Netscape, AOL Pondering Partnership

America Online Inc.
and Netscape Communications Corp. are
reportedly discussing a variety of new partnerships, including a possible
deal that would put Netscape’s Navigator browser into AOL’s software —
either as a replacement for Internet Explorer or as a second choice.

According to The Wall Street Journal, the talks began about two
months ago and have involved top officials from both companies. However,
the sources emphasized a deal is not imminent. Other possibilities the two
companies are exploring include stronger marketing agreements to jointly
promote
Netscape’s Netcenter portal. AOL is also said to be considering taking a
stake in Netscape which would give it a seat on its board of directors.

AOL’s relationship with Microsoft
Corp. has come up several times during the government’s antitrust
lawsuit against the software giant. In 1996,
Microsoft secured a deal to bundle Internet Explorer into AOL’s access
software. That deal gives AOL the right to terminate the agreement Jan. 1,
1999 and AOL is reportedly considering other options, including Netscape’s
Navigator. AOL also sees Microsoft as an increasing threat with its efforts
to build up its MSN portal and that its WebTV service caters to
the same market as AOL.

AOL also has more leverage now than in 1996, having grown its membership
base from 5 million to more than 14 million.