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NetObjects slashes price of Fusion 2.0

NetObjects sees stiff competition in the Web tool market and has cut the price of its popular Fusion 2.0 toolset to attract new business.

Aiming to rapidly grow its user base, Web development tool maker NetObjects today slashed the price of its Fusion 2.0 toolset and announced that it is building a high-end version of the package.

The company cut the price of NetObjects Fusion from $495 to $295, and is offering a competitive upgrade of $195 from tools such as Microsoft FrontPage, Adobe PageMill, and SoftQuad HotMetal Pro. The upgrade is in effect until October 31.

"We are opening our market space, and are letting a lot more people afford our product," said Samir Arora, NetObject's chairman and CEO.

Arora said the company, which counts IBM and AT&T among its financial backers, is now focusing on growing its market share, after a successful year of revenue growth.

"When you have very strong corporate partners, as we do, it lets you focus on putting together the right business strategy," said Arora.

He said the company is expanding its user base in anticipation of a new team-based version of Fusion, which will allow multiple Web developers to collaborate on complex Web site development projects.

The company has not disclosed a name or pricing for the new team version. Arora said it will debut before year's end.

Along with Fusion, NetObjects markets a low-end version of Fusion, called Fusion Personal Edition, though OEM partners, such as Compuserve. Analysts say that a team development version will give the company strong competitive position vs. other site building tools, as founders position the company for an initial public offering.

Just last month, Arora and other founders invested $1.5 million in the company, a move that analysts said foreshadows an impending IPO.

Arora has invested $1 million to help fuel the company's growth into a major, independent software company. Contributions from the three other founders, David Kleinberg, Clement Mok, and Sal Arora, brings their total investment to $1.5 million.

This investment follows other NetObjects financing rounds including: an investment of an undisclosed amount by IBM in March 1997; $4.5 million from AT&T Ventures, Perseus LLC, and private investors in January 1997; $5.4 million from Norwest Ventures, VenRock Partners and private investors in February 1996; and a founding investment by Rae Technology LLC in November 1995.

Last month, sources told CNET's NEWS.COM that IBM's investment was upwards of $100 million.