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@Home teams with Microsoft

The cable-access company, which struck a deal two years ago with Netscape, joins forces with rival Microsoft to develop its broadband service.

Barely two years ago, @Home and Netscape forged a strategic partnership to make Netscape products a "foundation" of the @Home Network that would "define" cable-based Internet services to the home.

Today @Home turned to Netscape's biggest rival, Microsoft, to develop its broadband service. Both companies will collaborate on an @Home version of Internet Explorer 4.0 as well as incorporate Windows NT into the broadband network. Until now, @Home has only distributed a branded version of a Netscape browser.

@Home was quick to point out that it wasn't turning its back on Netscape, whose chief executive, Jim Barksdale, still sits on its board. The companies have another common bond: both are backed by venture capital firm Kleiner Perkins Caufield & Byers.

Still, today's deal is another example of the growing clout of Microsoft--this time in the market for high-speed cable Internet access. "It's a new market to extend their existing platforms," said Michael Harris, president of Kinetic Strategies, an industry consulting firm.

As previously reported, Microsoft's $1 billion investment in Comcast in June cuts into a territory already staked out by Netscape. Comcast also happens to be a business partner of @Home. At the time, Microsoft chief executive Bill Gates said: "It is imperative that we work together so Microsoft software fits with [Comcast's] system."

@Home and Netscape both downplayed the impact of today's deal on the earlier one with Netscape. "Nothing changes in our existing relationship with Netscape," said @Home spokesman Matt Wolfrom. "We're technology neutral and we support all platforms." When the Netscape deal was made, Microsoft didn't offer the same type of products, such as Internet Explorer 4.0, as Netscape did, he added.

"We don't think it's a big deal; they continue to deploy our software," said Edith Gong, group product manager at Netscape. "We think our momentum is strong." Gong said she couldn't comment on whether the pact might cut into Netscape's revenue with @Home.

"This technology initiative will provide users with a broad set of solutions for delivering broadband content," @Home chief executive Tom Jermoluk said in a statement. For example, @Home customers now have a choice of leading industry browsers, the company said. Netscape remains the dominant browser provider, but Microsoft says it is gaining market share.

@Home and Microsoft will incorporate Windows NT as part of the network infrastructure. @Work, the company's division that provides high-speed cable access to businesses, also will support Windows NT in its suite of small-business solutions.

"@Home's broad distribution combined with Microsoft technology will create new and compelling Internet experiences never before possible, such as near-CD quality audio, full motion video, and active desktop applications," said Cameron Myhrvold, vice president of Microsoft's Internet customer unit, in a statement.

The two-year-old deal with Netscape calls for @Home to license Netscape's client and server software to be used as the foundation for the @Home network. The technology has been deployed throughout the network. Both companies also agreed to work together to develop a customized version of the Netscape Navigator client software to be included with @Home.

Harris also said Microsoft has cut deals with Time Warner's Road Runner for its browser software. Road Runner and @Home are among the leading players in the burgeoning cable-access provider market.

@Home stock rose 1-5/8 to 22-1/2 in trading today.