AOL attempts to retain Netscape employees

Netscape and America Online executives are pulling out all the stops to ensure the retention of Netscape employees who may decide that AOL is too computer unsavvy for their technical skills.

"There's this perception of AOL as a sort of middlebrow [company]," said Marc Andreessen, co-founder of Netscape.

According to Andreessen, what AOL can offer to Netscape employees is a major marketing opportunity and strength in the increasingly competitive Internet market.

At least one analyst said Andreessen is delivering the right message if Netscape wants to keep employees' spirits and loyalties high.

"[Netscape and AOL] would be crazy not to be concerned," said Tim Sloane, an analyst at the Aberdeen Group, in Boston. "I can't think of anyone at Netscape who would love the concept of working for AOL.

"[However,] if AOL comes up with a great business plan for each Netscape division, employees may recognise the market benefits."

In addition to savvy marketing and strong Internet penetration, AOL and partner Sun Microsystems will provide strong support for Netscape's enterprise software and enable the company to better operate in the Internet appliance market, according to Andreessen.

Netscape had no economic incentive to build software to run on these devices, Andreessen said. But in AOL's environment of aggregated services, "it makes sense to open up this service to as many of these devices as possible," he added.

Although analysts agreed Netscape's enterprise software group will likely stay intact and will benefit from working with Sun, the future of other Netscape divisions may not be as bright.

The most obvious threat "seems to be in the browser area, which doesn't have a high direct business value," said Michael Sullivan-Trainor, an analyst at International Data Corporation (IDC).

If better marketing and access to Sun resources were not enough of an incentive for Netscape employees, AOL CEO Steve Case is also providing a monetary lure. Case this week offered an additional one month's salary to any Netscape employee who remains with the company until the acquisition has been finalised - which is likely to happen in a few months.