Surprising similarities may smooth Netscape-AOL cultural rifts. By David E. Kalish, Associated Press Writer, ZDNNMarch 17, 1999 8:47 AM PT
MOUNTAIN VIEW, Calif. -- Shortly after America Online Inc. revealed it would buy Netscape Communications Corp., AOL chairman Steve Case flew out to the Web software pioneer's headquarters to address its workers. The subject was hairy. "You can still bring your dogs to work," he told a cheering crowd of 2,000 Netscape employees.
That comment, related by several attendees, seemed no small concession from a company whose cautious corporate culture, some feared, could snuff out the freewheeling creativity of Netscape (Nasdaq:NSCP).
AOL-Netscape take a leap of faith
"You can still bring your dogs to work," he told a cheering crowd of 2,000 Netscape employees.
That comment, related by several attendees, seemed no small concession from a company whose cautious corporate culture, some feared, could snuff out the freewheeling creativity of Netscape (Nasdaq:NSCP).
Netscape shareholders voted this morning to approve the $9.9 billion deal. But the real work in combining these very different companies is just starting.
A common goal: Fight Microsoft
AOL's (NYSE:AOL) ability to soothe Netscape's coveted army of software designers is key to creating what could be a powerful new threat to Microsoft's (Nasdaq:MSFT) computer software dominance.
Once the deal is completed, AOL becomes the distributor of Netscape's Internet browser software and adds the Netcenter Web site, giving it two of the four most popular Internet destinations. Also part of the deal, Sun Microsystems Inc., a maker of business software and computers, will distribute Netscape's corporate software for three years.
So far, AOL's assurances to Netscape staff appear to be working. Common goals, such as making the Internet easy to navigate, are helping to bridge the divide of culture and distance.
A good deal?
Relatively few Netscape employees have quit since the Nov. 24 agreement, thanks in part to Case's promise to pay an extra month's salary as a bonus for sticking around. Others are waiting for Netscape stock options to take effect so they can sell stock at fat profits.
Netscape's Marc Andreessen, who co-invented the first widely used browser for finding and retrieving Internet information, signed on as chief technology officer of AOL.
"The reason I'm here is because they have a really good story," Andreessen, 27, said Monday from his car phone near AOL's Dulles, Va. headquarters. Though not discussing pay, he recently bought a Virginia "starter palace" so he can shuttle from his Palo Alto, Calif. home. The hardest choice is which home his three dogs will live in.
Differrent corporate cultures
Still, the differences that make the marriage a leap of faith were apparent in visits this year to the companies' headquarters 3,000 miles apart.
It's tough to find AOL subscribers, and there are 16 million of them, in Netscape's Mountain View, Calif. offices. While Netscape created the tool for people to surf the Net on their own, AOL supplies neatly organized channels of information for "newbies," or Internet beginners who otherwise might be groping.
Netscape conference rooms are named after Dennis the Menace and other cartoon characters. One top software manager wore his hair shoulder-length, and sported black fingernail polish and a T-shirt emblazoned with a heavy-metal band logo.
In contrast, America Online's halls are dotted with posters touting "Valued Work Behaviors" and "Valued Leadership Abilities." While many of its 10,000 employees playfully decorate their offices -- giant chess pieces adorn the online games department -- the company's corporate-sounding "Mission Statement" is carved into common entrances.
Such platitudes seem bound to rankle freer spirits.
While AOL pledges to keep Netscape autonomous with separate headquarters and staff, it may merge some overlapping parts. Netscape also could be hit by cuts in divisions that make software already made by Sun Microsystems, observers say. Morale may suffer due to the departure of James Barksdale, Netscape's well-liked chief executive.
The physical distance is a challenge; staff needs to spend longer hours swapping e-mails and shuttling cross-country. "The issue is it takes a lot of stamina and a lot of willingness to communicate through a longer day," said Barry Obrand of Russell Reynolds Associates Inc., a Silicon Valley recruiting firm.
Common trait: Pioneering go-getters
Yet similarities could help smooth things.
Both companies arose in the Internet's dawn, and are infused with go-getter mentalities.
They repeatedly "morphed" to survive -- AOL by linking its members-only online service to the broader Internet, and Netscape by going from just browsers to building corporate software and a Web site geared toward businesses.
AOL already has practice preserving the unique identities of acquired companies.
Despite concerns that users of ICQ, a sophisticated instant messaging service AOL bought last June, would flee, membership has soared. CompuServe, the competing members-only online service also bought by AOL, retains its Columbus, Ohio headquarters and much of its staff.
"We learned some things about respecting the special cultural ways of companies involved" in acquisitions, said AOL spokeswoman Kathy Bushkin.
The lack of worry permeated even Netscape's Mozilla.org unit, which develops the famous Navigator browser that faces an increasingly difficult challenge from Microsoft.
Asked if the takeover could quash Netscape's competitive essence, Mozilla.org's nail polish-wearing manager Jamie Zawinsky seemed nonplussed.
"There were a lot of people worried about that," he said. "But it sounds like business as usual."
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