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Netscape, AOL shares surge on report of browser talks
By Duncan Martell
SAN FRANCISCO, Nov 18 (Reuters) - America Online and Netscape stocks surged on Wednesday after a published report that the two Internet powers were in talks that could lead to the No. 1 online service using Netscape's browser instead of archrival Microsoft's.
America Online Inc. stock hit $83.75 before settling back to $83, up $7.625, in late afternoon composite trading on the New York Stock Exchange, where it was the most active issue on volume of nearly 17 million shares. It was an all-time high for the stock on a split-adjusted basis.
Netscape Communications Corp. shot up $7.75 to $37 on Nasdaq. It was the most traded share on any exchange on volume of nearly 25 million issues.
The Wall Street Journal, citing people familiar with the situation, reported that the discussions involved high-level executives from both companies during the last two months, but were still continuing and might not lead to a final deal.
Dulles, Va.-based AOL (NYSE:AOL - news) and Mountain View, Calif.-based Netscape(Nasdaq:NSCP - news) declined to comment on the report. While also declining to comment, AOL Chairman Steve Case, told Reuters, ''We do have a relationship with Microsoft,'' and added that AOL was happy to have Microsoft as a partner.
A Netscape source said Netscape has had discussions for the past 2-1/2 years aimed at getting its browser embedded into AOL's online service, the world's largest with more than 14 million members. Since 1996, Microsoft Corp.'s Internet Explorer has been the browser used by AOL for customers to access the Web.
Case said in the interview that the deal to integrate Internet Explorer with AOL's software and having AOL as a feature on the Microsoft desktop had been crucial to fueling AOL's growth.
Analysts said the antitrust trial against software giant Microsoft now taking place in Washington, coupled with AOL's right to terminate the deal with Microsoft at the end of December, could be emboldening Netscape to turn up the heat.
''Obviously, Netscape is trying to press its advantage,'' Jim Balderston, an analyst at Zona Research said. ''The fear of Microsoft retaliation may be diminished because of the government's lawsuit against Microsoft.''
In the past year, Netscape -- which pioneered the World Wide Web browser -- has recast itself as more of a so-called ''portal'' to the Internet with its Netcenter Web site (http://home.netscape.com).
Netscape once had the lion's share of the browser market, but after Microsoft started giving away its software and wooing big customers in late 1995, Netscape's market share plunged.
If Netscape and AOL were to strike a deal under which Netscape becomes the browser for AOL's members, it could give a huge boost to Netcenter's page views, industry parlance for how many people access a given Web site, analysts said.
''The real activity now at Netscape is Netcenter,'' Balderston said. ''If they do land the AOL deal, it could change the perception that Netscape is dead in the water and may still indeed be a vibrant and meaningful player in the Internet.'' |
