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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Maverick who wrote (7661)	5/20/1998 1:22:00 PM
From: C. Niebucc	Respond to of 74651

The Netscape Welfare Act For Netscape, Probe of Microsoft Turns into a Tangled Web Suits' Portrayal of Browser as Key to Firm's Success Conflicts with New Image by Kara Swisher The Wall Street Journal 05/20/98 MOUNTAIN VIEW, Calif.-Netscape Communications Corp., whose complaints helped launch the government's antitrust investigation of Microsoft Corp., seems to have mixed feelings about the result. The antitrust suits filed Monday by the Justice Department and 20 states make it seem as if the Internet-browser business is a matter of life and death for Netscape, and that it is in dire need of government intervention. But that conflicts with the company's recent attempts to remake itself into more than just a maker of browsers. That is one reason company officials were noticeably reticent Monday in commenting about the suits, which included a request for a preliminary injunction that would bar Microsoft from distributing operating systems along with Microsoft's Web software unless the most recent copy of Netscape's browser were included, too. People familiar with the matter say that Netscape never asked for that remedy and was surprised by the government's request. Instead, Netscape executives argued that the case should be seen more as a matter of public policy, rather than a small company getting help against a rival. "The more Microsoft tries to paint this case as Netscape vs. Microsoft, the more misleading it is, because it's about a serious violation of the law," said Netscape's general counsel Roberta Katz, in an interview yesterday. But it isn't only Microsoft that seems fixated by the battle with Netscape. The smaller company's name is mentioned 39 times in the Justice Department's 59-page complaint against Microsoft, and 91 times in a 71-page memorandum in support of the government's motion for a preliminary injunction. One Netscape executive noted that the company concluded it faced a perception problem if it applauded too loudly. "If we are seen as too whiny and that this is the Netscape Welfare Act, it's not a good thing," this person said. "And if the government loses, it could seem as though we had no chance since we lost the 'browser war,' even though we give the browser away for free now and it does not contribute to revenue at all going forward." Netscape has been trying to bolster sales of other software products, such as application servers and electronic-commerce software, while building revenue from its popular Web site. It now gives away browser software. "The browser remains very important to Netscape, and our business continues to be built on its base," said Ms. Katz. "At the same time, we do not make revenue from it and so we have been necessarily spending a lot of our time and energy on developing other businesses." Netscape's Ms. Katz said that the course of the government investigation that focused on the Internet-browser market naturally led it to her company, since it had invented the market and had been its dominant player. Nonetheless, industry observers said that a positive outcome for the Justice Department will benefit Netscape. "Netscape may be trying to understate the fact that the federal government has named them as the solution to stopping a giant," said David Readerman, an analyst with NationsBanc Montgomery Securities. "But, if the government wins and they are bundled in with Windows, somehow I think they'll probably take that victory." Journal Link: To join an on-line discussion about Netscape and the future of browser development, see The Wall Street Journal Interactive Edition at wsj.com.