Get ready to ROCK!!!! - from today's WSJ:
Netscape Communications Corp., the once-highflying
Internet-software company that is facing intense
competition from Microsoft Corp., is considering selling
some or all of itself, people familiar with the situation
said.
The Mountain View, Calif., company is holding "serious
discussions" with America Online Inc., Sun
Microsystems Inc., Oracle Corp. and International
Business Machines Corp. about strategic investments in
Netscape or purchasing the entire company, these people
said. AOL, for example, has discussed the possibility of
either taking over or buying Netscape's popular Web site,
they said.
Though no deal is believed to be
imminent, the discussions illustrate
the severity of Netscape's problems,
and a recognition that it may need
outside help in overcoming them.
Netscape, the pioneer in software
used to navigate the Web, has been
rapidly losing market share to
Microsoft, which has waged an
all-out campaign to dominate the
Web-browser market. It is this
campaign that is partly responsible
for the Justice Department's current
antitrust investigation of Microsoft.
A Way to Fight Microsoft
For Microsoft's competitors,
Netscape and Internet-based
technologies are widely seen as the
biggest hope in years to loosen
Microsoft's dominance over computer software.
Peter Currie, Netscape's chief financial officer, declined
to comment, as did Oracle and Sun. Spokesman at IBM
and AOL couldn't immediately be reached.
Rumors about possible acquisitions of Netscape aren't
new, but have become more persistent in the wake of
Netscape's recent report of a loss for its fourth quarter.
Rumors focusing on a possible purchase by Sun helped
drive Netscape's shares up $1.0625 to $19.25 in heavy
trading Wednesday on the Nasdaq Stock Market, giving
the company a market value of $1.86 billion, less than
half its value this summer.
Netscape helped prompt the Justice Department's current
suit against Microsoft. It is part of an informal
anti-Microsoft cabal that includes IBM; Sun, the
Mountain View, Calif., computer maker; database
software giant Oracle and Novell Inc., the leading
supplier of networking software. Those four companies
are likely to go to great lengths to make sure that
Netscape doesn't fail, analysts say, though it is not clear
any would be willing to take on a complete acquisition of
the company.
Each of those companies have Internet-related businesses
that could benefit from alliances with Netscape. Sun, for
example, has worked with Netscape to help popularize a
programming technology called Java that is seen as an
alternative standard to Microsoft's Windows technology.
Recently, however, Netscape has decided to scale back
its own development of Java technology for its browser
software, opting to let Sun handle future updates. Sun, in
theory, could seek a renewed commitment to Java in a
future Netscape deal.
The Ties to AOL
AOL, the No. 1 on-line service, has had a more complex
-- and sometimes tumultuous -- relationship with
Netscape. Before Netscape went public in 1995, AOL's
chairman and chief executive officer, Steve Case, had
wanted to make a significant investment in the company,
but was rebuffed, people familiar with the situation say.
Mr. Case made several unsuccessful attempts to make a
deal with Netscape to program Netscape's Web page.
Also, Mr. Case had wanted to be on Netscape's board.
Later, AOL chose Microsoft's browser over Netscape's
in a deal that was a significant blow to the software
company's market share.
AOL is now believed to be most interested in exploiting
the popularity of Netscape's Web site, particularly among
business customers. AOL is trying to build up its
resources to compete with Microsoft, Yahoo! Inc. and
others to create Internet sites that serve as generalized
portals to the Web.
Netscape Chief Executive Jim Barksdale is leading the
evaluation of Netscape's current alternatives, using his
wide-ranging contacts within the technology industry,
people familiar with the matter said. He is being helped
in this effort by Morgan Stanley, Dean Witter, Discover
& Co. which was one of the investment banks involved in
Netscape's public offering. |
