Netscape stock hit on SEC filing

Netscape (NSCP) shares fell 15.5 percent today following a quarterly filing with the Securities and Exchange Commission in which it cited a potential slowdown in growth.

Netscape shares tumbled to 29-1/4 at the market's close, down 5-3/8 from yesterday.

The company, in its filing yesterday, outlined concerns about Microsoft (MSFT) and its effect on its business.

One point of concern was Microsoft's possible use of comarketing funds and other inducements to have Web sites developed exclusively for the Internet Explorer browser or using technology that may only be used by Explorer.

Another lingering issue was the potential for Microsoft's success in promoting widespread adoption of its ActiveX technology.

"If Microsoft is successful in promoting widespread adoption of its ActiveX technology as an alternative to Java or promoting the widespread adoption of proprietary extensions of Java, Netscape's business, operating results, and financial condition could be materially adversely affected," the filing stated.

In addition, Netscape cited Microsoft's penetration of its software into Netscape's installed base of PC users as increasing pricing pressure on the company.

The Internet software company also noted it expects a substantial portion of its recent acquisitions to be written off as in-process research and development in the quarters that the deals close. Netscape recently purchased DigitalStyle, a Web graphics tool vendor, and Portola, a messaging system.

As a result of the write-offs, the company's historical revenue and net profit growth are not expected to be sustained during those quarters. The transactions are currently expected to close in the second or third quarter.

Netscape last month announced it would purchase both companies in a stock swap valued at $56 million.