AOL buys Netscape - official

Internet giant AOL announced today it will buy Netscape Communications in a deal valued at $4.2 billion (see Newswire 23 November).

AOL also announced that it has entered into a three-year development and marketing alliance with Sun Microsystems to accelerate the growth of enterprise class ecommerce and to develop next generation Internet devices.

The deal between AOL and Netscape is a stock-for-stock pooling of interests transaction in which Netscape stockholders will receive 0.45 shares of AOL common stock for each share of Netscape common stock. The acquisition is expected to be closed by spring 1999 when Netscape?s president, Jim Barksdale, will join AOL?s board of directors.

Netscape will continue to operate of its Mountain View, California headquarters when it join the ranks of Compuserve, ICQ and Digital City brands, which all operate under the AOL umbrella.

?The acquisition of Netscape is a big step forward for America Online and will greatly accelerate our business momentum. With Netscape, we will broaden our global audience at home and a work, and add world class technology to support an expanded range of America Online interactive product and services,? said Steve Case, AOL?s chairman.

The addition of Netscape will allow AOL to take advantage of having different brands sharing a common infrastructure. AOL said it will use its ICQ instant chat software, soon to be revamped as a portal, to promote the downloading and registration of the Netscape client software to its large community.

AOL also confirmed that it will continue to include Microsoft?s Internet Explorer browser in the AOL service.

Under the deal with Sun, AOL said it will work to develop a suite of easy to deploy end-to-end solutions to help users and Internet service providers to rapidly set up or enhance ecommerce operations.

AOL will receive more than $350 million in licensing, marketing and advertising fees from Sun. The two companies will sell Netscape branded middleware as well as ecommerce solutions, and are committed to develop new versions of Netscape Navigator and Communicator software clients.

A major focus of the alliance will be to use Sun?s Personal Java to offer AOL services across a range of next generation Internet devices such as PDAs, mobile phones and pagers. This will help push AOL?s 'AOL Anywhere' strategy while promoting Java as a leading environment for the emerging crop of Internet enabled personal and business tools.

?By acquiring Netscape and working with Sun to provide ecommerce solutions, we will be able to broaden and deepen our relationships with business partners who need this additional level of infrastructure support, and to provide more value and convenience for Internet consumers,? commented Case on the Sun alliance.

?We share with Sun a vision for the future in which consumers will be able to access AOL brands anywhere, at any time, and from any device.?