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Technology Stocks : Netscape -- Giant Killer or Flash in the Pan? -- Ignore unavailable to you. Want to Upgrade?

To: Guardian who wrote (2983)	5/2/1998 10:19:00 AM
From: Yiota	Respond to of 4903

The Wall Street Journal -- May 1, 1998 Technology & Telecommunications: Infoseek Seems to Be Top Contender In Heated Contest Over Netscape Engine ---- By Kara Swisher Staff Reporter of The Wall Street Journal Infoseek Corp. appears to be the leading contender in a closely watched contest to create a new search engine for Netscape Communications Corp.'s popular Web site, people familiar with the matter said. A Netscape spokeswoman said the Mountain View, Calif., company hadn't made a definitive choice and that discussions continue with a wide range of Internet players. But the people familiar with the situation said the software company is in serious negotiations with Infoseek over a deal that would create a search service using Netscape's brand and tie the two companies together in other ways. Netscape could garner more than $25 million a year from Infoseek, own parts of Infoseek's technology and perhaps take an equity position in the company, they said. Word about a potential deal drove Infoseek's shares up 4.1% in heavy trading. The stock rose $1.3125 to $33.625 in Nasdaq Stock Market trading, while Netscape closed on Nasdaq at $27.3125, down 87.5 cents. But other potential deals remain in the offing. Netscape is still in talks with companies such as Excite Inc., Lycos Corp. and Inktomi Corp. about the role each could play in the reconfiguration of its Netcenter site, ranging from providing information to licensing software tools to paying multimillion-dollar fees for links to their sites from Netcenter, these people said. Not everyone is still talking, though. Executives at the Internet's top search and directory company, Yahoo! Inc., have said they are unlikely to do any "work for hire" for Netscape and may not even purchase a position on Netcenter's search page, which Yahoo has done for several years. One industry executive said Netscape has been seeking terms difficult for some potential partners to accept, including equity stakes, control over branding and long-term rights to search-engine technology. "I am not sure why in the world you would do that," he said. "Why would you want to give them your crown jewels?" The Netscape spokeswoman declined to discuss potential terms. Infoseek also declined to comment. "Netscape has been evaluating all the search vendors, but it is only part of the many variables," said David Peterschmidt, Inktomi's chief executive officer. "They are building a complex model that is not going to be a one-shot approach and will include a lot of relationships." Industry executives say one of the reasons Infoseek might want to do just such a deal is that it is a distant contender in the race to become a major destination on the Internet. A partnership with Netscape, whose Web site is one of the most trafficked on the Net, would raise its profile while giving Netscape access to search and directory expertise it lacks. Speculation over the fate of Netcenter has been brewing since Netscape officials determined in recent months to turn the site into a major revenue generator. It is part of the greater flurry of activity -- a series of talks, acquisitions and strategic moves -- over which players will become the key "portal" sites on the World Wide Web. Stocks of potential portal sites have leaped in recent weeks amid signs of rising customer traffic and advertising revenues. Major media companies, such as News Corp., Walt Disney Co. and Time-Warner Inc., also are talking with search and directory companies to reach larger Web audiences. At a speech to the Society of American Business Editors and Writers in Huntington Beach, Calif., on Tuesday, for example, Disney Chairman and Chief Executive Michael Eisner caused a stir by saying that Disney plans to be "aggressive competitors on the Internet as you enter the Internet." Mr. Eisner later denied that Disney was angling to buy a major Internet portal, saying that it is "highly unlikely" that the company would make a sizable acquisition. --- Jared Sandberg and Bruce Orwall contributed to this article. Journal Link: Join an on-line discussion about Netscape's future in The Wall Street Journal Interactive Edition at wsj.com --------------------------------- regards, Giota

To: Guardian who wrote (2983)	5/2/1998 10:31:00 AM
From: TFF	Read Replies (1) \| Respond to of 4903

CNWK is IMHO a second tier content provider and therefore will probably be swallowed by one of the portal trying to lock up content. Make no mistake about it. The SE's are BIG MONEY IN PLAY(NSCP has figured that out and is now jumping on the bandwagon)and therefore the Wall Street types will do everything in their power to keep it going. How? alliances,mergers,upgrades,buyouts. What's the downside?...a market correction. Without a market correction this sector will IMHO lead the market to dizzing heights short term. Without a valuation model Analysts will be hard pressed to come up with a good reason to sell the SE's IN THE SHORT TERM as the M&A guys announce deal after deal. The BIG question for the trader/investor is..do really want to be in SE's if the market corrects in the short term? ..cus you know it's gonna leave a mark;)