Cover image for High st@kes, no prisoners : a winner's tale of greed and glory in the Internet wars
High st@kes, no prisoners : a winner's tale of greed and glory in the Internet wars
Ferguson, Charles H.
Personal Author:
First edition.
Publication Information:
New York : Times Business, [1999]

Physical Description:
viii, 392 pages ; 25 cm
Format :


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Material Type
Home Location
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HD9696.2.U63 C354 1999 Adult Non-Fiction Central Closed Stacks

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High Stakes, No Prisonersis a sharp, brilliant insider's account of the way Silicon Valley really works: the sharks, powerful incumbents, and old-boy networks who play hardball all the time and the geniuses who make the products that have changed the world. Charles Ferguson started Vermeer Technologies and turned his very cool, very big idea into FrontPage, the first software product for creating and managing a website. A mere twenty months after starting the company, he sold it to Microsoft for $133 million, making a fortune for himself and his associates. FrontPage now has millions of users and is bundled with Microsoft Office. But getting there wasn't always fun. High Stakes, No Prisonersis the book about the Valley and reflects Ferguson's unique experience not only as a successful entrepreneur but also as a policy analyst, computer industry consultant, and academic. Reveals A Great Internet Success Story High Stakes, No Prisonersis a highly personal account of what it really takes to win as a high-technology startup, especially in the Internet industry, where any speed below warp nine doesn't get you to takeoff. From securing venture capital to getting both the strategy and the technology right, from dealing with Microsoft's power to working with some of the quirkiest, smartest people on the planet, it's all here. The Valley story has never been told with this much depth and honesty. Reports from the Trenches of the Internet Wars Vermeer was right in the middle of the battle between Microsoft and Netscape. Both companies wanted to either acquire Vermeer or kill it. Skewers the Sacred Cows of the Valley Yes, Microsoft declared war on Netscape, but the latter's demise was caused as much by itself as by Microsoft. Ferguson, for example, sees Jim Barksdale, the former CEO of Netscape, as arrogant, ignorant about technology, distracted by politics and glamour, and running a company in partnership with a twenty-three-year-old who'd never held a serious job before." Here's Netscape as it has never before been revealed. Explains the Real Problem with Microsoft Microsoft's business model is unquestionably one of the great creations of American business. But its power has become so great, its behavior so unrestrained, and its abuses so dangerous that intelligent action has to be taken. Ferguson's analysis of what must be done is a major contribution to one of the most important public-policy questions of our time. Silicon Valley is the crown jewel of the American economy and a critical driver of American technology. It's electric, addictive, vulgar, full of brilliance, brutally fair and brutally unfair, fiercely competitive, often dishonest, tremendously exciting, and utterly unique.With High Stakes, No Prisoners, the real story has finally been told--with frankness, insight, and great wit.

Author Notes

Charles H. Ferguson founded Vermeer Technologies with Randy Forgaard in 1993. Previously, he consulted to the White House, many agencies of the U.S. government, and some of the world's leading high-tech companies. He has written for the Harvard Business Review, The New York Times, and Foreign Policy, and is the co-author (with Charles R. Morris) of Computer Wars. He holds a B.A. in mathematics from the University of California, Berkeley, and a Ph.D. in political science from the Massachusetts Institute of Technology. He is a member of the Council on Foreign Relations and currently divides his time between economic policy research and high-technology investing.

