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

To: E. Graphs who wrote (4254)	9/29/1998 8:37:00 AM
From: Vic Breck	Respond to of 4903

Netscape's Chief Scientist Leaves To Form Computer-Security Start-Up Dow Jones Online News, Tuesday, September 29, 1998 at 01:02 (Published on Monday, September 28, 1998 at 21:58) By Don Clark, Staff Reporter of The Wall Street Journal Netscape Communications Corp.'s chief scientist, Taher Elgamal, has left the software company to form a Silicon Valley computer-security start-up with some high-profile financial backers. The Egyptian-born scientist is known for inventing a data-scrambling technology adapted by the U.S. government for creating digital signatures, a technique for verifying the identity of people who send electronic messages. At Netscape, Mr. Elgamal helped develop a standard encryption system that is built into most software for browsing the World Wide Web. But Mr. Elgamal's Mountain View, Calif., company, called Securify Inc., isn't focusing on new security technology. Instead, the company is offering services to companies trying to protect their networks against attack by thieves and hackers. Among other things, it will assess corporate systems by attempting to crack into them, respond to security emergencies, and help companies set policies and deploy security tools to protect their systems. "There are a lot of product companies that provide solutions for different things," Mr. Elgamal said. "But there is no overall architecture for what a network should look like from a security standpoint, so no one knows if they have designed their network correctly." Security consultancies aren't a new idea. Until recently, venture-capital firms were reluctant to bankroll technology-service companies generally, betting that few would ever become large enough to become financially significant. But the explosive growth of financial transactions on the Web, and the increasing incidence of security failures, has convinced some investors that a consultancy with a strong reputation could achieve a size comparable with the Big Six accounting firms. George Zachary, a partner at the venture firm Mohr Davidow Ventures said it invested in Securify on the belief that it could become a company with $500 million in revenue. "The concept is to take some star guys and create a company around them," added Magalena Yesil, a partner with another investor, U.S. Venture Partners. "Companies that now hire accounting firms to do a financial audit may routinely hire security firms to do a security audit." Some prominent Silicon Valley executives also have put their own money into the deal, including James Barksdale, Netscape's chief executive officer; Eric Benhamou, chief executive of 3Com Corp.; James Bidzos, chief executive of RSA Data Security Inc., a unit of Security Dynamics Inc.; and Marc Benioff, a senior vice president of Oracle Corp. Including the individual investors and the two venture firms, Securify has raised $5.5 million so far. Mr. Elgamal, 43 years old, made a name for himself in the mid-1980s with a doctoral thesis at Stanford University that proposed a new type of "public-key" encryption, a way of sending private messages to people who might not have a prior relationship with the sender. He later worked for RSA before moving to Netscape. Securify's management team also includes Mark Chen, who helped build security safeguards in Intuit Inc.'s high-volume Web site, and Mark Seiden, a prominent security expert who participated in the pursuit of Kevin Metnick, a notorious computer hacker. A spokeswoman for Netscape said Mr. Elgamal parted on good terms. His departure shouldn't be seen as a blow to the company, she added, because other top technologists played a broader role in technology development than the chief scientist. Copyright (c) 1998 Dow Jones & Company, Inc.

To: E. Graphs who wrote (4254)	9/29/1998 8:41:00 AM
From: Vic Breck	Respond to of 4903

