MS, Netscape agree on Individual
Customized news delivery company Individual is profiting from its newly announced partnership with Netscape. Microsoft, no doubt, is pleased as punch.
Microsoft happens to own 7.2 percent of Individual, which makes it one of the top three stakeholders in the company. The software giant made the investment in 1995. A Microsoft employee--currently Gregory Stanger, director of business development and investments--also sits on Individual's board of directors.
Netscape announced Wednesday it was tapping Individual to provide customized business news for Netscape's Web-based Netcenter service. (See related story) That announcement helped boost Individual's stock dramatically--though it's still under $10 a share--which should put even more money in Redmond's coffers.
The Individual-Netscape deal underscores the interconnectedness of the Internet business, where once in a while even the fiercest rivals can't avoid mutually beneficial relationships.
"Microsoft and Netscape are the two dominant players in the market for people accessing, using, and building products on the Internet," said Individual vice president of media business Rusty Williams. "It's logical to have relationships with both companies."
Microsoft's investment was incidental to the value Individual brought to the table, according to Jerrell Jimerson, Netscape's director of online content services.
"We wanted to find a partner to provide a compelling set of information, news, and research," Jimerson said. "Individual does a really great job in that space."
One financial analyst was surprised by the leverage Individual was able to pull from the deal. "It's very favorably skewed toward Individual, relative to other deals Netscape has made with content providers," said Keith Benjamin of Robertson Stephens.
Even before the Netscape deal went public, when the stock was lingering near its 52-week low of 2-5/8 last month, Benjamin was bullish on Individual's prospects.
"With more subscribers than many major media companies, we believe Individual can become one of the more profitable Internet/intranet services over the next few years," Benjamin wrote in a report at the end of August.
Benjamin cited specifically the company's opportunity to bundle advertising with its news deliveries. If Netscape can deliver the eyeballs to the Netcenter site, Individual's control of the Industry Watch section should expand its advertising opportunities.
"We will control the ad sales; we will serve the ads, sell the ads, and price the ads," said Williams. "It really helps us expand circulation and inventory."
Netscape's Jimerson declined to say what advertising model the company is using in other sections of Netcenter, stating only that each section--the guide run by Yahoo or the software store run by Cybersource, for example--has its own model.
Individual stock rose a full point today to close at 6-5/8. It has a way to go, though, to reach its 52-week high of 11-7/8, which it hit in the spring.
Microsoft representatives were not available for comment.