Case #1609.0

Negotiating the Internet: A Start-Up's Path through the Online World

Publication Date: October 01, 2001
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This case explores negotiations strategy through the dramatic story of one company's contribution in the early 1990s to the refinement of the World Wide Web and the decisions its founders faced as they considered whether to remain independent or sell their technology to a larger firm. It focuses on Johnson-Grace Inc., a small, start-up firm that believes it can develop a powerful new "compression technology" that will allow the Internet to be used to send large amounts of information and extensive images in a way far more efficient than previously available. The case captures one story in what may come to be viewed as an historic era of growth and entrepreneurship, as it follows founders Chris Grace and Steve Johnson through the start-up process--at first seeking capital, later seeking an alliance with a larger firm. When Johnson-Grace successfully develops its new technology, however, it faces a complex negotiation with one of the most important players in the new Internet world--America On Line and its founder, Steve Case. As the prospect of America On Line buying out Johnson-Grace takes shape, a series of high-stakes negotiations tactics come into play, centered both on whether a deal would occur and what form it would take. Ultimately (as revealed only in the Epilogue, 1609.1), Johnson and Grace become part of the new generation of Internet millionaires.

Other Details

Case Author:
Melanie Hurley
Faculty Lead:
Richard J. Zeckhauser
Pages (incl. exhibits):
United States