Microsoft Internet Browser Technology Not a Significant Factor in Netscape Deal

Strategic Insights -

Netscape Communications executive vice-president Peter Currie revealed yesterday that even during negotiations over America Online's (AOL) takeover of his company, AOL's commitment to use Microsoft internet browser technology was not a significant factor. According to Currie, AOL emphasized the importance of access to Microsoft technology early in the talks, but it was not a major area of concern thereafter. The revelation comes as Microsoft is gathering evidence in a strategic alliance between AOL, Netscape, and Sun Microsystems, amid its landmark antitrust trial.

Key Takeaways:

  • The AOL-Netscape deal was valued at $4.2bn initially, but was ultimately completed for $8.98bn last month.
  • AOL is contractually obliged to distribute Microsoft's browser until 2001, after choosing not to opt out earlier this year.
  • The Justice Department's arguments in the Microsoft antitrust trial have focused on AOL's decision in March 1996 to distribute Microsoft's browser instead of Netscape's.
  • Microsoft is accused of abusing its dominance of the Windows operating system unfairly to promote its internet technology.
  • Peter Currie, a key figure in the Netscape-AOL deal, indicated that AOL's importance on access to Microsoft technology decreased over time.
  • The deposition by Peter Currie, originally private, was forced into the open by media attention.

Statistics:

  • The AOL-Netscape deal was initially valued at $4.2bn and ultimately completed for $8.98bn.
  • AOL is contractually obliged to distribute Microsoft's browser until 2001.
  • The Justice Department's arguments in the Microsoft antitrust trial have centered on AOL's decision in March 1996 to distribute Microsoft's browser instead of Netscape's.
  • Microsoft's antitrust trial is a landmark case.

Sources:

  • Financial Times Limited, 1999.