Netscape Ups Ante Browser Leader Gets Jump On Microsoft, Forms New Company To Focus On Consumer Devices

Netscape Communications Corp., eyeing infant areas where archrival Microsoft Corp. lacks a presence, has formed a new company to put its popular Internet software into televisions, phones, video-game players and other consumer products.

The company said Monday that Navio Communications Inc. is working with IBM, Oracle and consumer-electronics companies such as Sony to produce inexpensive, everyday devices linked to the Internet. The first such products are expected next year.

Netscape’s Navigator browser software already is used by about 80 percent of personal computer users to access and maneuver through the World Wide Web. But Netscape, through Navio, now hopes to set an overall Internet standard by putting versions of Navigator into a wide range of electronic goods.

“It’s a huge opportunity for us to address what we think will be a very explosive market,” said Marc Andreesen, Netscape’s senior vice president of technology. “It also means to Netscape the opportunity to take Navigator and have it run everywhere - all devices broadly.”

The move puts a twist on Netscape’s bitter fight with Microsoft over the Internet. Microsoft, which makes the software that runs more than three-quarters of all PCs the primary devices for accessing the Internet - is challenging Netscape with its own Web browser.

That rivalry grew more intense last week, when Netscape asked the Justice Department to investigate whether Microsoft is using its dominance in PC operating software to unfairly influence computer makers and others into giving its software greater prominence over competitors like Netscape.

“This sets the battle in a new field,” said industry analyst Gary Arlen, president of Arlen Communications Inc. in Bethesda, Md. “It’s an exciting move, an important move for Netscape to move beyond the desktop and beyond the PC, which has been its sole arena so far.”

Microsoft has been trying to produce versions of its operating software and browser for hand-held computers and other Internet-linked devices. But it has not yet explained how they will work, said Tim Bajarin, president of Creative Strategies Research International in San Jose, Calif.

But don’t expect Microsoft to take too much time in doing so now following Netscape’s latest salvo, he said.

“I’m sure they don’t want the mindset of digital appliance makers to be pushed strictly to Netscape,” Bajarin said.

Shares of Netscape rose 50 cents to close Monday at $38.50 on the Nasdaq Stock Market. Microsoft shares closed down 37-1/2 cents at $122.87-1/2, also on Nasdaq.

Netscape, based in Mountain View, Calif., said half a dozen other investors were involved in Navio but would not reveal their identities. It said the company was working with IBM, Oracle and four Japanese consumer electronic concerns strong in the home-entertainment field - Sony, Nintendo, Sega Enterprises and NEC. It would not give details of the relationships.

Navio’s chief executive officer will be Wei Yen, a former Silicon Graphics Inc. vice president while Clark will be Navio’s chairman. The company has 50 employees but is expected to more than double this fall.

While known for its Navigator browser, Netscape makes most of its money from software for corporate computer networks. Netscape Chairman Jim Clark said the company started Navio so it could gain a foothold in consumer markets while still focusing on its core business.

Andreesen said that in the next five years, Navio could help versions of Netscape Navigator reach 500 million devices, from pricey and sophisticated computers to such inexpensive, easy-to-use and devices as cell phones.

Bajarin and Arlen said Netscape could have an edge over Microsoft because its browser works with computers running Microsoft’s Windows, Apple’s Macintosh OS and several other kinds of operating software. But Microsoft’s Internet Explorer works only with PCs running Microsoft’s Windows 95 and Windows NT operating systems.