Reviews 2

Booklist Review

Are any people left in Silicon Valley who have yet to tell their tale of how they made their millions? Perhaps, but Ferguson's saga should stand out among the many stories that have been told so far. For one thing, he is already the coauthor of a widely praised book on the computer industry, Computer Wars: How the West Can Win in a Post-IBM World (1993). For another, the story of how he started Vermeer Technologies and developed FrontPage software and then sold it is actually interesting. And, finally, Ferguson does not mind saying what he thinks, and what he has to say about people at Netscape, America Online, and Microsoft and in Silicon Valley's thriving legal, public relations, and venture capital communities will certainly raise some eyebrows. Ferguson is a "winner" because, after only 20 months, he sold Vermeer and FrontPage to Bill Gates for $133 million; and he says he plans to donate the earnings from this book to nonprofit educational organizations. --David Rouse

Publisher's Weekly Review

All the characters readers would expect to find in a "behind the scenes" look at what it's like to build and then sell one of the first Internet-related companies are present and fully accounted for in this first-hand account, written by a coauthor of Computer Wars. We see the venture capitalists who are out to maximize their return on investment in the fledgling company at the entrepreneur's expense, the voracious large competitors who threaten to crush it like a bug and the stumbling support professionalsÄeveryone from lawyers to headhuntersÄwho often turn out to be more of a hindrance than a help. Ferguson tells what it was like to create Vermeer Technologies, which produced one of the first software products that made creating Web pages fairly easy, and then sell it to Microsoft for $133 million some 20 months later. While the account is richly detailed, Ferguson's tone is smug and his attitude toward a great many of the people he describes travels the short arc between patronizing and dismissive. The story of Vermeer's creation is bracketed by an overview of the high-tech industry, clearly showing that Ferguson has an interesting view of the issuesÄboth great and smallÄraised by the remarkable growth of the Internet. It's a shame that he didn't give us more perspectiveÄand less invectiveÄon the travails associated with building his company. (Nov.) FYI: The author will donate his earnings from this book to a nonprofit educational organization. (c) Copyright PWxyz, LLC. All rights reserved



