Netscape, GE to Conduct Electronic Venture

Aiming to speed the transformation of the Internet from a haven for techies into a useful tool for businesses, Netscape Communications Corp. and General Electric Information Services today will announce the formation of a joint venture targeting electronic commerce.

Actra Business Systems L.L.C., as the new company will be called, is to be funded equally by Netscape and GE, though neither side would disclose the amount of their investment. Both companies will initially lend staff to the new venture, which will be housed near Netscape’s Mountain View, Calif., headquarters and led by its senior vice president of new ventures, Jim Sha.

They will develop products for electronic document interchange, or EDI--the transfer of commerce-related documents, such as purchase orders or invoices, via computer networks from one business to another.

The market for EDI products and services is said to be worth about $3.5 billion, with more than 100,000 companies using EDI to conduct business transactions. GE Information Services, which is estimated to have done $700 million in sales last year, is the leading provider of those systems.

But the costs for installing an EDI system--developing software so that one company’s computers can talk to another’s--can be prohibitively expensive for many potential customers. The Internet, which is a public, standards-based computer network, is expected to make electronic document interchange simpler and cheaper.

However, use of the Internet to create EDI systems has been slow. “The security of the Internet has been inadequate and there’s this feeling that even if you could secure a transaction, you don’t know when it’s going to make it to the proper destination or even if,” said Stan Lepeak, an analyst for the META Group, a Stamford, Conn. market research firm.