|Founded||1995 (closed 2001, re-established 2009)|
Samir Arora, founder
|Products||Web design applications, Content management systems|
|Revenue||$34.2 million USD (2000)|
Number of employees
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 2009 NetObjects was re-established as an independent software company.
- 1 Introduction
- 2 Key positions
- 3 Launch of NetObjects Fusion and IPO
- 4 Success on the market and the stock exchange
- 5 Challenges and crisis
- 6 Shift in strategy
- 7 IBM decisions and sale of NetObjects
- 8 NetObjects as a division of Website Pros
- 9 NetObjects as a re-established company
- 10 Main applications of NetObjects
- 11 References
From 1992 to 1995 the founders of NetObjects had worked at Rae Technology and before that in part at Apple Computer investigating proto-types of web browsers, 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 created by the work of Samir Arora, David Kleinberg, Clement Mok and Sal Arora. and they were awarded the first web site builder patent as inventors.
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.
Key positions in the company were as follows:
- Chairman and Chief Executive Officer (CEO): Samir Arora, 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.
- 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.
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 Fortune. 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).
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.
Success on the market and the stock exchange
In the following years numerous product-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.
"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."
Challenges and crisis
Tough competition from Microsoft, Macromedia and Adobe put pressure on market share and falling prices of web-design applications 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 programmers 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.
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 solutions 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" (SaaS), 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.
IBM decisions and sale of NetObjects
In 2001 revenue decreased sharply, a result of changing markets, price cuts, strategy shift to Software as a Service. Subscription fees from NetObjects Matrix started coming in but the company faced losses: total revenues for the first three quarters of FY 2001 were $4.22 million, whilst costs were $7.67 million.
NetObjects started a raise of an additional $50 million in a private placement with Deutsche Bank, the cash reserves which was not approved by IBM's NetObjects Board. In the summer of 2001, the markets plummeted with the bursting of the dot-com bubble. And ultimately IBM as the majority shareholder decided to sell NetObjects.
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 
NetObjects as a division of Website Pros
Website Pros (WSP) (now Web.com) 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.
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 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.
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.com) 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 solution, 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.com, relied their website building process for customers on the NetObjects MatrixBuilder platform.
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