CeePrompt! Computer Connection

Originally published Monday, November 30, 1998 

Information highway clogged with dollar signs

The America Online-Netscape merger made huge headlines last week, not only because of the whopping $4.2 billion price tag, but because it's an event of profound historical significance. In the short run, it's a good deal for Netscape, whose stock price and dominance in the browser market has slipped steadily since Microsoft began bundling its proprietary browser, Internet Explorer, with the Windows operating system. Long term, however, the merger represents a huge power shift that will ultimately change the flavor of the Internet forever.

In the merger, AOL will gain control of Netscape's landmark Web browser, the Netcenter portal site and Netscape's electronic-commerce software. This heavily positions the home/consumer based AOL to emerge as a viable force in the business sector. This has historically been an area of weakness for the commercial provider, famous for novice users, chat rooms and junk mail.

An added three-year, $500 million licensing agreement between AOL and Sun Microsystems sweetens the deal and solidifies the supremacy of AOL in the electronic commerce market. Many analysts further predict that the combined Netscape-Sun "know how" will eventually challenge Microsoft's Windows dominance in the operating system arena, by capitalizing on Sun's Java technology. This prospect alone is enough to cause Bill Gates sleepless nights.

Netscape's founder, Marc Andreesen, developed the first browser, Mosaic, in 1992 while still a student at the University of Illinois. This milestone event would forever change the look of the World Wide Web and give millions of users easy access to an Internet world that was heretofore strictly the domain of techies and academia. A browser is software that acts as your window to the Internet, enabling you to easily view documents and traverse the vast labyrinth of the Net.

When Netscape debuted in 1994, it was the leader in browser technology. So popular was Netscape's software that many users believed that Netscape was, in fact, the Internet. But the focus has shifted in the last five years away from technology development to consumer commercialism. Netscape was lagging in this area until it developed its Netcenter portal site within the last year.

A "portal" is a Web site that offers a wide variety of resources and services, such as e-mail, forums, search engines and online shopping malls. America Online, CompuServe and Prodigy were the original portals that organized online content for members using their proprietary software. Since the Web and Internet have become friendlier, however, Web portals are now popping up all over the Net.

Since Web portals require no special software, just a browser, companies requiring special software, like AOL, are finding themselves at a competitive disadvantage. The merger with Netscape will enable AOL to move its multibrand online content and commercial offerings to the Netcenter portal, thereby allowing users with just a browser access to the huge array of AOL offerings. It's estimated that the AOL-Netscape merger will now capture 70 percent of the Internet viewership.

Whether this will be a change for the better or worse will be up to personal opinion, but it definitely signals the end of an era and ushers in a new Internet, ultimately controlled by just a few players. Merger mania is at an all-time high as Internet companies partner with corporate America, to vie for the lion's share of future e-trade dollars.

The InfoSeek portal site has already partnered with Disney Corp. and C/Net's Snap! boasts a partnership with NBC, which is also partnered with Microsoft. AltaVista is owned by Compaq Computer Corp. Yahoo!, the king of all Internet portals, apparently has enough muscle and clout to stand on it's own for the time being. Lycos and Excite remain independent, but are prime for takeover if they're going to survive long-term as viable Web portals. Interesting sidenote: Excite has a $90 million, two-year traffic- and content-sharing deal with Netscape that doesn't expire until June 2000. According to Netscape, the Excite deal will not be affected by the merger.

Without waxing too philosophically or betraying my Republican bent, I must admit I'm saddened by the overall sell-out to commercialism and the almighty dollar on the Internet. The evolution from information exchange to dollar exchange, however, was bound to happen sooner or later. It's just too powerful and pervasive a medium, not to be capitalized on as a preeminent marketing vehicle. I just hope Internet innovation and growth continues and that we're not ultimately spoon-fed content by just a handful of corporate giants.

Cathi Schuler is a consultant, technical writer and owner of Cee Prompt! She can be reached by e-mail at cschuler@uop.edu or cschuler@ceeprompt.com or by mail c/o The Record, P.O. Box 900, Stockton, CA 95201. She is on the Internet at: http://www.ceeprompt.com. Click here for past archived columns.

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