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Spokane, Washington  Est. May 19, 1883

Netscape Prepares For Battle As Browser War Heats Up

Associated Press

The head of Netscape Communications, the leading maker of software for browsing the World Wide Web, says his company still has a chance to defend its turf from Microsoft Corp.

Netscape Chief Executive James Barksdale on Tuesday said his company was intensifying its efforts to sell Internet-related software to businesses.

Barksdale’s comments sharply contrasted with the euphoria by investors barely a year ago over a company that came from nowhere to dominate the market for software that allows people to cruise the World Wide Web.

Facing off against Microsoft’s Bill Gates at a computer symposium that featured thousands of technology managers and other potential buyers of Internet software, Barksdale played down the “browser wars as the current blood sport in the popular press.”

Back in August 1995, investors snapped up the initial public offering of Netscape’s stock, giving the company a valuation of $2.2 billion in its first day of trading. Its annual revenue at the time was just a few million dollars.

Though Netscape still controls about 80 percent of the Internet “browser” market with its Navigator software, the company has been put on the defensive by the far bigger Microsoft.

“You keep your wits about you when everyone is telling you you’re going out of business in a year. … I would just say we have a fighting chance,” Barksdale said in response to a question about the challenge from Microsoft.

Microsoft’s Windows operating system is the heart of most personal computers but the company is not yet on top of the latest trend to hit computing. But Microsoft has declared the Internet its top priority. It has upgraded its browser, Internet Explorer, twice in the past year and is giving it away, while Netscape charges for Navigator.

Microsoft said Wednesday that it was releasing a test version of Internet Explorer 3.0 for use with the older Windows 3.1 operating system. Earlier versions of Internet Explorer worked with Windows 3.1, but not the more feature-laden Explorer 3.0 incarnation, initially designed for Windows 95.

Microsoft said it plans to have Internet Explorer 3.0 available for the MacIntosh and Unix operating systems by the end of the year.

Netscape is fighting back with a new-product blitz that focuses on the corporate “Intranet,” or computer networks within companies that allow employees to send e-mail, sift through databases, run programs and other functions just like users of the Internet.

“The last chapter has yet to be written,” Barksdale told the estimated 5,000 people attending the symposium, sponsored by the Gartner Group research and consulting firm.

Barksdale said there will continue to be demand for Netscape because companies want software that runs on a variety of different operating systems - not just Microsoft products. With that in mind, Netscape put 40 new products into production this summer.

“Most corporate business people aren’t going to change operating systems,” Barksdale said. “That’s why it’s not a winner-take-all game.”

He said Netscape was in a three-way race with IBM-Lotus and Microsoft for corporate business.

Analysts say that while Netscape has had to downsize its expectations, it probably will be able to expand its niche in the corporate Internet market, where it already gets most of its revenue.

This summer Netscape complained to the government that Microsoft was offering incentives to PC makers to not pre-install Netscape’s Web browser software on their machines.

Microsoft denied the charges and claimed Netscape was trying to deflect attention from the new Microsoft browser which it says is technically as good as Netscape’s.