Earnings Are Up, New Products Are Out
New Netscape Climbs Back
By Michael J. Martinez
ABCNEWS.com
Aug. 18 - When Netscape decided to give away its
Navigator Web browser earlier this year, most
analysts thought the company was a goner, victim
of an intense market battle against the software
Goliath that Microsoft has become.
Think again. Contrary to popular perceptions, Netscape
is no longer just a browser company.
Over the past 18 months, Netscape Communications has
radically transformed its focus from making Web browsers to
developing enterprise software for businesses and creating a
portal site on the Web. And after one shaky quarter last year,
the company is now breaking even.
"I can't say that this was our plan three or four years
ago," says Steve Savigano, vice president and general
manager of Netscape's business applications division. "But it
hasn't been forced. It's a natural integration."
Adapting to a New Market
Although Netscape started producing business application
and server software as early as 1996, it was still primarily
dependent on revenues from the consumer versions of
Navigator and Communicator. However, with the
introduction of Microsoft Internet Explorer 3.0, Netscape
began steadily losing its position atop of the browser market.
"Revamping the company around the server was a good
idea," says Forrester Research analyst Ted Schadler. "It was
something they had already started doing, and for an Internet
company, it made sense."
So instead of working to provide the window for users to
look at the Internet, Netscape broadened its focus to include
software which uses that window to look at other things.
"It's a natural progression from our core technologies,"
Savigano says.
Netscape today markets a wide variety of server
software. Its premier product, SuiteSpot 3.5, provides
scheduling, messaging and other server-based applications,
as well as system management tools. And since server
software was one of the first new ventures Netscape engaged
in, it helped bail the company out when revenue from
Navigator fell out from under it, according to John Paul,
senior vice president in charge of the server division.
"Beginning in October of '96, the revenue from the server
division has gone up every quarter," Paul says. "Even if, at
that time, you took all that browser revenue away, you'd still
call us the fastest-growing enterprise software company in the
world."
The Portal Piece
So Netscape had the infrastructure and the applications. But
where does a commercial portal site fit in with such
business-oriented products?
Originally, Netcenter was just a place you went to
download Netscape products such as Navigator. When
Netscape was casting about for a new direction, the site
immediately came to mind, especially since it already had high
traffic.
"We were touching lots of users every day, but had to get
them to want to come back to us," says Jerald Jimerson, vice
president in charge of Netcenter's content.
So the search engine, actually an amalgamation of
numerous different engines, came online. Then there were
limited content channels, mostly devoted to computing. But
earlier this year Netcenter was ratcheted up from a corporate
site to a full-blown portal. And unlike most other portals,
Netcenter already turns a profit.
Completing the Cycle
Navigator, like the upcoming Communicator 4.5, is designed
to drive traffic to the portal site. And since Navigator remains
among the most popular personal computing applications
ever, that means a lot of people are likely to see Netcenter at
least once in their lives.
For the future, Netscape wants to involve businesses in
growing the site, as well as providing its customers with their
own private portals. A recent deal with CitiCorp illustrates a
part of the strategy. After agreeing in May to license
Netscape's commerce software, the banking giant announced
last week that it would launch a co-branded personal finance
channel on Netcenter, coming this fall.
Eventually, Jimerson says, large corporations could not
only advertise or create content on Netcenter, but also create
individualized Netcenters for their internal use-like individual
corporate portal sites.
"That will complete the cycle," Jimerson says. "That'll
mean Netscape got them running with the server, gave them
applications and got them talking on the Internet
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