Netscape Rolls Out Upgrades for Portal Race
Moving ahead with a strategy to become the leading Internet destination, Netscape Communications Corp. today will announce improvements to its Communicator software suite and the Netcenter Web portal.
Portal sites combine specialized content, free e-mail, chat services and a variety of retail and consumer offers to draw users into making the site their starting point and principal destination on the Web. Like America Online, Yahoo, Excite, Microsoft and other Internet companies, Mountain View, Calif.-based Netscape hopes to create a highly profitable, long-term business based on Netcenter ad revenue and commercial transactions.
But analysts said that the leading provider of Web browsing software still lags behind key competitors in building services and brand recognition.
Netscape added a new Internet browsing tool to its “preview” version of Communicator 4.5, available free at its Web site beginning today. The final version will be released this fall, according to the company. The “Smart Browsing” features should make it easier to find Web sites by using keywords and other methods to simplify arcane Web addresses. It will also help steer users to content on the Netcenter site (https://www.netcenter.com).
A new e-mail feature allows users to connect with Netcenter from any computer equipped with Netscape’s browser, then access personal Web site lists, address books and e-mail messages. Users can synchronize that information on work, home and notebook computers--a boon to telecommuters and frequent travelers.
“What they’re doing goes well beyond the services available from any other portal site,” said Tim Sloane, an Internet analyst with the Aberdeen Group in Boston.
Sloane said Netscape may be able to use its e-mail and browsing tools in two ways: to attract traffic to its site and sell businesses the underlying enabling technologies for use in corporate networks. Large corporations with many remote users are looking for easier ways to synchronize and manage e-mail and related services.
Smart browsing “brings Netcenter content and functionality into the browser itself, so it remains with users as they travel the Net,” said Chris Charron, an analyst with Forrester Research in Boston.
“People are accusing [Microsoft] of using its operating system dominance to improve its browser share and get into the media business,” Charron added. “Netscape is doing essentially the same thing--using its browser dominance to promote its [portal].”
In the next 90 days, Netscape also plans to announce a range of other services at Netcenter, including a deal with a major telecommunications company designed to unify voicemail, paging, fax and e-mail messages within one system, said Netscape Executive Vice President Mike Homer.
Netscape made about as much in portal revenues as Santa Clara-based Yahoo (https://www.yahoo.com) in the last quarter. But it’s viewed as well behind Yahoo and others in the race to solidify a grip on consumers who click on ads and spend money online.
Part of the problem has been Netscape’s historical orientation toward business users--a legacy of its reliance on the sale of expensive server software for managing Web sites and intranets, which are internal corporate networks that use Web technology. And, said Charron, Netscape’s portal revenues are dependent on fees from Web search engines owned by Excite, Infoseek and others--Netcenter’s direct portal competitors.
“Does Netscape get traffic? Yes, because of the browser, primarily,” Charron said. “Do they make money on their so-called portal? Yes, primarily because the search engines have paid them money to be on Netscape. But the other players have built billion-dollar brands on the back of Netscape.”
As those companies grow their own portal sites, which already boast better-developed consumer content than Netcenter, they will depend on Netscape less and less for traffic--a process that is already well underway.
“Is there any allegiance to Netcenter? Are people spending time on Netcenter? No,” Charron said. “The presence of so many search names on the Netcenter home page dilutes the Netcenter brand.”
However, Netscape has made progress in building the content on its site. Recent additions include yellow and white page directories provided by Redmond, Wash.-based InfoSpace, computer information from CNet and headlines from ABC News.
That content, combined with the technologies to be announced today, shows that Netscape is finally using the tremendous traffic to its home page--the default home page for Netscape browser users--and gearing it toward the consumer market, said Patrick Keane, an analyst with Jupiter Communications in New York.
But to catch its rivals in the portal business, it must build the Netcenter brand, Keane added. “Advertising and sponsorship are what’s floating the boat on the Web today.”
That’s why Netcenter may succeed or fail on the strength of consumer content and brand marketing. Both efforts depend on securing partnerships with major content providers. Compelling entertainment and news will be needed to draw consumers into the site’s shopping and advertising, while deals that include or facilitate access to media companies’ programming is fast becoming a prerequisite for success.
In the last month, Disney purchased a major stake in Sunnyvale-based Infoseek (https:// www.infoseek.com), and NBC bought into Snap (https://www .snap.com), a portal created by CNet of San Francisco.
Hoping to avoid being eclipsed by those deals, Netscape said it will announce major media partnerships in the next 90 days.
Netscape shares fell $2.06 to close at $31.44 on Nasdaq.
