dcsimg
RealTime IT News

Netscape To Post Loss, Shares Plunge

Netscape shares fell nearly 20% to $18.75 each as the Web software firm warns that it expects to post fourth quarter losses of between $85 million to $89 million, or $0.88 to $0.92 per share.

Before we slam this too much, however, $52 million was for nonrecurring merger-related charges, while an additional $35 million went for restructuring. So that's $87 million on a one-time charge.

Still, the loss highlights Netscape's rise and fall over the past three years. After its early lead and bragging rights, Netscape met an opponent with deeper pockets and an installed base to leverage in Windows--Microsoft (NASDAQ:MSFT).

Netscape pioneered the free distribution model, letting people download its popular Navigator browser for free, thus giving it a huge installed base itself.

Like it does so many times, Microsoft simply picked up on the formula and came out with its own flavor--Explorer. It is free while Netscape began to charge for its browser, which it had to since it had no multiple revenue streams like Microsoft.

In short, perhaps Netscape blew its lead in many ways and may need the strength of an IBM (NYSE:IBM) or Sun (NASDAQ:SUNW) to really compete in the future. Netscape up close in tomorrow's Internet Stock Report.