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for a second act
Aims to become a destination for the office crowd
By Ronna Abramson
Who could forget Netscape, the browser that seemed to dominate the internet just a couple of years ago, before the rise of Microsoft's Internet Explorer?
Quite a lot of people, it turns out.
Here in the U.S., Netscape's share of the browser market has fallen to below 12 percent.
The question is whether once-dominant Netscape, now under the wing of AOL Time Warner, can enjoy a second act.
AOL Time Warner believes so.
It has been quietly repositioning Netscape as a portal for the workplace, one with a decidedly more technically adept user base than that of AOL, the nation's largest internet service provider.
The media conglomerate is also envisioning Netscape as a destination site showcasing Time Warner content.
That's a mission that was attempted by Time Warner's now-defunct Pathfinder service prior to the merger of America Online and Time Warner and one that failed miserably, by all accounts.
But as Netscape executives point out, this is now post-merger, and they now have the benefit of the synergistic clout of the world's largest media company behind them.
But whatever the plans for Netscape, they are not registering much rumble with analysts who follow the internet marketplace.
"In the scheme of things for AOL Time Warner, Netscape is rather small," says Gordon Hodge, an analyst with Thomas Weisel Partners in San Francisco who covers AOL Time Warner. "I don't spend a lot of time thinking about it or worrying about it."
Hodge estimates Netscape generates $442 million in revenues for AOL Time Warner, roughly 1 percent of total revenues.
Moreover, that's from what's called the Netscape enterprise group, which offers Netscape software and services to companies rather than consumers and contributes to an e-commerce alliance with Sun Microsystems called iPlanet.
That revenue figure will decline when the agreement with Sun expires early next year; Sun already has started to fold the operation into the rest of its company.
AOL Time Warner does not break down advertising revenues by web properties, making it impossible to know how much revenue Netscape.com is generating on the consumer side.
Before the AOL acquisition, Netscape reported net income of $2.7 million on $162 million in revenues for the quarter ending Oct. 31, 1998.
Netscape executives say they can offer advertisers a different audience from the average AOL subscriber--one that's more tech-savvy.
"We also have a pretty serious business audience," says Netscape spokesman Derrick Mains. He notes that the majority of the traffic to Netscape's NetBusiness small business service, launched more than a year ago, comes during daytime hours from people at work.
AOL, by contrast, is largely a home-based service.
"We've become a key vehicle by which AOL Time Warner can reach the web-at-large audience," says Marty Gordon, Netscape's vice president of corporate communications.
The AOL Time Warner merger, he says, has enabled Netscape to "turbo-charge" its site with content in order to create a "very successful portal."
But Netscape will take considerable turbo-charging in order to become a truly competitive portal, judging by traffic numbers.
Netscape.com attracted 23.6 million unique visitors in November 2001, compared to 70 million who visited Yahoo, nearly 61 million who visited Microsoft's MSN.com and 58.2 million visitors to AOL.com, according to Nielsen/NetRatings.
"My suspicion is that Netscape is not a legitimate competitive threat" in the portal arena, says Derek Brown, an analyst with WR Hambrecht & Co. who covers Yahoo and previously covered AOL.
"Netscape doesn't come up in any discussions I have."
Netscape also has nearly fallen off the browser list.
Like countless others, WR Hambrecht's Brown notes he used Netscape before there was an Internet Explorer.
But at some point he upgraded Windows and Internet Explorer was the default browser.
"I saw no reason to go through the effort of downloading Netscape," says Brown. "Based on the numbers, I don't think I'm alone."
Indeed, Netscape currently commands only 9.34 percent of the global market, compared to Microsoft's 89.35 percent, according to WebSideStory's StatMarket. Microsoft also dominates in the U.S. with 86.88 percent of the market, compared to Netscape's 11.83 percent.
Netscape's decline cannot entirely be blamed on Microsoft's allegedly anti-competitive tactics in promoting Internet Explorer.
Netscape has been widely criticized for waiting more than two years, until November 2000, to introduce its version 6, which when launched was still berated as not ready for primetime.
Two upgrades later, Netscape has managed to garner a tie score with Internet Explorer in CNET.com reviews.
Netscape is hoping such new releases help turn back the tide.
While advertising and showcasing Time Warner content, Netscape also is relying on Time Warner sites to similarly showcase its tools. Since debuting on such sites as Time and People in March, the Netscape toolbar is now featured at the top of 24 Time Warner Web properties.
Netscape's Gordon says it is just the first step since the merger.
"It really demonstrates how we can add value by integrating our world-class tools that come from Netscape with the world-class content that sits on these various sites," he says.
Ironically, AOL itself is feeding into Netscape's declining market share in the browser world.
Internet Explorer--not Netscape--was imbedded in AOL version 7.0 when it launched a couple of months ago.
December 12, 2001 © 2001 Media Life
-Ronna Abramson is a writer living in Oakland and a frequent contributor to Media Life.
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