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AOL buys Netscape, joins Sun in Java deal
November 24, 1998
Web posted at: 350 PM EST
by Rebecca Sykes
(IDG) -- America Online today announced it will acquire
Netscape in a stock-for-stock transaction worth $4.2
AOL also announced a strategic alliance with Sun
Microsystems, including plans to develop Internet
devices using Sun's Java programming language.
Under the terms of AOL's deal with Netscape,
Netscape stockholders will receive 0.45 shares of
AOL common stock for each share of Netscape
stock, according to a statement from AOL. Jim
Barksdale, Netscape's president and chief executive
officer, will join AOL's board of directors after the
deal closes, the statement said. Pending regulatory
approval, the acquisition is expected to close in the
second quarter next year, it said.
AOL will continue to offer Microsoft's Internet
Explorer to its AOL online customers, according to
the statement. Netscape's Navigator browser is
locked in battle with Explorer, and some observers
had speculated that an AOL-Netscape deal could
eject Explorer from AOL's offerings. AOL will also
offer Netscape client software to its users,
downloadable from the Web using AOL's ICQ instant
messaging capability, according to AOL.
AOL's deal with Sun, which is separate but related to
its Netscape acquisition, encompasses a three-year
development and marketing agreement, according to
AOL. AOL and Sun together will develop the next
version of Netscape's Navigator and Communicator
software clients and AOL will use Java in its
e-commerce offerings, the company said.
AOL and Sun also will jointly develop a suite of
easy-to-deploy software designed to help companies
and Internet service providers engage in electronic
commerce, according to AOL. AOL will buy systems
and services from Sun worth $500 million at list price
through 2002, AOL said. For its part, AOL will
receive more than $350 million in licensing, marketing
and advertising fees from Sun, AOL said.
A media conference call will be held today at 12:00
PM EST, with Steve Case, chairman and chief
executive officer (CEO) of AOL; Bob Pittman,
president and chief operating officer (COO) of AOL;
Jim Barksdale, president and CEO of Netscape; Scott
McNealy, president, CEO and chairman of Sun and
Ed Zander, COO of Sun.
Rebecca Sykes is a Correspondent at Large for the IDG News Service in Boston.