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AOL goes west

Merging with Netscape will put several of the firm's most important operations--and several of its top execs--in Silicon Valley.

The newly restructured America Online, once derided by Silicon Valley insiders, will attempt to become a bicoastal company by keeping some top executives in California, according to Netscape vice president Mike Homer.

"We are shifting management of some really important operations to the West Coast," Homer, who will continue to run the Netcenter portal and browser development under AOL, said in an interview with CNET

In effect, AOL Interactive Services--which will be responsible for AOL's proprietary service, the Web site, CompuServe,, and Netcenter--will largely be managed from the West Coast, Homer said.

Netscape cofounder Marc Andreessen, now AOL's chief technology officer, will split his time between Silicon Valley and AOL's Dulles, Virginia, headquarters. Barry Schuler, who heads the interactive services division, will do likewise. Schuler ran Silicon Valley CD-ROM company Medior, which AOL acquired in 1995.

Announced to employees today, the reorganization creates four distinct product groups at AOL: interactive services, interactive properties, Netscape enterprise, and AOL international. The company also said it will cut between 350 and 500 jobs from Netscape and a similar number from its own operations, affecting about 10 percent of the company's total workforce of about 10,000. (See related story)

About three months ago, AOL executives decided they wanted to suffuse Netscape's capabilities within the existing AOL organization, Homer said. That decision produced senior management roles for some Netscape executives.

John Paul, another former Netscape executive, will head the AOL products engineering division within the Interactice Services unit, developing software that can be used by all those properties, based in Silicon Valley.

"That will help shift part of the development out here and make it truly bicoastal," Homer said. Paul's new organization will draw from employees who formerly worked on Netscape's enterprise software operation, but the bulk of those workers will go to AOL's new Netscape enterprise group, run by former Netscapers Barry Ariko, former chief operating officer of Netscape, and Steve Sauvignano, a senior executive in developing e-commerce software. The "joint alliance" with Sun Microsystems for e-commerce software, expected to take about 1,000 people from each company, will draw its AOL employees largely from the Netscape enterprise group.

In addition, former Netscaper Lori Mirek will head a new "business solutions" group within the interactive services group, which will target businesses as users of AOL products and its network.

Within the interactive services group, Paul's products engineering group will build what Homer called "a major new e-commerce platform" that can be used by all of AOL's online properties for new online shopping areas. Also, most of the content sharing will be among the various Web-based properties-Netcenter,, and

On Netcenter, AOL plans to expand its software store, formerly run by, into a mall with offerings from multiple software developers.

Homer predicts the portal will be faster to introduce new services, many drawn from AOL properties. Netcenter will beef up its community, chat, and bulletin board capabilities using AOL technology, he said. And the Instant Messaging 2.0 products, unveiled last week, will integrate more tightly with Web browser software.

Homer's group will retain responsibility for new client or browser software, with work continuing on version 5.0. Netscape's previous promise of tighter integration between Netcenter and its Web browser will continue under the new AOL regime, Homer said.

AOL will continue to use Microsoft's Internet Explorer as its default browser, in large part because of a deal that puts AOL's icon on the Windows start page. But Homer said the Microsoft contract will allow AOL to offer downloads of new Netscape browsers to AOL members.

Homer had no specific comments about where the cuts of 350-500 employees at both AOL and Netscape will come from. But he said staffing will be built around business plans and that no specific job categories or divisions are slated for large reductions.

"The best thing we can do is get this done as fast as possible," Homer said. AOL executives told employees today that decisions will be made within two weeks.