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Netscape meets the Street

As AOL acquires Netscape in a stock deal valued at $4.2 billion, Netscape reports record revenues of $162 million, in line with Wall Street expectations.

As America Online today announced it had acquired Netscape Communications in a stock deal valued at $4.2 billion, Netscape reported record revenues of $162 million for the fourth quarter, in line with Wall Street expectations.

Internet pioneering firm Netscape pulled in net income totaling $2.7 million, or 3 cents per share, as expected by a consensus of analysts polled by First Call.

The company that popularized the Internet with its easy-to-use browser technology said it saw strong growth in its Netcenter portal business, with revenues increasing 24 percent to $48 million. Revenue from its enterprise software and service business increased 2 percent to $38.7 million.

Because Netscape recently changed the date of the end of its fiscal year, year-ago figures are not an accurate reflection of the company's performance in the most recent quarter.

Net income, excluding amortization of goodwill generated from prior acquisitions, totaled $4.2 million, or 4 cents per share, for the quarter.

Netscape's international business also grew, with revenue from international sales increasing to 13 percent of Netscape's overall revenue.

"Results for the fourth quarter demonstrate that Netscape's Netcenter and Enterprise software and services businesses continue to attract customers worldwide who want to participate in the Net Economy," said Netscape president and CEO Jim Barksdale.

With AOL's acquisition of Netscape, Barksdale will be joining America Online's board of directors after the transaction closes.

On the enterprise side of its business, Netscape announced several significant agreements. In September, Netscape and Lucent Technologies announced that Lucent had licensed the Netscape CommerceXpert suite of Internet commerce applications to create Lucent ECommerce Solutions. Netscape also recently announced strong momentum for its security products, with more than 20 vendors, including Check Point Software Technologies, RedCreek, and Litronic.

Of course, the dynamics of Netscape's enterprise business is likely to look different with AOL's three-year deal with Sun Microsystems, in which Sun will increase distribution and development of Netscape's enterprise software for corporate customers.

AOL's acquistion of Netscape will also impact its portal business as the two strongly branded companies join their recourses.