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> the day that we turned on Netscape. It turns out we didn't have enough server capacity, so we turned down Google so that we could serve the traffic from Netscape.

What is this referring to?

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Google started providing search results for the Netscape browser. Google didn't have enough server capacity to provide fast search results for normal www.google.com traffic and the new Netscape browser search traffic, so they started dropping queries to www.google.com until they could increase performance.

i.e. they put their customer, Netscape, ahead of their own website's performance.

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