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Netscape aims at ISP market

The firm launches a Web service to distribute customized versions of its Communicator software suite to ISPs and other firms.

Netscape Communications today announced a new Web service to distribute customized versions of its Communicator software suite to Internet service providers and other firms.

Mentioned yesterday by Netscape cofounder Marc Andreessen at the ISPcon trade show, the new service relies on 3M to create and package CD-ROMs.

"Now you can go to the 3M Web site, type in the name of the ISP and the home page for a custom browser for your service, and they will press the CDs that have your custom browser baked right on it," Andreessen said.

Netscape's new "Communicator-to-go" program launched yesterday at the 3M-hosted Netscape To Go Web site. It will launch on Netscape's Netcenter portal tomorrow.

Companies can order varying degrees of customization. The toolbar can include a link back to a firm's Web site, and the browser can come preloaded with bookmarks and email address settings.

Netscape offers Communicator free of charge, but firms ordering custom versions of the software through the new program will pay 3M between $1 and $5 per copy, depending on volume and the degree of customization. Turnaround on the orders will be seven days, according to Netscape.

Communicator-to-go is an effort by Netscape to stop the continued loss of market share by Navigator--the browser component of Communicator--to Microsoft's Internet Explorer browser. After an aggressive marketing and distribution campaign by Microsoft, Netscape has seen Navigator's market share fall from dominance to plurality status against IE.

A study released this week by International Data Corporation showed Navigator with 41.5 percent of the market, losing out for the first time to the combined share of Microsoft's IE and America Online's branded version of IE.

While Netscape has lost market share across the board, analysts have noted in particular its losses among business users. With its Netscape Unlimited Distribution program and today's Communicator-to-go announcement, Netscape is fighting to reverse that trend.

But IDC's numbers suggest that those efforts have not worked thus far. For medium and large firms, Navigator's market share fell to 47.1 percent by mid-year 1998 from 55.5 percent at year-end 1997, while IE rose a percentage point to 26.5 percent in the same period and AOL's browser fell from 10.2 percent to 7.8 percent.

Among small-business users, Navigator fell even more sharply, to 36.1 percent in 1998 from 45.7 percent in 1997. IE's share rose to within striking distance of Navigator's, to 31.5 percent in 1998 from 26.1 percent in 1997.

Netscape points out that IDC's data do not take into account a recent release of the browser--Navigator 4.06--as well as two public beta versions of Navigator 4.5.

Customization of the browser, ironically enough, may have skewed IDC's data for the medium to large-sized business category, according to IDC. The problem, said report author Joan-Carol Brigham, is that users with customized browsers may have thought their own company created the browser, rather than Netscape.

For medium and large firms, the market share for the "other" category--which included browsers made by Opera Software, Prodigy Internet, unidentified browsers, and others--more than doubled between year-end 1997 and mid-year 1998, to 19 percent from 9 percent.

Brigham praised Communicator-to-go as a step in the right direction for Netscape. She said that the company's best opportunity to increase distribution of the browser was in medium to large-sized firms, where Microsoft's progress has been incremental.

When it comes to large ISPs, however, Netscape may be too late.

"It sounds like a great program, but there's not a whole lot of apples left on the tree," Brigham said in reference to the large ISP market. "Microsoft has picked them all."

Microsoft's aggressive marketing of its browser and its integration of IE with the ubiquitous Windows operating system have brought the software giant the scrutiny of the antitrust division of the Justice Department, as well as that of 20 states.

For its part, Netscape plans to pursue the small and medium-sized ISPs, where it predicts more than 60 percent of new Internet users will be getting their browsers. Another target is content providers, which offer customized versions of Navigator to increase user awareness and loyalty to their site.

ISPs offering customized versions of Navigator include AT&T WorldNet, EarthLink, and Concentric.

Content providers offering customized Navigator include Bank of America, Samsung, and Snap. Snap is a joint venture between NBC and publisher CNET: The Computer Network.

CNET's Tim Clark contributed to this report.