FWIW for the new people in the thread I'll post this information again:
Netscape's grand strategy
By Tim Clark and Paul Festa
Staff Writers, CNET NEWS.COM
June 4, 1998, 5:15 p.m. PT
SAN FRANCISCO--Netscape executives today
outlined their vision for the company's future,
describing hoped-for synergies in its three disparate
businesses: enterprise software, e-commerce
software, and its popular Netcenter Web site.
In presentations that at
times sounded like mea
culpas for Netscape's
past strategic shifts,
cofounder Marc
Andreessen, CEO Jim
Barksdale, and Netcenter
chief Mike Homer
outlined plans to link its
e-commerce software business with its Web site by
sending some of its 7 million daily Netcenter visitors
to commerce sites built with Netscape software.
"The enterprise software business and the portal
service business are coming together," Barksdale
said. "This convergence is where the best
opportunities are based. Netscape has some unique
competitive advantages that come from being in
these two businesses at the outset of this
convergence.
"We call it the flash point, the takeoff for the Net
economy," he added.
But the company provided very few examples of
how Netscape can generate new revenue from
these separate businesses, a key requirement since
Netscape earlier this year decided to give away its
Web browsers and the source code behind them for
free.
Andreessen pointed to the Travelocity site, built with
Netscape technology and promoted with links from
Netscape's home age. Homer hinted that Citibank,
which signed a high-profile, $20 million-plus contract
for e-commerce software, would be a key
contributor to the financial services Netscape plans
to host on its site.
Analysts declared that the company's e-commerce
message was compelling, but they stressed that the
proof would be in the execution.
"It was the most cohesive message I've heard from
them in '98," said Daniel Rimer, analyst with
Hambrecht & Quist. "They demonstrated
convincingly that they've broken free from reliance
on the browser revenue. Now they have to show
how they can capitalize off the advantage they have
in browser market share and integrate their server
software, e-commerce, and browser businesses."
Rimer noted that many large Internet companies still
prefer to use homegrown solutions, citing
Amazon.com, which uses certain Netscape products
but not the integrated solution Netscape hopes to
sell.
But Netscape might get its foot in the door with one
product, then sell an integrated strategy further down
the line.
"Their strategy is very innovative in that they're not
trying to go directly up against competitors," said Phil
Schacter, analyst with the Burton Group. "Instead,
they're going into a company like Ford, which
already uses Novell NetWare for their intranet, and
sell Ford their e-commerce solution. Then, Ford may
find later that Netscape is the right one to host the
intranet too."
One cloud on Netscape's horizon is the upcoming
integration of Microsoft's Internet Explorer browser
with its Windows 98 operating system. Netscape's
once-overwhelming lead in browser market share
has fallen to just over 50 percent in recent months.
Homer today said browser market share has
stabilized as a result of both the Justice
Department's antitrust actions against Microsoft and
Netscape's own decision to give away its browser
and the source code behind it.
How much will Windows 98's release hurt
Navigator? "We're going to have to wait a while
before we really can find out," Rimer said. "There's
always a lag between bundling and deployment. But
it could have a pretty significant impact."
Netscape is embarking on integration of its own,
strengthening links between Navigator browsing
technologies and Netcenter services.
"This means that users are always one click away
from Netcenter," Homer said. Personalization
services on Netcenter will let "My Netscape" users
visit a personalized home page as their start page.
Homer outlined a series of new Netcenter services
for both consumers and business users. In future
telecommunications offerings, users could sign up for
long distance phone deals online, get billed and pay
those bills from Netscape's site, and Netscape would
collect a lucrative finders' fee.
In financial services, the company plans to add
online billing services, branded credit and corporate
procurement cards, and an expanded membership
program. In addition, it says it will let members store
their address book and personal financial data on
Netscape's site.
"We aren't going to do content--there isn't a
Netscape Studios," Homer said, alluding to America
Online's content efforts. Instead, Netcenter is
partnering with information providers in 17
categories, doing deals in areas it deems
strategic--computing, business, news, and sports,
among others--and relying on partner Excite for
other content.
Homer also reiterated Netscape plans to host online
trading communities where companies could get
good prices on office supplies, computers, and
industrial materials.
Overall, the message from today's briefing was that
four-year-old Netscape is a grown-up now, ready to
play in the mission-critical software arena for
customers that need innovative software that can
scale to huge numbers of users.
Andreessen pointed to Netscape's consulting force
of 300 and growing relationships with Andersen
Consulting and other systems integrators.
But Dataquest analyst Alan Weiner said that in the
consulting arena, Netscape still lacks the years of
experience and goodwill with corporate customers
that established consulting firms have nurtured over
decades.
In its enterprise emphasis, Andreessen added
Netscape is running into competitors like IBM, Sun
Microsystems, and, of course Microsoft.
Andreessen placed groupware--where Netscape in
the past made a major effort--as an area no longer
of interest to the company. Also largely outside
Netscape's current emphasis: small and mid-sized
businesses and desktop software for mass markets.
In other news at the event, Netscape announced the
following:
It will launch its first broad-based ad campaign,
using success stories of its customers.
The company signed a deal with Sun for one-stop
support for both Sun and Netscape products on the
Solaris platform.
Netscape said 25 software developers are now
supporting its application server.
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