Seems that this story may have spurred some short term buying...
Netscape Shareholders OK Merger
AP Online, Wednesday, March 17, 1999 at 12:09
By DAVID E. KALISH
AP Business Writer
MOUNTAIN VIEW, Calif. (AP) - Shortly after America Online Inc.
revealed it would buy Netscape Communications Corp., AOL chairman
Steve Case flew out to the Web software pioneer's headquarters to
address its workers. The subject was hairy.
''You can still bring your dogs to work,'' he told a cheering
crowd of 2,000 Netscape employees.
That comment, related by several attendees, seemed no small
concession from a company whose cautious corporate culture, some
feared, could snuff out the freewheeling creativity of Netscape.
Netscape shareholders voted overwhelmingly this morning in favor
of the $9.6 billion deal, and the merger is expected to close
shortly after. But the real work in combining these very different
companies is just starting.
AOL's ability to soothe Netscape's coveted army of software
designers is key to creating what could be a powerful new threat to
Microsoft's computer software dominance.
Once the deal is completed, AOL becomes the distributor of
Netscape's Internet browser software and adds the Netcenter Web
site, giving it two of the four most popular Internet destinations.
Also part of the deal, Sun Microsystems Inc., a maker of business
software and computers, will distribute Netscape's corporate
software for three years.
So far, AOL's assurances to Netscape staff appear to be working.
Common goals, such as making the Internet easy to navigate, are
helping to bridge the divide of culture and distance.
Relatively few Netscape employees have quit since the Nov. 24
agreement, thanks in part to Case's promise to pay an extra month's
salary as a bonus for sticking around. Others are waiting for
Netscape stock options to take effect so they can sell stock at fat
profits.
Netscape's Marc Andreessen, who co-invented the first widely
used browser for finding and retrieving Internet information,
signed on as chief technology officer of AOL.
''The reason I'm here is because they have a really good
story,'' Andreessen, 27, said Monday from his car phone near AOL's
Dulles, Va. headquarters. Though not discussing pay, he recently
bought a Virginia ''starter palace'' so he can shuttle from his
Palo Alto, Calif. home. The hardest choice is which home his three
dogs will live in.
Still, the differences that make the marriage a leap of faith
were apparent in visits this year to the companies' headquarters
3,000 miles apart.
It's tough to find AOL subscribers, and there are 16 million of
them, in Netscape's Mountain View, Calif. offices. While Netscape
created the tool for people to surf the Net on their own, AOL
supplies neatly organized channels of information for ''newbies,''
or Internet beginners who otherwise might be groping.
Netscape conference rooms are named after Dennis the Menace and
other cartoon characters. One top software manager wore his hair
shoulder-length, and sported black fingernail polish and a T-shirt
emblazoned with a heavy-metal band logo.
In contrast, America Online's halls are dotted with posters
touting ''Valued Work Behaviors'' and ''Valued Leadership
Abilities.'' While many of its 10,000 employees playfully decorate
their offices - giant chess pieces adorn the online games
department - the company's corporate-sounding ''Mission Statement''
is carved into common entrances.
Such platitudes seem bound to rankle freer spirits.
While AOL pledges to keep Netscape autonomous with separate
headquarters and staff, it may merge some overlapping parts.
Netscape also could be hit by cuts in divisions that make software
already made by Sun Microsystems, observers say. Morale may suffer
due to the departure of James Barksdale, Netscape's well-liked
chief executive.
The physical distance is a challenge; staff needs to spend
longer hours swapping e-mails and shuttling cross-country. ''The
issue is it takes a lot of stamina and a lot of willingness to
communicate through a longer day,'' said Barry Obrand of Russell
Reynolds Associates Inc., a Silicon Valley recruiting firm.
Yet similarities could help smooth things.
Both companies arose in the Internet's dawn, and are infused
with go-getter mentalities.
They repeatedly ''morphed'' to survive - AOL by linking its
members-only online service to the broader Internet, and Netscape
by going from just browsers to building corporate software and a
Web site geared toward businesses.
AOL already has practice preserving the unique identities of
acquired companies.
Despite concerns that users of ICQ, a sophisticated instant
messaging service AOL bought last June, would flee, membership has
soared. CompuServe, the competing members-only online service also
bought by AOL, retains its Columbus, Ohio headquarters and much of
its staff.
''We learned some things about respecting the special cultural
ways of companies involved'' in acquisitions, said AOL spokeswoman
Kathy Bushkin.
The lack of worry permeated even Netscape's Mozilla.org unit,
which develops the famous Navigator browser that faces an
increasingly difficult challenge from Microsoft.
Asked if the takeover could quash Netscape's competitive
essence, Mozilla.org's nail polish-wearing manager Jamie Zawinsky
seemed nonplussed.
''There were a lot of people worried about that,'' he said.
''But it sounds like business as usual.''
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