America Online reportedly to buy Netscape By Jana Sanchez-Klein and Scott Magoon InfoWorld Electric Posted at 6:55 AM PT, Nov 23, 1998 America Online is in talks to purchase Netscape in an all-stock transaction that is said to be worth more than $4 billion, according to numerous press reports appearing over the weekend. The press reports, appearing on U.S. television, radio, and online versions of the Wall Street Journal and Newsweek, said that Sun Microsystems may also be involved in the deal. The stories quote unnamed sources said to be close to the deal. Although financial terms were not disclosed, the deal, based on the market capitalization of Netscape, would be worth at least $4 billion. But according to the Wall Street Journal, AOL will pay a premium above the market price for the Netscape stock. The leaked details include AOL taking over Netscape's Web portal, or Netcenter, as well as Netscape's popular Web browser software. Reportedly, Sun would take over the enterprise side of Netscape's business and pay AOL a fee for using Netscape technology. Netscape currently sells a number of business applications, including those used for messaging, groupware, and Internet-commerce applications. Sun, AOL, and Netscape have reportedly been in talks all week and this weekend and could reach a deal before the stock markets open in the United States on Monday morning. The deal would mean that AOL would retain the Netscape brand name and would not involve any staff layoffs, according to the reports. Netscape's president and chief executive officer, James Barksdale, has reportedly been offered a seat on AOL's board of directors as part of the deal. The deal could have far-reaching effects on the Department of Justice case against Microsoft, as well as changing the landscape of the browser wars. Netscape's exit with a bang, would also likely impact the ongoing Department of Justice antitrust suit against Microsoft, which has looked at Microsoft's alleged efforts to drive Netscape out of business. Sources familiar with the deal reportedly said that AOL would now be in a position to get a huge amount of I-commerce on the Web. In addition to its own 14 million subscribers, Netscape's Netcenter gets about 20 million visitors per month. Analysts see AOL, strengthened by Netscape's technology and users, as a potential threat to Microsoft's growing I-commerce ventures. The deal may need approval from government regulators. None of the companies involved could be reached for comment, nor had any of them issued a statement at the time of publication. Netscape Communications Corp., based in Mountain View, Calif., can be reached at www.netscape.com. America Online Inc., in Dulles, Va., can be reached at www.aol.com. Sun Microsystems Inc., in Palo Alto, Calif., can be reached at www.sun.com. Jana Sanchez-Klein is London bureau chief for the IDG News Service, an InfoWorld affiliate. Scott Magoon works for the Boston bureau of the IDG News Service. From MAILER-DAEMON@cs.depaul.edu Mon Nov 23 11:37:45 1998