"A billion here, a billion there, and pretty soon you're talking about real money." --Senator Everett Dirksen "You are not the kind of guy who would be at a place like this at this time  of the morning. But here you are . . ." --Jay McInerney, the opening lines of Bright Lights, Big City In the late summer of 1993, I got the beginnings of a very cool, very big idea--an idea that could create a huge new industry. After spending the rest of the year timidly thinking of starting a company, I finally decided to try. Randy Forgaard and I shook hands and founded Vermeer Technologies in April of 1994. Barely a month later, we discovered that about two-thirds of my idea was useless--the World Wide Web had gotten there first. However, the Web also seemed to make the remaining portion of my idea even more powerful. We refocused on that and rolled the dice. We secured $4 million in venture capital in February 1995, shipped the first version of the FrontPage product in October 1995, and sold the company to Microsoft in January 1996. It was a wild ride: fascinating, exciting, brutal, tense, unforgettable. Some of it, including my sudden wealth, sometimes feels bizarre. I grew up in a poor family and had finished graduate school thirty thousand dollars in debt only a few years before starting Vermeer. Yet, by the standards of the Internet industry, we barely made it into the middle class. Jeff Bezos of Amazon and Jerry Yang of Yahoo! are each worth billions; five years ago, nobody had heard of either of them. For better or worse, one of the most striking characteristics of American high technology is that sudden riches like this are almost routine. No other industry, in any nation, makes it so easy to start a business, make a difference, get rich--and do it fast. This is not to say that success is easy, or that there are any guarantees. Our principal competitors were Microsoft, America Online (AOL), and Netscape; many of the other start-ups we either competed or partnered with in 1994 and 1995 got killed or were snapped up at fire-sale prices. But if you get it right, the results are staggering. As I write this, FrontPage has already become the industry standard for Web site development software. It has nearly three million users and holds about 70 percent of the world market for Web page development software. A rapidly increasing fraction of the world's Web servers are equipped with FrontPage software. As I had predicted, our technology has become strategically critical to Microsoft. FrontPage is being bundled with the new version of Microsoft Office, and from now on, Office will use FrontPage's technology for posting documents to Web servers. Nobody else has that technology. Since Office has more than 90 percent market share, we can safely assume that within a few years, virtually all Web servers will be FrontPage enabled, and Microsoft will be on its way to securing yet another monopoly. No, this does not make me totally happy, but as you'll see, we had little choice. Netscape under Jim Barksdale was out to lunch, and Microsoft would have killed us if we had tried to go it alone. And yet even Microsoft's power can't suppress the wave of new start-ups driven by the Internet revolution. Despite its many flaws, the Silicon Valley start-up system unquestionably works. It is the crown jewel of the American economy and a critical driver of American high technology. Silicon Valley itself is an amazing place--electric, addictive, vulgar, full of brilliance, brutally fair and brutally unfair, fiercely competitive, often dishonest, tremendously exciting, and utterly unique. It is no coincidence that the Internet revolution is headquartered there. I'd spent a lot of time in the Valley before starting Vermeer, but I had never really appreciated the sheer intensity of the place until my own future, my own fortune, and the careers of fifty other people who had put their faith in me were on the line. I've been fortunate enough to observe and participate in the high technology world from several different angles, and at levels ranging from working-level employee to start-up founder to MIT policy analyst to White House consultant. Highest level is not always best; I learned more by starting Vermeer than I did by testifying before Congress. But I think the combination of these experiences has been extremely valuable and has given me an unusual perspective on high technology and the Internet industry, their effects on the world, and the issues they raise. In fact, government policy has been much more important in shaping the Internet industry than most people realize, and it played a major though indirect role in Vermeer's ultimate fate. Thus, I hope to capture the entire high technology experience in this book: making a start-up really work; raising venture capital; being inside a world-historic revolution; dealing with Microsoft's power, trying to affect White House policy; being forced to deal with the environment that government policy has created. I want to convey the highs and the lows, the electric energy, the brainpower, and the quirky personalities in the Valley, as well as the brutal, ruthless maneuvering that few outsiders ever see. I also want to show how brilliant policymaking by technologists helped create this revolution, and yet how foolish regulatory policies and interest group politics are slowing it down. Consequently this book tells three interconnected stories. The first is a personal account of what it really takes to do a winning high technology start-up, especially in the Internet industry, where any speed below warp nine doesn't even get you to takeoff. When I started this book, I discovered to my surprise that virtually nobody had written about this experience from the inside. Second, I describe the Internet revolution and analyze the strategic war for control of it, particularly the contest between Microsoft and Netscape and its effect on Vermeer. In doing this I combine my firsthand experience with a broad strategic analysis. And finally, I address the large-scale economic and political issues raised by the Internet and the information era: the question of Microsoft's power, the even worse problem presented by telecommunications monopolies, and the new issues of electronic money, privacy, political censorship, and the effects of information technology on the American and global economies. Forgive me; I still have the MIT political scientist lurking inside. From the Trade Paperback edition. Excerpted from High Stakes, No Prisoners: A Winner's Tale of Greed and Glory in the Internet Wars by Charles H. Ferguson All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

Table of Contents

Introductionp. 3
Chapter 1 Starting the Companyp. 16
Chapter 2 The Internet Awakens as the Giants Sleep, 1990-94: The Invention of the Web and Mosaic, Netscape's First Browser, Vermeer Gets a Strategy, and Much, Much Morep. 41
Chapter 3 First-Round Fundingp. 69
Chapter 4 Vermeer, Fall 1994-Summer 1995: Making a Beautiful Machine and Preparing lt for Warp. 102
Chapter 5 The Industry, January-August 1995: Netscape Lights lts Roman Candle, Bill Gates Wakes Up, and AOL Rolls with the Punchp. 135
Chapter 6 Wins and Losses; or, No More Mr. Nice Guyp. 158
Chapter 7 Wins and Losses, Continued; or, Things Get Really Complicatedp. 194
Chapter 8 The Making of a Dealp. 229
Chapter 9 Speaking Ill of the Dead: A Strategic Analysis of Netscape's Failure and the Future of Internet Softwarep. 266
Chapter 10 The Microsoft Questionp. 295
Chapter 11 The Future, and Some Large Questionsp. 330
Acknowledgmentsp. 351
Notesp. 355
Indexp. 373