Wow... very interesting Dave. My, my, it's a quickly changing world.
techweb.com
Sun Explains Role In AOL-Netscape Pact
(11/24/98, 2:12 p.m. ET)
By Amy Rogers, Computer Reseller News
Controlling Netscape intellectual property and bringing
Java to the AOL masses. These are Sun's big wins in
the AOL-Netscape-Sun deal announced Tuesday.
Tuesday, executives from Sun finally elaborated on the
company's role in the massive $4.2 billion
AOL-Netscape merger.
Officials repeatedly emphasized Palo Alto, Calif.-based
Sun will control intellectual property and core
competencies jointly developed by Sun and Netscape's
engineering teams, including the continuing development
of Netscape products such as Application Server.
Through the arrangement with AOL, Sun will fill in gaps
in its product suite via "access and ultimate ownership"
of the code that forms the foundation of Netscape
e-commerce and other enterprise applications, Sun
executives said.
In addition, Sun will become a Solaris Sparc systems
platform provider for AOL and its customers.
For these rights, Sun allegedly will pay approximately
$275 million in licensing fees to Dulles, Va.-based
AOL.
On a conference call with financial analysts Tuesday
morning, Sun's chief operating officer Ed Zander
acknowledged it had taken many long nights to hammer
out Sun's role in the merger, but that "five years from
now, we will look back and say, 'This day put Sun on a
new course.' "
"To get AOL to endorse our servers and services is
important," Zander said.
Zander also said Sun enjoys a "big-volume Java win"
with the pact, and that AOL and Sun will collaborate on
the development of personal Java devices, but would
not elaborate. Also, Java technology will be folded into
Netscape's enterprise applications.
Along with AOL, Sun will be exploring options for
getting Java technology into the consumer space,
Zander said.
"AOL gets it, because they want AOL to appear on
any device at any time anywhere in the world," Zander
said. "I think this is good for us and good for Java."
He characterized the deal as a "huge help" in
establishing Java as a middleware standard. The deal
gives Sun "immediate access to Communicator and
Navigator," as well as to Netscape's enterprise
application software.
"This was critical for us," Zander said, adding that Sun
had been working to develop its own browser
technology.
"What really got us going was the ability to work with
the Netscape team in joint development, which allows
us to control the intellectual property and get access to
the [browser's] capabilities," Zander said. "That's the
key of what got us intrigued initially to bootstrap this
effort."
Netscape's acquisition one year ago of Kiva Software
formed the basis of Netscape's Application Server.
Zander alluded to "some overlap" between this product
and the application server Sun got when it acquired
NetDynamics' application server. That deal was
completed just weeks ago.
Zander said going forward, features of both the Kiva
and NetDynamics technology would be developed, but
he would not explain further.
In terms of the companies' channel strategies, Zander
said some Netscape products will be immediately
"pushed through our channel," and Sun is segmenting
approximately 100 people in the company's hardware
and software sales force to focus on selling Netscape
products.
Sun's chief financial officer Mike Lehman said the
company did not want to tip its hand regarding the
impact of the deal on Sun's own R&D budget, which he
said is "holding steady" at $1.2 billion.
====================================================
techweb.com
AOL Finalizes Deals With Netscape, Sun
(11/24/98, 11:25 a.m. ET)
By Reuters
America Online announced Tuesday morning that it
would acquire Netscape in a deal valued at $4.2 billion.
The pact -- which is expected to close in the spring --
calls for Netscape shareholders to receive 0.45 share of
AOL common stock for each share of Netscape.
Dulles, Va.-based AOL also said it had reached a
three-year deal with Sun to develop and market
e-commerce software systems that make it easy for
companies to set up shop on the Internet.
Terms of this second deal call for Sun, in Palo Alto,
Calif., to become a leading computer systems and
service provider to AOL, with AOL committed to
buying $500 million worth of Sun hardware and
services at list prices through the year 2002, for its own
use and the use of its e-commerce partners. In return,
AOL will receive more than $350 million in licensing,
marketing, and advertising fees from Sun, plus
significant minimum revenue commitments, over the next
three years.
AOL said Jim Barksdale, Netscape president and
CEO, will join AOL's board of directors after the
merger with Netscape closes. The statement
announcing the deal gives no details of Netscape's
management structure following the merger or the
impact of the deal on Netscape's work force.
Analysts said AOL would use Sun's Java language to
create a television set-top box-based version of AOL
to compete directly with Microsoft's WebTV Networks
as part of AOL's AOL Anywhere strategy.
Earlier this year, AOL acquired NetChannel, a fledgling
competitor to WebTV based in South San Francisco, in
a move to expand its Internet services into television.
NetChannel had 10,000 subscribers before it shut
down its service because of lack of funds. "AOL
running on a Java screen is the strategy here, whether it
is a handheld device, a pocket computer, a TV, or
cable set-top box," said Richard Doherty, director of
the Envisioneering Group, a consulting firm in Seaford,
N.Y.
"Both companies would like to have the commerce
software, so I am guessing they are negotiating about
that," said Eric Brown, a Forrester Research analyst.
"But the opportunity here for Sun is not to pick up a
few commerce packages, but to find a new opportunity
for the Java platform."
An agreement with AOL, the world's largest online
service, and Netscape would be a huge boost for Sun,
which has yet to enter the consumer market. It also
would be another boon for Java, which had seen its
momentum slow in recent months, due to uncertainties
because of the lawsuit and some product delays.
Sun recently won a major legal victory for Java -- a
popular programming language designed to run on a
wide range of computer systems -- in its contract
lawsuit against its archrival, Microsoft. That case was
closely watched in Washington, where Microsoft's
antitrust trial is taking place.
Last week, a U.S. District Court judge in California
ruled that Microsoft must modify its Windows 98
operating system to conform with Sun's version of Java.
Sun sued Microsoft because it had created variants of
Java that ran only on Windows, thereby destroying
Java's write once, run anywhere promise.
"That ruling helped open the door wider for Sun having
value here," Doherty said of AOL's acquisition talks. |
