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AOL and Sun plan to carve-up Netscape

A $4 billion merger deal could pull the rug from under Microsoft's Internet strategy

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Browser carve-up? Now AOL and Sun are poised to announce a carve-up of Netscape, according to US reports. The $4 billion merger deal divvying-up the company between the two is expected to be announced early today, and could have interesting implications for the current antitrust action against Microsoft. Netscape and AOL were known to be in discussion last week, but the full implications have only started to become apparent in the last few hours. The deal is to take a similar form to the one AOL struck with CompuServe and WorldCom last year. AOL will take Netscape's Netcenter portal and browser software, while Sun gets the business software, and the two companies co-operate in development and marketing. Provided the deal goes ahead, Microsoft's attorneys may initially have difficulty in doing much more than pointing, fish-mouthed - there is indeed a princely cynicism to AOL's move, and a certain element of collusion to Sun's. As trial documentation has clearly shown, it was seen by Microsoft as absolutely vital that AOL be brought on-side in the early days of Internet Explorer, and AOL's version of IE these days accounts for a fairly high proportion of total shipments. AOL defecting to a Netscape browser it now owned would undo a lot of Microsoft's efforts, and perhaps provide evidence that AOL will do anything for money (or for purely commercial reasons, as the company has it). The 'own brand' nature of AOL's version of IE gives us something to speculate about too. Is the company going to go for a completely standard version of Netscape Navigator, or will it, er, integrate a specific version with its own system? That would prompt more eye-rolling from Microsoft, but might have the bizarre side-effect of driving AOL's rivals into the arms of IE. From Sun's point of view, the proposed deal looks excellent. Netscape is a leader in the Web server market, and Sun's Solaris is a leader as far as the base OS for these is concerned. So Sun can add muscle to Netscape development, cover the bases better by being able to offer more multi-platform support (Intel being particularly important, Linux also being a handy one), and leverage its new AOL relationship for all it's worth. Microsoft should soon find itself very locked out of AOL indeed, and thrown further back onto the defensive in all sorts of related fields. So the first Redmond marketeer to drag themselves out of bed in Seattle and stop gawping for long enough to shout, "Look! We told you everybody did it!" is no doubt in for a fat bonus from Bill. ®

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