Local Netscape operations saved at the death by MD's mercy dash

Local Netscape operations saved at the death by MD's mercy dash

An eleventh-hour dash by Netscape's local managing director to the US has reversed corporate strategy and saved the company's Australian and New Zealand operations.

But a new cloud now hangs over its future in the wake of Netscape's proposed acquisition by America OnLine (AOL).

Rob Stewart, Netscape's managing director for Australia and New Zealand, made the pilgrimage to Netscape's Californian headquarters last week to canvass the company's vice president of worldwide sales on the achievements and potential of the local operations.

Among those "achievements" are large deals with Hewlett-Packard and Telstra.

Had Stewart not made his mercy trip, Imogen Boas, Netscape's marketing manager for Australia and New Zealand, admits there was a "99 per cent" chance the company's Sydney and Melbourne regional offices would have been shut down.

A statement issued by Netscape two weeks ago confirmed that "the way in which its products and services are sold in Australia would be adjusted following a change of business model in various territories around the world", but claimed "details of the new structure are unavailable at this time".

As it stands though, there will be no changes to the way business is conducted locally, Boas claims.

However, she concedes the reprieve may be temporary following the announcement last week that AOL will purchase Netscape in a stock-for-stock deal valued at $US4.2 billion.

"We are waiting to see the impact of AOL," Boas told ARN. "For now, we are just going to try and conduct business as usual."

AOL was launched in Australia during October and currently employs approximately 70 staff at its Sydney office. Netscape, meanwhile, has 16 staff spread across its Australian and New Zealand operations.

The purchase of Netscape by AOL is augmented by a $US500 million, three-year licensing pact with Sun Microsystems designed to enable businesses to fully outsource their Internet-commerce operations.

Complete turnkey solutions

US-based officials of the three companies said they plan to work jointly to provide "complete turnkey solutions along with modular software flexibility and consulting services" to spur corporations to extend their business online quickly.

AOL, Netscape, and Sun also expect to produce services for outsourcing to businesses like messaging, online catalogues, payments and receipts, supplier and partner commerce, and even internal functions such as human resources and payroll.

The relationship will be complex. Sun will become the primary supplier of systems to AOL - to the tune of $US500 million in Sun goods and services until the end of 2002 - almost certainly based on the Sun Sparc architecture running Solaris-based platforms and servers, the companies said.

Sun said it will also embrace other operating systems. Indeed, Netscape has broad support for the Microsoft Windows NT platform for its suite of I-commerce software and services.

Sun and AOL have also committed to pick up and develop the next generation of Netscape's popular Navigator and Communicator software clients - and you can bet that means an invigorated move for Java on the client.

For its part, AOL will receive more than $US350 million in licensing, marketing, and advertising fees from Sun, as well as some revenue-sharing commitments from AOL's business over the next three years, the companies said.

Another benefit for Sun will be its new ability to sell AOL's Netscape-branded suite of middleware software, with both companies using each other's sales channels and customer relationships to deliver these products, they said.

Sun will also provide technical support for the former Netscape products that will remain Netscape branded but will be under AOL's ownership.

Additionally, a major focus of the alliance will be to deploy Sun's PersonalJava via AOL to a range of new Internet devices. PersonalJava, designed for devices such as personal digital assistants, cell phones, and pagers, will help further extend Java down to the consumer device level.

Local Netscape and Sun officials remain unsure about the implications of the alliance in Australia, but Don Lowe, Sun's marketing director, told ARN the strategies are unlikely to be adopted globally until mid-1999.

AOL executives did not respond to ARN's calls prior to press time.

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