Netscape Woos Europe With New Products, Sophisticated Services Dow Jones Online News, Tuesday, September 29, 1998 at 01:53 (Published on Monday, September 28, 1998 at 22:51) From Tuesday's Wall Street Journal Europe PARIS -- Netscape Communications Corp. Chief Executive Officer James Barksdale is expected Tuesday to announce a new generation of products, setting the stage for yet another battle with rival Microsoft Corp. Netscape last year began focusing on providing phone companies and Internet service providers in Europe, the U.S. and Asia with the infrastructure needed to host sophisticated intranet and Internet services for corporate customers. Now, it is taking that strategy one step further by announcing technological advances and offering phone-company and Internet service-provider partners a way to increase their traffic by leveraging Netscape's portal site which boasts seven million subscribers, said Jed Kleckner, senior product marketing manager for hosting at Mountain View, California-based Netscape. One of the technological advances to be announced will allow phone companies and Internet service providers to introduce "universal messaging", a service which will automatically group phone, fax and e-mail messages and forward them to the laptop or mobile phone of a traveler. Last week, Netscape and U.S. long-distance provider Qwest Communications International Inc. announced an agreement under which those companies would sell the service via Netscape's portal site. A similar deal is in the works with European phone companies, Netscape executives said. Netscape is working with phone-company partners in Europe and elsewhere to target the burgeoning market for hosted intranet services, today valued at about $200 million in Europe but projected to grow to about $2 billion by 2001, according to the Yankee Group Europe, a telecommunications consultancy based in the U.K. There is a world-wide shortage of skilled high-tech specialists needed to run corporate networks, so demand is rising to outsource sophisticated Web functions to service providers, analysts said. So far, 75 phone companies and Internet service providers world-wide have installed Netscape infrastructure to get into the Web and messaging-hosting business, Netscape is expected to announce at simultaneous press conferences in Paris and San Jose, California. They include France Telecom SA, Deutsche Telekom AG, Swisscom AG, Dutch telecommunication company KPN Telecom NV, Spain's Telefonica SA and Saritel, a systems-integrator arm of Telecom Italia SpA which hosts an intranet for the Vatican. "The economics for the corporate Web-hosting market were proven for Netscape in Europe and the U.S. is now playing catch-up in that regard," said Korak Mitra, Netscape's Vice President for hosting solutions. But the high demand and lucrative nature of the hosted Web business has not escaped the notice of rival Microsoft, which has already given Netscape a bruising in the European browser market. Microsoft Europe had mainly been targeting the consumer side of the Internet access business but is shifting its sites and plans to take Netscape head on in the business-applications area as well, said Georges Nahon, director of Microsoft Europe's Internet and communications unit. A year ago almost 90% of Microsoft Europe's phone-company business was aimed at the consumer sector but that has dropped to 50% as Microsoft focuses more on the same type of higher-end business applications that Netscape is targeting. Microsoft is already working with Telecom Italia and British Telecommunications PLC on hosted Web services for businesses and the company plans to announce two more such deals in Europe within the next six weeks, Mr. Nahon said. But Mr. Kleckner said he is confident that Netscape can uniquely position itself in the marketplace. "The combination of our product portfolio plus the (portal) services make us uniquely positioned in this market," he said. For one, Netscape believes it can bring in more traffic for phone companies by routing some of the seven million subscribers from NetCenter, Netscape's U.S. portal. Here is how it would work: Small business users from a European country would be routed to Netscape's local phone company or Internet-service-provider partner who would then offer the customer its hosted intranet services. Netscape and the local phone company would split the revenue under an arrangement Netscape declined to specify. The hosted services the local partners can offer will fall into several categories. They include "community service"-type products such as free e-mail which prompts large groups of customers to continue to use their Internet service provider as a gateway to the Web; "customer services" which allow corporate customers to outsource the services they don't want to handle but still take charge of administrative tasks they want to keep in house; and "commerce services" such as those already being delivered by Spain's Telefonica which allow structured business-to-business online commerce. The new products include Netscape Messaging Server 4.0 Hosting Edition, a high-performance messaging server software formerly codenamed "TroopersISP." This product allows a phone company or Internet service provider to put 50,000 corporate users or 500,000 consumers on the same $80,000 piece of hardware, creating hefty profit margins, Mr. Mitra said. One new feature is an "antispamming" device, that allows phone companies and Internet service providers to recognize and block repeated, unwanted e-mail messages. "The strategy is to make hardware costs very low, management costs very low and work to make their software-development cost nonexistent," Mr. Mitra said. "In addition we will work with Internet service providers and phone companies to help them acquire customers through NetCenter." The other products to be announced Tuesday are Netscape Delegated Administrator, a directory-based application that provides companies with the ability to privately view and manage their hosted users and groups; and Netscape Messenger Express 4.0, a scalable Web-based e-mail solution that supports hosted roaming services as well as advertising-based "freemail" services. Netscape Messaging Server 4.0 Hosting Edition is expected to ship in the fourth quarter. Netscape Delegated Administrator and Netscape Messenger Express are expected to be available in the first quarter of 1999. These products will be added to Netscape SuiteSpot Hosting Edition, which starts at $39 per desk top. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.