March 8, 1996
Page B1 ||© 1996 San Francisco Chronicle|
Netscape Communications is expected to announce today that it has reached a deal to provide its Internet software to subscribers of CompuServe, a leading online service owned by H&R Block.
A similar deal is expected soon with the No. 1 online service, America Online Inc.
Michael Homer, vice president for marketing of Mountain View- based Netscape, said yesterday that the deal with CompuServe is ``a major agreement for us -- millions of dollars over time, potentially.'' The exact figure will depend on how many of CompuServe's 4.5 million customers decide to use Netscape's Internet browser, known as the Netscape Navigator.
CompuServe customers will be allowed to use the Navigator free, but CompuServe will pay Netscape royalties ranging upward from a few dollars per customer, depending on total volume. In addition the deal calls for CompuServe to be an Internet provider to users of Netscape's software.
CompuServe's large international presence could extend Internet use -- as well as Netscape's products -- abroad.
By offering CompuServe as an Internet provider, Netscape will be an ally in putting heavy pressure on smaller providers such as Netcom and UUNet.
Homer said the deal with America Online is not quite as far along, but that it could be consummated soon. ``Those talks have been under way for some time,'' he remarked. The deal with America Online will have ``some similarities'' to the CompuServe deal, Homer said. ``We don't have the final agreement finished so I can't tell you the details. Things are still pretty changeable.'' A report in yesterday's Wall Street Journal indicated that giant Microsoft was trying to woo America Online away from Netscape's embrace. The report drove Netscape's already weakened stock down 6 1/4 points yesterday on Nasdaq to 38 3/4.
The stock has lost more than half its value since the end of January. Initially offered to the public last August at 14 -- adjusted for a 2-for-1 split -- the stock hit an all- time high of 87 last December.
A knowledgeable source suggested yesterday that the stock has been hurt in part by insider selling. The company's officers own the bulk of the stock, and they had their first so-called selling window during February. Their transactions will be publicly reported in the coming weeks, but Homer said that all the officers retained ``the vast majority'' of their holdings.
Homer said that the rivalry between Netscape and Microsoft has been ``overdramatized'' -- that the companies can co-exist on the Internet. He pointed out that CompuServe already has a licensing agreement to provide Microsoft's Internet product, the Explorer, to its customers. ``A lot of these providers will be offering their customers a choice,'' he remarked.
||Chronicle Front Page
||The Gate Home Page