObjects, Inc. worth $1.5 billion.

Revenue had started at $7.2 million in 1997, reached $15 million in 1998, $23.2 mio in 1999 and peaked at $34.2 million for fiscal year 2000 (October, 1999 - September, 2000).

On March 3rd, 2000, TheStreet.com’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 analysts 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-business software company before the term gained currency and B2B companies took off.”[1]

Challenges and crisis

However several factors lead NetObjects, Inc. to a crisis starting in the year 2000. The relation of cost reductions on one side and increasing revenues became difficult to sustain.

Shift in strategy

How would the company react to these challenges?

In 1998 the company had developed and since then successfully distributed NetObjects Authoring Suite and the related “Collage” product, which as modern content management solutions were aimed at big businesses and ranged in a much higher price levels than NetObjects Fusion.

However IBM and NetObjects, Inc. decided that its target market was the sector of small businesses. So it would focus to its flagship application NetObjects Fusion which would perfectly fit in the scope of these customers.

Secondly the company made a bet on its ability to recognize technological trends in their very beginning and coined a strategy shift to a subscription model. To this end NetObjects Matrix was developed. Subscribing web and online services would help small businesses keeping pace with the Internet. Such the consideration of CEO Samir Arora.

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 mio to UK-based Merant (2004 merged with Serena Software, Inc., based in San Mateo, California).

IBM decisions and sale of NetObjects Fusion

In 2001 revenue streams decreased, a inevitable result from changing markets, necessary price cuts, strategy shift, and absent Authoring Suite / Collage sales. In the same year subscription fees from NetObjects Matrix started coming in but couldn’t balance declining revenues in total.

While trying to raise an additional $50 million in a private placement with Deutsche Bank the cash reserves started to fade. In the summer of 2001, the markets plummeted with bursting of the dot.com bubble. The decision of the NASDAQ to de-list NetObjects Inc. in August 2001 because the share price had been hovering below 1 US$ for longer than a year made things even worse. Ultimately IBM as the majority shareholder decided to sell NetObjects, Inc.

In a message to the user community CEO Samir Arora had to announce that NetObjects, Inc. ceased operations on September 1, 2001.[2]

NetObjects Fusion, NetObjects Matrix, BizGoBiz and other assets were sold to Website Pros, Inc., a web design and services company, based in Jacksonville, Florida, USA, for an estimated amount of $4 mio, including instant payments as well as fees from future revenues from NetObjects applications and services within 3 years. (The sum of $4 mio was based on assumptions about sales in this three-year period. Depending on real sales the price could in fact be even less or more up to a limit of $10 mio.)[3]

Additionally a portfolio of seven patents was acquired by Macromedia (now Adobe), the distributor of Dreamweaver, the long-term main competition to NetObjects Fusion.

NetObjects Fusion now

Website Pros (WSP) went on with developing and distributing future versions of NetObjects Fusion and offering subscription services based on this application. In fact the eWorks! and other online services of WSP based on NetObjects technology generated $10.7 million subscription revenue in the second quarter 2006. License revenue from direct sales of NetObjects Fusion to end-customers reached nearly 900,000 US$ in second quarter 2006. [4]

The mixed business model that was invented at NetObjects, Inc. works with the fresh money WSP had in hand as a 1999 venture capital founded company. GAAP net income was $1.4 million in the second quarter 2006.

Main Applications of NetObjects, Inc.

  • NetObjects Matrix, an online Web builder and Web services tool, invented in 2000, sold to Website Pros in 2001, still distributed.

Where are they now?

Samir Arora is the Chairman of the venture capital company Information Capital LLC, which invests in consumer media and tech companies; and also leads Glam Media, Inc..

Dave Kleinberg is CEO of Opelin, Inc., which developes content management tools.

Clement Mok, sold his design consulting service business, Studio Archetype, to Sapient, where he consults with strategic planning on a regular basis.

Sal Arora is leading the future TV platform efforts at Microsoft.

Vic Zauderer is co-founder and co-principal of Zaudhaus Design Group.

Susan Kare is still one of the world’s most wanted independent graphic designers, and is a co-founder of Glam Media, Inc. with Samir Arora.

Other key people involved in NetObjects were: Martin Frid-Nielson, Raj Narayan, Bernard Desarnauts, Mark Patton, Jack Rotolo, Jim Calhoon, Morris Taradalsky and Ernie Cicogna.

Notes

  1. ^ Lashinsky, Adam. "NetObjects Defies Prediction". TheStreet.Com. Retrieved September 24. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
  2. ^ Arora, Samir. "NetObjects Fusion users". netobjects.fusionmx.gen-discuss (Newsgroup). Retrieved September 30. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
  3. ^ "Netobjects Inc · PRE 14C · For 9/30/01". Securities and Exchange Commission, Washington, D.C. Retrieved October 1. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
  4. ^ "Website Pros Reports Record Second Quarter 2006 Financial Results". Website Pros. Retrieved October 1. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
Retrieved from "https://en.wikipedia.org/w/index.php?title=NetObjects&oldid=78837999"