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Technology Stocks : Internet Search Engines - The New Conglomerates? -- Ignore unavailable to you. Want to Upgrade?

To: Arcane Lore who wrote (76)	4/25/1998 5:42:00 PM
From: TFF	Read Replies (1) \| Respond to of 165

Netscape Has Looked Into Taking Equity Stake In Search Co. By Mark Boslet and Joelle Tessler NEW YORK (Dow Jones)--Netscape Communications Corp. (NSCP) has looked into taking an equity stake in whatever Web navigation company it picks to power its Netscape-branded search and Internet guide service, sources said. The consideration of equity ownership shows Netscape's determination to more firmly establish itself in the Internet landscape. It also could affect the balance of power among the major Web directory and search companies. Analysts said Netscape, which is in negotiations with numerous content companies to provide programming for its Netcenter Web site, is also close to an agreement with a major New York bank to provide financial services to the site. In addition, analysts said, AT&T Corp. (T) is in advanced negotiations with the company to play a role on Netcenter. The results could mean dramatically increased revenue for Netscape. BT Alex. Brown Inc. analyst Mary McCaffrey projects total revenue from Netcenter could rise to $135 million to $145 million this year. That would be about a 50% increase over the $94 million in revenue from advertising and deals with the search companies that the site generated in 1997. In a conference call Wednesday, Mike Homer, head of Netscape's Internet division, said the company plans to launch a Netscape-branded search and directory service on Netcenter and will enter into an agreement with a search company to power the new service. In the negotiations, Netscape has discussed taking an equity interest in the company to establish a closer link between the two, sources said. The negotiations between Netscape and the search companies have been quite fluid, with different players alternately emerging as the leading contenders for the deal. But the short list of possible partners has been narrowed to Infoseek Corp. (SEEK), Excite Inc. (XCIT) and Lycos Inc. (LCOS), sources said. Several sources believe Yahoo! Inc. (YHOO) is an unlikely contender since it has a sizable lead in traffic among the Web guides and therefore has less incentive to pay the high cost of a deal with Netscape. Others speculated that a less well-known search technology company, such as Inktomi Corp. - which licenses its search technology to other companies on an original equipment manufacturer basis - is also a possible candidate. One analyst pointed out, however, that Inktomi licenses its technology to Microsoft, which would make it an unlikely candidate to partner with Netscape. Inktomi declined comment, saying it never discusses negotiations with potential customers. Lycos and Infoseek could not be immediately reached for comment. Excite declined to comment. Netscape officials did not return a phone call seeking comment. -Mark Boslet; 650-496-1366; and Joelle Tessler; 201-938-5285