NSCP - will go up all week... Wednesday November 18 7:02 PM ET
AOL, Netscape Talk Browser Deal
By DALE HOPPER Associated Press Writer
SPRINGFIELD, Va. (AP) - America Online Inc. (NYSE:AOL - news), the world's largest online provider, is reportedly negotiating with Netscape Communications Corp. (Nasdaq:NSCP - news) for a new Internet browser to replace or join its current Microsoft browser.
AOL's exclusive contract to use Microsoft Corp. (Nasdaq:MSFT - news)'s browser on its online service expires in January. The Wall Street Journal said Wednesday that Dulles, Va.-based AOL is negotiating with Netscape, which lost out to Microsoft when the original deal was created in 1996.
''It makes sense for AOL to go out and do some talks,'' said Paul Hagen, an industry analyst with Forrester Research. ''Netscape has tremendous incentive to win back market share, which gives AOL leverage.''
AOL spokeswoman Tricia Primrose said she could not comment on the story.
Under the contract, Microsoft's Internet Explorer is the default browser for AOL users. In turn, the Windows operating system comes with AOL software preloaded, making it available with just a click.
Microsoft won out over Netscape because it promised to put AOL's logo on Windows, AOL senior vice president David Colburn said during the ongoing Microsoft antitrust trial in Washington, D.C.
AOL is reconsidering its competitive relationship with Microsoft and may not want to be so closely aligned, people familiar with the negotiations told The Journal.
Jody Kramer, a spokeswoman for Mountain View, Calif.-based Netscape, also would not comment on The Journal's report but said the two companies have been working closely for about a year and already made two deals, one this month.
As a result of the most recent deal, AOL provides a version of its Digital Cities program through Netscape's Netcenter Web site. Digital Cities is a program that lets users find information on several dozen cities.
The first deal was reached in October 1997, when the companies agreed to share an instant messaging component so customers using AOL can communicate with those using the Netscape browser.
''You compete in some areas and you partner in others,'' Ms. Kramer said of Netscape's relationship with AOL.
Shares of both companies reacted favorably to the news. America Online was the most actively traded stock on the New York Stock Exchange, closing up $8.371/2 to $83.75 on the New York Stock Exchange.
Netscape was the most active stock on the Nasdaq Stock Market, finishing up $10 to $39.25.
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