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To: TheBigB who wrote (8392)	3/13/1998 9:24:00 AM
From: TheBigB	Read Replies (2) \| Respond to of 27307

Here is the link to the WSJ article and some excerpts interactive.wsj.com Netscape to Expand Internet Site, Boosts Rivalry With Other Firms By KARA SWISHER and NICK WINGFIELD Staff Reporters of THE WALL STREET JOURNAL Netscape Communications Corp. is planning to expand its on-line service into a major Internet gateway, a move that could require it to both compete and cooperate with other Internet companies. The move to shift its recently launched Netcenter site to a broader "portal" site -- a combination of content, communications and community features plus Internet navigation tools -- will bring Netscape into more direct competition with many major Internet players, including Yahoo! Inc., Excite Inc., America Online Inc. and a similar new site that will soon be launched by Microsoft Corp. called Start. Join the Discussion: Tell us what you think of the company's fate and the future of browser development. Microsoft Readies New Home Page to Expand Its Presence on the Web (Feb. 3) But how Netscape configures such a site might also include a single partnership or series of partnerships with some of those same competitors. The Mountain View, Calif., Internet-software company is now in discussions with Yahoo, Excite, AOL, as well as search-engine companies such as Infoseek Corp. and Lycos Inc., about a wide range of options that include everything from simply selling them premium placement on the popular site to large-scale programming deals. "It all plays into what we already launched in the fall with Netcenter," said Jen Bailey, who heads Netscape's Web effort. "We think we have the significant reach and broad presence that can translate into a more consumer oriented service." Free E-Mail Is Considered Thursday, Netscape announced more community features such as discussion groups and a directory of members on the site, and is now looking at a variety of deals to bring free e-mail to the service. The strategy change and the negotiations with potential competitors reflect the growing realization that traffic on the Internet is beginning to consolidate around a few major hubs. If major Internet locations can be thought of as real estate, what is happening to the Netscape site is a behind-the-scenes land rush for what many consider one of the greatest and least developed parcels of territory in cyberspace. Many users already flock to the Netscape site by default: More than 65 million Netscape browsers in circulation are programmed to automatically transport users to the site when they launch the program. Unless they change their start page, users are part of Netscape's captive audience. That has long made the site one of the most trafficked places in cyberspace. According to a recent poll by Atlanta-based RelevantKnowledge Inc., Netscape.com is the second-most-visited site on the Web, with 23.1 million discrete users in February. The Yahoo.com site is No. 1, with 31.3 million visitors, and Microsoft.com is third with 17.9 million users. While Yahoo now pays an annual fee of $5 million for that same privilege, it now has a market capitalization of $3.5 billion compared with Netscape's value of $1.7 billion. That might be considered odd because Netscape gets more revenue than Yahoo from advertising, sponsorships and electronic commerce on its Web site, totaling $93 million in 1997, including $21 million in the fourth quarter. In comparison, Yahoo had $67.4 million in sales for the year and $25 million for the quarter. That amount represents about 17% of total sales at Netscape, revenue made more critical by the company's recent decision to give its browser away free to counter pressure from Microsoft. Since weak results released in January have brought the future of the once-hot company into question, its officials have turned to the Web site for answers. Partnerships Established Netscape executives had already beefed up its site with Netcenter, which made its debut in September and was aimed directly at the business customer. Over recent months, the company has struck a series of partnerships to add fare to the site. These include an electronic news service, shopping, instant messaging and travel services. There are now 3.6 million registered users of the site. The site soon will add e-mail, said Ms. Bailey, a service considered to be a sure-fire method of pulling in visitors throughout the day. The company had been in preliminary talks with HotMail Corp. but lost out to rival Microsoft, which acquired HotMail in December for an estimated $300 million to $400 million in stock. Fear of Microsoft's new Start site -- unveiled last month and set to make its debut this summer -- spurred the company to sharply refocus on its Web site, said people close to the company. One option strongly considered was to sell it off completely to AOL. Mary Meeker, analyst at Morgan Stanley, Dean Witter, Discover & Co., recently valued the site at $500 million. Because its Yahoo-like potential could make it worth much more than that, Netscape executives now think that the Web site must remain an integral part of its business. But there has been a long internal debate at Netscape over the company's ability to become a media company. Top company executives have long maintained that they don't want to enter the content business. That reluctance led to the intense negotiations, primarily with Yahoo, Excite and AOL, all of which have struck a variety of smaller deals over the past two years with Netscape and pay Netscape a variety of fees for showcasing their services on the site. "We are thinking much more about strategic market share and branding," said Netscape's Ms. Bailey. "And in this business, there is all sorts of 'competition' that makes competitors partners and partners competitors."