Netscape to Create a New Unit
That Will Focus on Web Site

By KARA SWISHER
Staff Reporter of THE WALL STREET JOURNAL

Netscape Communications Corp., the once-hot Internet-software pioneer that has seen its financial results and stock price wither in recent months, announced a reorganization Wednesday creating a new division focusing exclusively on its Web-site business.

The move underscores the strategic and financial importance that Netscape officials are placing on its popular Internet site. The division will be headed by Mike Homer, who has long been in charge of sales and marketing at the company.

Under the new structure, Mr. Homer will become the executive vice president and general manager of the Web division, which will include group engineering, sales, marketing and other employees who will be devoted exclusively to Netscape's Web presence.

Mr. Homer will report to Netscape chief executive Jim Barksdale. Mr. Barksdale will temporarily take over the sales and marketing of Netscape's enterprise products, including its browser and server software and consulting services, while the company searches for a new executive to run that division. The duties of Netscape co-founder Marc Andreessen, who is in charge of product development at Netscape, and Chief Financial Officer Peter Currie, will remain unchanged.

"I think it is a logical step forward ... since we are one of the leading sites on-line [and] we intend to grow into a major hub of commerce and services," Mr. Homer said. "Our purpose over the long term will be to fully utilize the power of the Internet for our users."

The shift in the structure of Netscape is part of a large trend affecting the entire Web, which is moving toward a concentrated group of central Internet sites called portals. Officials at Netscape recently decided to expand its Web presence -- to take advantage of heavy traffic generated by the company's popular browser -- by shifting its business-oriented site called Netcenter into a major consumer-oriented Web service.

The strategy to become a broader site -- an aggregator of content, communications and community features that are bolstered by navigational tools -- will bring Netscape into more-direct competition with many major Internet players, including Yahoo Inc., Excite Inc., America Online Inc. and a similar new site that will soon be launched by Microsoft Corp. called Start.

But those same competitors are also potential partners for Netscape -- because Mr. Homer said it is likely the company's Web site will be built up through partnerships with content creators and commerce sites, as well as by possible purchases of companies that offer a wide range of features needed to create a robust offering. Thus, the Mountain View, Calif., company has been in serious discussions in recent weeks with companies like Yahoo and AOL, and also e-mail and search businesses, about the configuration of the new Netscape site.

The draw for those competitors is clear: Many users already flock to the Netscape site by default with more than 68 million Netscape browsers in circulation that are programmed to transport users to the site automatically when they launch the program. That has made Netscape's site one of the major crossroads on the Internet. A recent poll by Atlanta-based RelevantKnowledge Inc. ranked it the second most visited site in cyberspace after Yahoo with 23.1 million unique users in February, the Web equivalent of Times Square.

The problem is that Netscape hasn't been quick in building the stores, entertainment and other features to keep people there, which many industry observers attribute to the company's focus over the past several years on building its software business. It launched its business-oriented Netcenter site only last fall, even as Yahoo and others had built major businesses on the Web.

Mr. Homer agreed that Netscape hasn't focused enough on the power of the site, which now has 3.6 million registered users. But he noted that it has still been growing more strongly than competitors that concentrate solely on the Web business.