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Microsoft also targeted other Netscape products with free workalikes, such as the Internet Information Server (IIS), a web server which was bundled with Windows NT. Meanwhile, Netscape faced increasing criticism for the bugs in its products; critics claimed that the company suffered from 'featuritis' – putting a higher priority on adding new features than on making them work properly.

This was particularly true with Netscape Navigator 2, which was only on the market for 5 months in early 1996 before being replaced by Netscape Navigator 3.

The stock's value soared to US during the first day of trading, nearly a record for first-day gain.

The stock closed at US.25, which gave Netscape a market value of US.9 billion.

The tide of public opinion, having once lauded Netscape as the David to Microsoft's Goliath, steadily turned negative, especially when Netscape experienced its first bad quarter at the end of 1997 and underwent a large round of lay-offs in January 1998.

Later, former Netscape executives Mike Homer and Peter Currie described the period as "hectic and crazy" and that the company was undone by factors both internal and external.

This period of time became known as the browser wars, in which Netscape Communicator and Internet Explorer added many new features and went through many version numbers (not always in a logical fashion) in attempts to outdo each other.But Internet Explorer had the upper hand, as the amount of manpower and capital dedicated to it eventually surpassed the resources available in Netscape's entire business.By version 3.0, IE was roughly a feature-for-feature equivalent of Netscape Communicator, and by version 4.0, it was generally considered to be more stable on Windows than on the Macintosh platform. Netscape Navigator was not free to the general public until January 1998, while Internet Explorer and IIS have always been free or came bundled with an operating system and/or other applications.Netscape Communications wants you to forget all the highway metaphors you've ever heard about the Internet.Instead, think about an encyclopedia—one with unlimited, graphically rich pages, connections to E-mail and files, and access to Internet newsgroups and online shopping.

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While it was unusual for a company to go public prior to becoming profitable, Netscape's revenues had, in fact, doubled every quarter in 1995.