After hinting for weeks that it would follow Microsoft's lead and give away its Communicator browser for free, Netscape has announced that it will go one step further: it will also offer the sourcecode of its next generation Communicator 5 for free download. Analysts have reacted favourably to the move.
Netscape's decision to follow Microsoft in offering a free browser comes on the same day that Microsoft finally agreed to offer PC vendors a fully operational version of Windows 95 without Internet Explorer, opening the road for vendors to bundle Netscape Communicator instead.
Netscape's return to giving away its browser was generally expected. Recent research has shown the company losing market share to Internet Explorer - though according to Dataquest, Netscape still holds on to a sizeable 58 per cent chunk of the market. The importance of browser sales in Netscape revenue has steadily diminished, and is now down to about 13 per cent.
The standard edition of Netscape Communicator, which used to be priced at $49, is now available for free download and free distribution. The Professional edition, which adds a number of tools such as calendaring, now sells for $29.
Two weeks ago, Netscape warned that it would post a loss of about $80 million for its latest quarter and would lay off 13 per cent of its work force. Netscape has been hurt by Microsoft's policy of giving away Internet Explorer, and bundling it with Windows 95.
Netscape has not been very clear on how it intends to compensate for the revenue it is now giving up. The company has suggested that by increasing its browser market share, it will stimulate the sales of its server products such as Suitespot.
Also, Netscape is expanding its Web site to offer new, fee-based information services called Netcenter Premium Services. These will include news, business information, online shopping as well as Intranet hosting.
Netscape surprised analysts with its announcement that the sourcecode of its next generation browser will also be given away for free modification and distribution. This will allow ISVs to add functionality to the browser.
The first version to be offered in this way will be the developer's edition of Netscape Communicator 5, expected later this quarter. Jim Barksdale, Netscape's president and chief executive officer, said: "By giving away the sourcecode for future versions, we can ignite the creative energies of the entire Net community and fuel unprecedented levels of innovation in the browser market.
Netscape shares were up 1.4 per cent at $18.125 when markets closed on Thursday. Before Netscape's profit warning earlier this month, shares had traded at around $25.
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