February 16, 2000 5:05 PM PST

Netscape: from portal to media hub?

America Online is mulling ways to turn Netscape's Netcenter Web portal into a showcase of Time Warner's Web sites, according to AOL president Bob Pittman.

The company today announced You've got Time Warner that Netcenter and AOL's ICQ instant messenger client will use CNN.com's news headlines and stories throughout their services--a step that could provide a blueprint for how the two companies will promote each other's services pending their proposed multibillion-dollar merger.

Pittman said the Netcenter-CNN.com deal could be the tip of the iceberg in developing cross-promotions between Netcenter and Time Warner.

Netcenter could become a "platform for all of Time Warner's products," Pittman said in a presentation to investors at the Merrill Lynch Global Investor Conference in New York.

He also showed a prototype of how CNN could create its own branded browser powered by Netscape 6.0, the company's soon-to-be-launched software.

"CNN.com can live within this platform, and with it they can put 'Headline News'?and keep a persistent bar there," Pittman said during the presentation. "They can embed instant messaging, email, whatever they want to, using this as a template."

Netscape plans to launch Netscape 6.0 this spring. The software will include features such as email and instant messaging embedded in its code. And as with the CNN deal announced today, Netscape will allow other sites, notably Time Warner sites, to use its technology to create custom-branded browsers.

AOL executives have touted the company's planned multibillion-dollar merger with Time Warner as an opportunity for cross-promoting online and traditional media. For example, AOL plans to use its services to digitally distribute and promote Time Warner's recording artists. On the flip side, Time Warner could promote AOL through its films and magazines.

AOL executives have expressed confidence that the cross-promotion will work. As a testament to the strategy, they have stated that the combined company could realize an extra $1 billion in earnings before various deductions for interest, taxes, depreciation and amortization after its first year of operation.

Derek Brown, an equity analyst at W.R. Hambrecht, said AOL's distribution through its large audience would significantly boost Time Warner's Web presence.

Benefits aside, however, the combination of the companies could pose some difficult questions.

"Once AOL and Time Warner complete the merger, AOL will own a significant chunk of content that they would be wise to funnel through the distribution platforms that they've already established online," Brown said. "But the big question is: Do they promote their own content at the expense of others' content?"

 

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