It's caught in a brutal new browser war with Microsoft

A year ago, when it looked as if Microsoft Corp. was going to turn the Web-browser industry into an unprofitable commodity market, Netscape Communications Corp. shifted gears. The Web-browser pioneer said it would focus instead on selling more expensive ''server'' software for running corporate Web sites.

But it turns out Netscape can't escape the browser battle. A browser may be a freebie, but it's strategically crucial: A hot browser brings traffic to the Web site and spurs sales of related server software and other Webware.

That's why Netscape is scrambling to stay ahead in the browser wars. It is championing a scheme called meta content framework (MCF) that would let PC users view Web information alongside what's stored on their PCs, just as Microsoft's upcoming Windows 98 will do. ''That takes a lot of sizzle out of their advantage,'' says Netscape CEO James L. Barksdale.

And to capitalize on its current browser lead, the company announced on Sept. 3 that it will turn its Web site,, into an online service, called Netcenter. It will offer news, information, online purchasing, and other services to businesses. The basic service is free, but Netscape plans to charge a subscription for some portions and collect ad and transaction fees.

That revenue could help Netscape survive a prolonged face-off with Microsoft, which can easily outspend and underprice its rival on Web software. The software giant will release a new version of its Internet Explorer browser on Sept. 30. Early next year comes Windows 98, which will have a built-in browser. Win98 will come standard on millions of new PCs.

Says Daniel Rimer, analyst with Hambrecht & Quist: ''Windows 98 will refuel the browser wars.'' Gentlemen start your engines.

By Amy E. Cortese in New York, with Steve Hamm in San Francisco


Updated Sept. 4, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.
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