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Microsoft gets pushy in content fight

Some content providers say Microsoft is using strong-arm tactics to win preferential treatment for Explorer in the push wars.

They're like two TV networks vying for the hottest prime-time lineups.

The competition between Microsoft (MSFT) and Netscape Communications (NSCP) for content to fill up their new push channels is getting cutthroat.

As it prepares to launch Explorer 4.0 this summer, Microsoft has been offering companies premier slots in its lineup of channels that will broadcast programming. But these offers extend only to companies that agree to promote Microsoft's push technology exclusively, sources have told CNET's NEWS.COM.

None of the publishers would comment publicly on the matter, but the sources said Microsoft's efforts were aimed at companies that already have announced plans to develop channels for Netscape's Netcaster technology. And these companies, sources say, don't appreciate the arm-twisting.

Microsoft and Netscape already are fierce competitors in the Web browser market, but the creation of push technology has intensified their battle. Push, or Webcasting, enables publishers to automatically broadcast information "channels" to personal computers without requiring people to type a Web address into their browsers.

Both companies are trying to compete for the largest possible audience for the ad hoc information networks being bundled with their browsers. And, as in the television business, success means assembling a compelling lineup of material that will draw the most viewers.

Technically speaking, any publisher can develop a channel for Netcaster and Explorer 4.0 using standard Internet technology. But Netscape and Microsoft are reserving "premier" channels for a select group of information providers.

According to a source close to one multibillion-dollar media company, Microsoft promised one of these featured spots on its browser, but only if the company agreed to not promote any content that it publishes on Netscape's Netcaster--in other words, requiring it to exclusively promote the content published on Microsoft's channels.

Microsoft is asking its information providers to promote their Internet Explorer 4.0 channels with an icon on their Web sites, said the source, who asked not to be named. Microsoft stopped short of asking the company not to develop at all for Netcaster.

Microsoft and the media company are still negotating the deal, which would last for one year.

Sources say Microsoft is planning on offering about ten premier content providers, including its own MSNBC and Microsoft Network, as well as such content as children's programming from Disney.

Many other Microsoft channels will be provided on a lower "gold" level of Explorer 4.0. Netscape will initially have around 20 premier channels for Netcaster, including ABCNews.com, CNNfn, and CNET: The Computer Network.

Microsoft would not comment on the terms of any of its content agreement but said publishers are free to develop channels for Netcaster or any other push technology. "This is all good, clean, healthy competition," Yusuf Mehdi, director of marketing at Microsoft, said today.

Mehdi denied that Microsoft's negotiations with publishers amount to antitrust violations, as some content providers contend.

In the past, Netscape has complained to the Justice Department that the software behemoth has used its dominance operating systems to get Internet service providers and PC makers to bundle the Microsoft browser with their products, instead of Netscape's Navigator. The Justice Department is still investigating the matter.

But some publishers have a different perspective. "You would have thought by now that Microsoft would know where to draw the line, but apparently they're trying to find every way around it," said one source now in discussions with Microsoft.

Netscape, for its part, admits to luring publishers that promote Netcaster with offers of featured status on the Netscape "Channel Finder," a menu of information providers housed on the company's Web site.

But executives said Netscape will not try to prevent its partners from promoting channels developed for Explorer 4.0. At the same time, Netscape charges that Microsoft is trying to leverage its dominance to gain an unfair advantage with publishers.

"They're saying if you want a premier position [in IE 4] that you can only promote the Microsoft channel," said Mike Homer, senior vice president of Marketing at Netscape.

Microsoft hasn't contacted all of Netscape's push partners about developing channels for Explorer 4.0. But Bob Ingle, president of Knight Ridder New Media, said he had other reasons for not working with Microsoft.

"Microsoft has not approached us in any fashion," Ingle said. "We are weary of Microsoft and cooperating with them on things like this because we see them coming at us in local markets for advertising dollars."

One of Microsoft's closest push allies, PointCast, suggested that all is fair when it comes to promotional agreements between Microsoft and potential partners.

"There's a battle between these two companies, and it wouldn't surprise me if either company wasn't using its position or co-marketing tools to use one platform over the other," said Chris Hassett, chief executive of PointCast.

Neither Hassett nor Silicon Valley attorney Gary Reback, who has led several other legal challenges against Microsoft on behalf of Netscape and other competitors, would comment on the issue of whether Microsoft's actions open antitrust questions.