The terms of the acquisition were not disclosed.
Closely held Paper Software, in Woodstock, New York, employs 12 people and makes software for creating 3D Internet sites.
Separately, Netscape yesterday announced Live3D technology for adding VRML capabilities to its browser. A test version of a Navigator plug-in based on the new technology is available now to let users created and read VRML Web pages.
The plug-in uses a derivative of VRML called Moving Worlds that was endorsed yesterday by Netscape and 55 other companies. Moving Worlds will compete with a different and incompatible version of VRML that is being promoted by Microsoft.