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Netscape buys freeware directory

The software and portal firm purchases a small Internet directory that relies on "freeware" technology.

Netscape Communications today announced it has acquired a small Internet directory that relies on "freeware" technology, in an innovative effort to boost its Netcenter portal.

As previously reported by CNET, Netscape moved to acquire privately held NewHoo, which relies on search engine software called Isearch. The software is copyrighted but is freely available and freely distributable in source code "with very few restrictions," according to its Web site. The software was created in 1994 under a National Science Foundation grant, according to sources.

Shares of Netscape surged more than 17 percent, jumping 5.13 points to 34.38. The stock has traded as high as 44.5 and as low as 14.88 during the past 52 weeks.

NewHoo--whose name appears to be a takeoff on Internet directory giant Yahoo--uses volunteer editors to compile its directory.

The acquisition would appear to help fulfill two key strategies for Netscape: Add features and traffic to its Netcenter Web portal, as well as expand the use of so-called freeware on the Web.

"With the Internet growing rapidly and more services and content coming online each day, the community directory model pioneered by NewHoo offers the only solution to the problem of how to scale and organize the Web," said Mike Homer, Netscape's executive vice president, in a prepared statement.

Netscape joined the burgeoning freeware trend this year when it said the source code for its Communicator software suite, which includes the Navigator browser, would be offered free of charge. The decision stemmed largely from intense competition from Microsoft's own Web browser, Internet Explorer, which already was free. Netscape also embraced open-source software by launching the Mozilla Web site.

According to NewHoo's Web site, the company relies on volunteers for its services. The directory's stated goal is to "produce the most comprehensive directory of the Web by relying on a vast army of volunteer editors. The small paid editorial staffs at commercial directory sites can't keep up with submissions, and the quality and comprehensiveness of their directories have suffered."

It lists 105,151 sites and 24,455 categories compiled by a staff of 4,740 editors.

"We believe Netscape's spirit of open development as demonstrated by, combined with the portal strength of Netscape Netcenter, will enable us to build the most comprehensive and up-to-date Internet search service in the world," said Rich Skrenta, chief executive of NewHoo, in a prepared statement.

NewHoo has some fans on the Web already. One review reads: "What is so important about this difference is that it proclaims the democratic nature of the Web; it makes the statement that Web users should be able to define their favorite sites on their own, and not rely on a small staff at a company like Yahoo or Excite to make sites available for them."

As reported, Netscape recently has been expanding its site with new features and making acquisitions to add users. Last week, for example, the company said it bought AtWeb, a Web site service and promotion company, to enhance Netcenter's small-business channel.