Post of the Day
February 6, 1998

From our AOL America Online Board


Subject: Netscape
Author: TMFFletch

I think it would be a mistake for AOL to acquire the Netscape browser. Programming and supporting the thing would fly in the face of Mr. Pittman's light business model. Why buy the Netscape browser when you've already got IE running as default, with all the free upgrades coming available?

AOL's clear desire would be to negotiate for the default home page of the Netscape browser. This would give AOL control of two of the most popular web entry points, meaning that they'd be almost as big of a promotional juggernaut on the web as they are on their proprietary service. With that type of traffic comes advertising, sponsorship, and pay-for-promotion from some of the largest sites on the web. Imagine -- Yahoo having to pay AOL!

That said, there's no way I could see Netscape doing the deal without offloading the browser, as well. After all, the default page is really the only viable revenue source for the browser moving forward. The browser is really dead without the page.

While this is the type of deal that would put AOL into a leadership position on the web, I have a hard time seeing it happen.

Thoughts, comments, flames?

Fletch
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Response

Subject: Re: Netscape
Author: Chip Royce

Fletch -

My background is in internet promotion / distribution and I have to agree that the Netscape home page would be a tremendous beachhead for the company.

With its divestiture of ANS and its previous failures with Booklink technologies as well as Virtual Places (well, we at least got AOL Internet messenger from that), odds are that AOL is not going to even consider being in the technolgy business once again and will opt to remain the programming king of the online world.

My only questions are how such a deal could be structured:

- for instance, the Yahoo/Netscape deal had to be renegotiated (public knowledge) because it turned out not to be as lucrative for Yahoo as originally anticipated. As a result, space in Netcenter is certainly desireable, but not the end of the world.

- Also, the search engine deals that allow all sorts of providers including Yahoo, excite, looksmart, lycos, et.al. access to netscape users are still going, although may be up soon. Could AOL just buy up an exclusive on the page and see if it could leverage that space for more $ than what netscape is currently getting?

- Netscape has become a great brand / or at least recognizable corporate trade name. I don't see the sale of "netscape.com" happening if the company were acquired. How then could AOL "take over" Netcenter while still allowing the Netscape home page to still serve its corporate purpose (remember, that's still the portal for downloading the browser AND all the tech support for the program).

I guess this will be a great drama to be played out - we'll wait and see what the future holds. In the meantime, I'm holding :)

Chip
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Response

Subject: Re: Netscape
Author: Morgantosh

In his posting, TMF Fletch said:

I think it would be a mistake for AOL to acquire the Netscape browser. Programming and supporting the thing would fly in the face of Mr. Pittman's light business model. Why buy the Netscape browser when you've already got IE running as default, with all the free upgrades coming available?
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I would agree that purchasing Netscape would probably not be in AOL's best interest over the long term. However, what people fail to realize is that the AOL experience is built on solid programming and technology on a GRAND basis. The network infrastructure that AOL runs on (not the POP's, the actual host computer) is proprietary, has been painstakingly built from the ground up, is absolutely massive and blindingly fast (send a piece of AOL-> AOL email and it will be there within a few seconds). While we all may have speed complaints from time to time, please realize the massive simultaneous actions the host is performing at any one time and have to realistically expect occasional delays.

No ISP has any technology approaching AOL's host system and it is one of the reasons that AOL can be an "experience" and a "community". Systems built upon freeware Linux and Apache are nowhere near as sophisticated as what AOL has under the hood. I guess my point is that while AOL is morphing towards a media company, it is the underlying technology that allows it to do so. Outstanding technological leadership and experience is the backbone that allows this company to do what it must to dominate the market. Without this firm ground there is no way a company could shift strategic direction so often (like the unlimited pricing plan ...) and come out with a doubled stock price a year later.

Off my technology soap box. Good hunting!

Morgan

Disclaimer --- Ex-AOL employee, current AOL stockholder.


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