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Browser wars suit ends with death knell for Netscape

Microsoft, AOL settle for $750m

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A lawsuit intended to bring justice to Netscape has ended with a deal that sounds the death knell for the browser.

Microsoft today agreed to settle a private antitrust suit brought by AOL Time Warner, paying the latter $750 million.

The case was brought "to restore competition lost in the operating system market and in the Web browser market because of Microsoft's illegal conduct."

But amongst the many bonuses for Redmond in the settlement, AOL committed to renewing its royalty-free license to incorporate Internet Explorer into its own software for seven years. Asked if this meant that AOL's Netscape division would be spun-off, AOL CEO Richard Parsons replied: "Not at this point," following up later with "Not at this time."

Hardly a resounding vote of confidence in the open source browser. AOL is the main sponsor, and the largest commercial client of the Mozilla project. The Netscape division employs between "two and three hundred" staff in Silicon Valley, a far cry from 1998 when AOL acquired the company in a stock swap worth $4.2 billion. Several hundred Netscape staff were transferred to Sun Microsystems - matchmaker for the deal - two years ago.

Then again, earlier this week Steve Case raised the idea of selling off the AOL Internet business altogether, returning Time Warner closer to its roots as an 'old' media company.

AOL has also agreed to license Microsoft's media player and DRM technology in what Bill Gates described as "the most comprehensive media license we've done." Much of the detail will remain confidential, although from the excerpts released it's clear that this will be non-exclusive and non-binding. The two sides also agreed to "explore" interoperability between their IM clients.

Internet Explorer is a surprising winner in the settlement. Neglected by Microsoft for several years, the browser was recently described here as looking "more tired than a shemale street walker in San Francisco's Tenderloin on a Saturday night". In comparison with more modern browsers such as Opera, noted Ashlee Vance, "it's just a rectangle".

With or without AOL's patronage, Mozilla-based projects will continue to flourish. But the new owner of the once iconic brand will have to decide whether continued investment in packaging the source as the Netscape Browser justifies the expense. ®

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