07/01/96 LOTUS' POSITION: ALONE FOR NOW

LOTUS' POSITION: ALONE FOR NOW
Netscape says no to an Internet server alliance
In early June, a group of Lotus Development Corp. executives made a secret trip to Mountain View, Calif., to visit Netscape Corp., maker of the No.1 Web browser. Netscape co-founder Marc L. Andreessen had expressed interest in a new Net version of Notes, Lotus' popular software program that helps workers collaborate. The Lotus execs saw their chance: They just had to persuade Netscape to adopt elements of Notes, rather than spend months building a competing technology.
The issue was more than academic for IBM, which paid $3.5 billion for Lotus last July. Big Blue has spent the past year defending its acquisition against criticism that the Internet will soon undercut Notes by providing a cheaper alternative. An endorsement by Netscape would help quell the critics. Most important, an alliance between Netscape and Lotus might be both companies' best hope for fending off Microsoft Corp.'s advances onto the Internet.
TIME LIMIT. But the best-laid plans...Andreessen was impressed, but not enough to drop Netscape's efforts. It had just paid $172 million for Collabra Software Inc., a maker of Notes-like programs. A less ambitious partnership was explored, involving joint efforts such as uniting Notes' E-mail with Netscape's Web browser. But no go.
Lotus insiders say the two sides just couldn't agree on details in time for a press conference to unveil the new Notes version. They were still negotiating on the eve of the announcement, but on June 19, Lotus execs took the stage at a New York press conference alone to unveil Domino, a new Web-friendly line of Notes software. Instead of a Netscape deal, they unveiled a new Internet version of Notes. Analysts say Domino, due at yearend, is top-notch. Says David Marshak, a consultant with Patricia Seybold Group: ``This will give Microsoft a run for its money.'' And maybe Netscape, too.
By Amy Cortese in New York