March 25, 1998 10:10 AM PST

Netscape outlines Web strategy

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Netscape (NSCP) has entered the crowded ring of companies that want to be all things to all Web users, all of the time.

The software company said today that it is forming a new unit that will concentrate solely on its Web-site business, as reported yesterday by CNET's NEWS.COM. The Web-site division will be focused on the company's online service--Netscape Netcenter--in an effort to turn it into a hub for Internet users.

Jennifer Bailey, vice president of the Web site, said it makes sense for Netscape to direct all of its resources to one business. She said that Netcenter now will have its own development, operations, sales, and marketing groups, which will work together on a single set of business objectives.

"This [move to create a new business unit] is a major indicator about whether Netscape was serious about this business," said Bailey. "We think it is a big opportunity for the company overall, and this should really quell any more rumors [about Netscape selling off the Web site]."


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The formation of a new business unit another example of Netscape's effort to beef up its Web site, in an effort to make it an Internet "portal" on a par with the likes of Microsoft (MSFT), Yahoo (YHOO), Excite (XCIT), and America Online (AOL), among others.

It also shows how Netscape's business is changing now that it is offering its Internet browser for free. The Web site currently accounts for a major chunk of Netscape's sales.

"Our plan is to do many similar things as the portals," said Bailey. "It will be similar in that each is trying to be a daily usage focal point for users coming onto the Web."

Netcenter, she said, will differentiate itself from its competitors by having a strong focus on business users, a strategy meant to take advantage of the fact that Netcenter's traffic peaks during the day, unlike AOL's, which peaks in the evening.

The Web-site unit will be headed by Mike Homer, who will hold the title of executive vice president and general manager. Homer, who currently is Netscape's executive vice president of sales and marketing, will report directly to chief executive Jim Barksdale. Barksdale will handle some of Homer's former duties on a temporary basis during the transition.

New features planned for the Netcenter site are expected to include 10 to 15 content channels, community chats, search capabilities, and free email. As reported, Netscape is expected to detail its partnerships for the new Net effort within one to two months. In some cases, Netscape is negotiating deals with the very search-engine companies that it may compete against, another example of the high-tech industry's trend toward "coopetition."

Nevertheless, Netscape's competition in the Net space will be fierce. The main challenge that lies ahead for the company is to create compelling features that will draw a loyal audience. Currently, many users go to Netscape's page simply because it is a default site for Netscape browser users.

Since it launch last September, Netcenter has registered 3.6 million members.

 

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