Street taken aback by Netscape loss news.com
More analysis and head scratching.
The company had cited pricing pressure from Microsoft and IBM's Lotus as pulling down its enterprise-related sales.
Kiggen pointed out that large deals in the enterprise space are negotiated on an individual basis, ruling out a scenario in which Microsoft or IBM had come in with a list price that undercut Netscape. Nevertheless, he said, "These are big companies that use any given number of measures to win business, including...price."
Although demand for Netscape's products remains strong, Kiggen said the problem the company is facing stem from an inability to close deals. He said that some of the deals the company had in the pipeline at the close of the fourth quarter may now slide over into the first quarter, while others may be lost altogether to competitors.
What's the solution? Free Software!
During a conference call with analysts, Smith said Jim Barksdale, Netscape chief executive, strongly indicated that the company would make its browser available for free during the next few weeks, a move that would follow in the footpath of Microsoft's efforts in the browser space.
Although Smith applauds that strategy, he estimates it will cut out more than 20 percent of the company's revenues. A shift toward free browsers would not only affect the revenues generated from the company's standalone products, he said, but also would affect bundled products that may get repriced downward.
I don't know. There's always IBM waiting in the wings, I guess. They could follow Bill Fischofer's recommendation of buying Netscape, then shutting it down. Or something.
Cheers, Dan. |
