If there is anything to be learned from the rumors that Netscape is seen as an acquisition target by a list of firms that reads like a who�s who of the software industry, it�s that the company has outgrown its browser-maker image.
Nearly a year after promising to move into the enterprise space, the company has earned enough stripes in the server software business to be considered by industry know-it-alls to be worthy of a partnership with, or a buyout by, companies as diverse as America Online, IBM, Oracle, and Sun Microsystems.
The stock feeding frenzy sparked by the rumors has quickly whisked away last month�s talk of big losses and first-ever layoffs at the company. It's also helping shore up the firm�s flailing share price.
Now, everyone is curious about who Netscape might play with and how. It would seem Mountain View could make a neat fit with any of the rumored suitors. Analysts slice and dice the company into rather different pieces to ultimately argue that logical deals could be made with any one of the four named admirers.
Take Sun Microsystems. Aside from sharing Netscape�s view of the Net as a business networking environment and a shared rivalry with Microsoft, the two companies actually have products that could play off each other well.
"If you put together the SunSparc server with the Netscape enterprise server software and the Kiva developer environment [recently acquired by Netscape], it would probably be the hottest hardware-software combination for the high-end market," said Chris Stevens, an analyst at the Aberdeen Group.
Kathey Hale, a Dataquest analyst, said she sees Sun as the most logical of the rumored partners, given Sun�s big Java push.
"They validate each other," she said of Sun's JavaSoft division and Netscape. "Together, they could create a serious Internet-centric platform to threaten Microsoft."
But Ted Schadler, an analyst at Forrester Research, observed that since "Sun is a hardware company, there would be less product synergy" than with some of the other rumored players.
And for all the seemingly compelling reasons for Sun to take Netscape under its wing, there are just as many arguments for a deal with Oracle.
"Databases are becoming a commodity and Oracle needs to get into the applications space," Stevens said - arguing again it is Netscape�s acquisition of Kiva that gives it an edge in the applications server market. Stringing together Netscape�s enterprise server software and browser as the front end to an Oracle database at the back "gives [Oracle] a point of leverage against Microsoft," he added.
Big Blue?
What irresistible reasoning leads to a vision of Netscape coming down the aisle with IBM or America Online?
Forrester's Schadler says that IBM and Netscape share a common vision of electronic commerce, and others see Netscape adding to Big Blue's reach in that sector.
"IBM�s e-business is a high corporate priority for them; they definitely understand the value of commerce on the Net," said Schadler.
Netscape could deliver some e-commerce solutions to IBM, said the Aberdeen Group�s Stevens, who added that while Big Blue has spent millions of dollars advertising its e-commerce business, "what you get is really their professional services, � a sales guy who�s going to cobble together something."
Others see IBM's current push to use its Lotus products as a vehicle to get big on the Net as an obstacle to pairing with Netscape. To them, fitting Netscape�s technology into that strategy has the smell of a mess.
"What IBM needs to create is a software business unit. Netscape would just be something they�d have to go through product-by-product" to find the fit with Lotus, said Jon Oltsik, also a Forrester analyst. "It would be too much work."
AOL's Interest
A Netscape deal with America Online might seem odd at first glance, said Schadler. He adds, however, that one shouldn't be too quick to throw AOL out of the party. "They need a public Web site," he said. "...They could definitely find something to do with all those eyes."
In fact, selling off Netscape's cash cow homepage would allow the company to focus all its energy on the enterprise market.
"Tripod just got US$58 million," Aberdeen�s Stevens said of Lycos�s acquisition of the homepage building site earlier this week. "You gotta figure [Netscape] could get tens of millions if not hundreds of millions" for its site.
An unknown: What Netscape might want from a merger. A cash infusion? A partner with big clout in corporate offices - and the service and support to stand by its products - to get Netscape firmly in the door of the enterprise? Or a partner with which it can keep on pushing the Net envelope?
Neither Netscape nor any of the four reported suitors are talking. For now, Schadler offers the last word. He suggests a method to the rumor madness:
"It�s possible that these companies are spreading rumors about acquiring Netscape simply to scare off other potential buyers - to bolster Netscape�s stock, to strengthen Netscape and thus strengthen the anti-Microsoft coalition."
