In 1997, Eric Raymond published The Cathedral and the Bazaar, a reflective analysis of the hacker community and free software principles.The paper received significant attention in early 1998, and was one factor in motivating Netscape Communications Corporation to release their popular Netscape Communicator Internet suite as free software.
The most prominent and popular example is the GNU General Public License (GPL), which "allows free distribution under the condition that further developments and applications are put under the same licence", thus also free.
The open source label came out of a strategy session held on April 7, 1998 in Palo Alto in reaction to Netscape's January 1998 announcement of a source code release for Navigator (as Mozilla).
Perens attempted to register "open source" as a service mark for the OSI, but that attempt was impractical by trademark standards.
Meanwhile, due to the presentation of Raymond's paper to the upper management at Netscape—Raymond only discovered when he read the Press Release, as the standard or de facto definition.
The Free Software Foundation (FSF), started in 1985, intended the word "free" to mean freedom to distribute (or "free as in free speech") and not freedom from cost (or "free as in free beer").
Since a great deal of free software already was (and still is) free of charge, such free software became associated with zero cost, which seemed anti-commercial.
Richard Stallman of the FSF now flatly opposes the term "Open Source" being applied to what they refer to as "free software".
Although he agrees that the two terms describe "almost the same category of software", Stallman considers equating the terms incorrect and misleading.
They concluded that FSF's social activism was not appealing to companies like Netscape, and looked for a way to rebrand the free software movement to emphasize the business potential of sharing and collaborating on software source code.
The new term they chose was "open source", which was soon adopted by Bruce Perens, publisher Tim O'Reilly, Linus Torvalds, and others.
This source code subsequently became the basis behind Sea Monkey, Mozilla Firefox, Thunderbird and Kompo Zer.