Barely two years ago, @Home
forged a strategic partnership
to make Netscape products a "foundation" of the @Home Network that would
"define" cable-based Internet services to the home.
Today @Home turned to Netscape's biggest rival, Microsoft, to develop its broadband
service. Both companies will collaborate on an @Home version of Internet
Explorer 4.0 as well as incorporate Windows NT into the broadband network.
Until now, @Home has only distributed a branded version of a Netscape browser.
@Home was quick to point out that it wasn't turning its back on Netscape,
whose chief executive, Jim Barksdale, still sits on its board. The companies
have another common bond: both are backed by venture capital firm Kleiner Perkins Caufield & Byers.
Still, today's deal is another example of the growing clout of Microsoft--this time in the market for high-speed cable Internet access. "It's a new
market to extend their existing platforms," said Michael Harris, president
Strategies, an industry consulting firm.
As previously reported, Microsoft's $1 billion investment in Comcast in June cuts into a territory
already staked out by Netscape. Comcast also happens to be a business
partner of @Home. At the time, Microsoft chief executive Bill Gates said:
"It is imperative that we work together so Microsoft software fits with
@Home and Netscape both downplayed the impact of today's deal on the
earlier one with Netscape. "Nothing changes in our existing relationship
with Netscape," said @Home spokesman Matt Wolfrom. "We're technology
neutral and we support all platforms." When the Netscape deal was made, Microsoft didn't offer
the same type of products, such as Internet Explorer 4.0, as Netscape did,
"We don't think it's a big deal; they continue to deploy our software,"
said Edith Gong, group product manager at Netscape. "We think our momentum
is strong." Gong said she couldn't comment on whether the pact might cut into
Netscape's revenue with @Home.
"This technology initiative will provide users with a broad set of
solutions for delivering broadband content," @Home chief executive Tom
Jermoluk said in a statement. For example, @Home customers now have a
choice of leading industry browsers, the company said. Netscape remains the
dominant browser provider, but Microsoft says it is gaining market share.
@Home and Microsoft will incorporate Windows NT as part of the network
infrastructure. @Work, the company's division that provides high-speed
cable access to businesses, also will support Windows NT in its suite of
"@Home's broad distribution combined with Microsoft technology will create
new and compelling Internet experiences never before possible, such as
near-CD quality audio, full motion video, and active desktop applications,"
said Cameron Myhrvold, vice president of Microsoft's Internet customer
unit, in a statement.
The two-year-old deal with Netscape calls for @Home to license Netscape's
client and server software to be used as the foundation for the @Home
network. The technology has been deployed throughout the network. Both
companies also agreed to work together to develop a customized version of
the Netscape Navigator client software to be included with @Home.
Harris also said Microsoft has cut deals with Time Warner's Road
Runner for its browser software. Road
Runner and @Home are among the leading players in the burgeoning
cable-access provider market.
@Home stock rose 1-5/8 to 22-1/2 in trading today.