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AOL negotiating Netscape-Excite deal

America Online's integration of Netscape into its business raises questions about the fate of a $70 million deal with Excite.

America Online's integration of Netscape Communications into its business raises questions about the fate of a two-year, $70 million deal with Excite.

AOL is in negotiations with Excite to either salvage or possibly cancel the content-sharing agreements between the search directory and Netscape Communications, AOL executive vice president Mike Homer told CNET News.com today.

Netscape's Netcenter portal, acquired by AOL this month along with the rest of the company, programs eight of its content channels under the deal with Excite--itself the target of another acquisition, by @Home Network. The Excite deal includes search technology licensing.

Under AOL, Netcenter could potentially stop paying for content that it can instead use free from AOL.com.

While Netcenter has a more tech-savvy, business-oriented focus, it still offers standard content channels for entertainment and children's listing. It is beginning to play up the services it offers to more mainstream users; for example, Netscape has been running television commercials touting Netcenter's wide range of content offerings.

Under the terms of the deal signed last year with Excite, either company could opt out if the other one were acquired. In this case, with both companies acquired, both have the option of canceling the deal.

AOL is in negotiations with Excite over the content-sharing deal, Homer said. Homer, formerly senior vice president in charge of Netcenter under Netscape, declined to elaborate on the negotiations.

Under AOL, Netcenter will remain an independent Web property for much the same reason that it interested AOL in the first place. Netcenter gets a lot of its traffic during daytime hours from more technologically sophisticated Web surfers who access the site from work, while AOL.com's traffic peaks in the evening, as less tech-savvy consumers dial into AOL's proprietary online service.

With both AOL.com and Netcenter under its control, AOL essentially stakes a significant claim on both hemispheres of the Web.

While the two Web sites target distinct audiences, a substantial overlap in administration, content, and services will give AOL the opportunity to cut costs, according to Homer.

"AOL has generally described their strategy to leverage across all their different properties and brands and that's true very much with respect to Netcenter," said Homer. "Netcenter will be able to take advantage of AOL's marketing and brand-building, and their business development group that does all the e-commerce deals."

Homer said he expected layoffs at Netcenter to be "proportional." AOL has said it will lay off between 350 and 500 people from Netscape, and an equal number from AOL.

As for his own plans, Homer said he plans to stay with AOL but also plans to take some time off in the near future. Married last year, Homer and his wife are expecting their first child in June.

Details of the merger will continue to emerge over the coming week, Homer said. AOL last week set a two-week time frame for notifying workers of their job status under the merged company.