I wouldn't call $20M "a pittance". At the time Mosaic was an out-of-date POS that was basically worthless in the market.
Well, if you mean at the time of the award, you are correct. Another way to look at it is in terms of the missed opportunities that Spyglass had to endure because their partner hosed them.
Netscape was started by the NCSA Mosaic guys.
Actually, they were two completely separate projects that were worked on by people that originated at UIUC. I won't claim that there weren't similarities (wink wink), but in practice the projects were completely divorced from each other at the time that Netscape went commercial.