Netscape Strikes Key Deal for Its Software
Closing in on a pair of important victories in what promises to be a long war against personal computer software giant Microsoft Corp., Netscape Communications Corp. has licensed its Internet browser software to online provider CompuServe Inc. and says it is on the verge of a similar deal with America Online.
The CompuServe deal will enable that service’s 4.5 million customers to choose among several browsers--including Netscape’s Navigator and Microsoft’s Internet Explorer--for perusing the multimedia portion of the Internet known as the World Wide Web. The agreement obviates the win Microsoft appeared to have achieved through its earlier agreement with CompuServe.
CompuServe will offer Navigator free to customers, but will pay Netscape royalties, making it a multimillion-dollar deal, said Mike Homer, Netscape’s vice president of marketing.
The deal with America Online, the nation’s largest and fastest-growing online service, could be even more important for Netscape. Homer said an agreement was “days away,” and, citing a previous pact with Prodigy Services Co., said it would complete a “clean sweep” of the big three online companies.
Still, Homer indicated that the AOL deal would be similar to the CompuServe agreement, meaning it will be nonexclusive and that AOL might eventually be persuaded to offer Microsoft’s browser too. He also gave no indication that any broader alliance between Netscape and AOL was in the offing, as had recently been rumored.
Microsoft and Netscape are locked in struggle over which will control the software that controls the Internet. Although the browsers are in many cases given away, ownership of the browser that becomes the Internet standard will yield a wide range of potentially profitable advantages--and Netscape currently has an estimated 75% of the market.
“By signing all three of the major online service providers, it gets Netscape into the hands of 10 million customers instantly,” an elated Homer said. After taking a beating in recent weeks as Wall Street worried about increased competition from Microsoft, Netscape’s stock recovered modestly on Friday, rising $1.25 to close at $40 on Nasdaq.
Microsoft declined to comment: “It’s all hearsay right now,” a spokeswoman said.
The Internet is by far the hottest segment of the computer industry now, and companies like Netscape with little revenue or profits have nonetheless attracted tremendous interest from investors. Yahoo!, the designer of a popular software engine for searching the Internet, on Friday became the latest technology company to announce it will go public.
Although Microsoft has been late to the Internet party, its massive resources could yet enable it to overtake Netscape. Recently Microsoft announced a sweeping reorganization aimed at better serving the Internet market and said it would devote a good portion of its $1.5-billion research and development budget next year to Internet products.
Not only does Microsoft give away its browser, it has also been giving away the server software, which runs on the large computers that act as sites on the Web.
Netscape’s win comes at a somewhat embarrassing time for Microsoft. Next week, Microsoft will hold its Internet developers’ conference at San Francisco’s Moscone Center, the same place that Netscape held its developers conference earlier this week.
