By Polly Raymond, 24 November 1998 00:16
NEWS Netscape has officially confirmed rumours that it may be bought out by AOL and Sun Microsystems, but stated that a final agreement has yet to be reached. AOL is the main acquirer in the deal, rumoured to be worth around $4bn, and will take on Netscape's content business. Sun will resell the company's software through a joint marketing partnership. Netscape's statement, released on Monday afternoon, said the discussions involve a stock-for-stock transaction whereby Netscape stock holders will receive 0.45 shares of AOL stock for each one of Netscape's. Clive Longbottom, strategy analyst at CSL Consulting, told Silicon.com: "It makes an enormous amount of sense for Netscape, which isn't exactly going great guns at the moment." Longbottom said Netscape's technology will fit in well with Sun's Network-centric framework while AOL will need Netscape's help on the online front as it has fallen out of favour with Microsoft recently. The bottom line for Netscape is that it will never be able to compete on the desktop with Microsoft or even against open source products, according to Longbottom. "Communicator will not succeed now the corporate environment is shifting towards NT and Apache," he said.
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