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Netscape's life as an independent company came to asurprising and sudden end yesterday with its $4.2 billion
acquisition by America Online. But Netscape's new life under
AOL ownership may well solidify its shaky status as a
provider of enterprise software, thanks to the third player
in the historic deal: Sun Microsystems.
As a well-established enterprise player with a large
installed hardware base, Sun will give Netscape much-needed
muscle in corporate sales, support, and professional
services. Although AOL will own Netscape, Sun will be
Netscape's development and marketing partner for all of its
enterprise applications, including servers and electronic-
"This [deal] certainly removes a lot of the cloud around
Netscape and the issues surrounding it," says Sun president
Ed Zander, referring to service and support concerns.
Presumably to sweeten the deal for Sun, AOL guaranteed that
it will purchase Sun systems and services--worth $500
million at list price--through 2002 for AOL's electronic-
commerce partners and its own use. AOL will receive more
than $350 million in licensing, marketing, and advertising
fees from Sun.
Netscape customers generally hailed the Sun partnership--
with some caveats. "Netscape's developers are some of the
best people in the business," says Ed Glassman, director of
technology strategy at Pfizer Inc., which uses Netscape's
Enterprise Web Server and Proxy Server as well as Sun
hardware. "But Netscape doesn't always have the best process
for managing and enhancing their products and getting
feedback from enterprise users. Sun does. If they can keep
the development team intact, it's a real winning
That may be difficult, however. Netscape co-founder and
chief technology officer Marc Andreessen's role will be
determined sometime before the deal closes in the early
spring, AOL executives say. And Netscape CEO Jim Barksdale
will give up any operational role, keeping only a seat on
AOL's board of directors. Netscape will remain in Mountain
View, Calif., but will be overseen by AOL president Robert
Pittman, who will continue to be based at AOL headquarters
in Dulles, Va.
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