Netscape, AOL sites greet Mac users

Summary:Mac users discover a new default home page powered by AOL Time Warner's Netscape subsidiary -- a move that highlights the ongoing battle between AOL and Microsoft for online allies.

Mac users discovered a new default home page Tuesday powered by AOL Time Warner's Netscape Communications subsidiary--a seemingly minor switch that nevertheless highlights some of the most fractious alliances in the technology industry.

The Apple Start Page, separate from Apple Computer's main corporate site, delivers customized news and other information specific to Mac users.

Excite.com previously provided the default page, but the site has offered a fairly limited array of content since it was sold as part of parent Excite@Home's bankruptcy earlier this month.

Under the new deal, Mac buyers will automatically be sent to a Netscape site hosting content from CNN, Entertainment Weekly, Sports Illustrated and other AOL Time Warner properties.

Mac users opening Microsoft's Internet Explorer using the default home page Tuesday were greeted with, "Welcome to your new Start Page! Netscape and Apple are working together to bring you the best online content every day."

"It's kind of a slip into the AOL Time Warner space and is certainly an indication (AOL is) going to continue to fund the Netscape properties," said Giga Information Group analyst Rob Enderle. "The Netscape property could be a stalking horse for AOL Time Warner...connected back to AOL Time Warner properties."

People can change the default setting manually. Still, the change could give AOL Time Warner a leg up in its effort to stage a comeback for the storied Netscape brand. Analysts said the deal could also signal a strategic shift in the winds for Apple, as it looks to reduce its reliance on Microsoft by turning to AOL Time Warner for content and online software.

Netscape parent AOL Time Warner and Apple each have a love-hate relationship with Microsoft, which has inked deals to make its IE the default Web browser for America Online and the Mac. But AOL and Apple have been tightening ties recently as Microsoft draws closer to resolving its legal problems and aggressively pushes a powerful new version of its operating system, Windows XP.

AOL and Microsoft jockeyed early this year over extending their IE deal. The pushing match did little to change the status quo, although AOL is now working on a new browser, code-named Komodo, that could conceivably be used to supplant IE in future versions of the online service. A beta of the new browser is being tested in AOL's CompuServe Internet service.

Meanwhile, Apple has stepped up as a major opponent of the company's recent class-action settlement, which threatens to displace Mac technology in schools with Microsoft software and services. In addition, Apple's five-year deal with Microsoft for a Mac version of IE runs out next year.

Erik Ryan, product manager for Microsoft's Macintosh Business Unit (MacBU), said Tuesday that there are no plans to change the agreement when it expires. "The MacBU is not changing its commitment to the Mac platform," he said.

Apple also downplayed the importance of the switch Tuesday.

People "can pick their (Internet service provider), start page, browser or their instant messenger from a wide variety of providers," Apple said in a statement. "Apple has changed its default start page to a great provider. The browser shipping with all Macs remains Internet Explorer."

OS seeking software
Apple has good reasons to keep Microsoft in its camp as a powerful software development partner. That relationship has become critical since Apple released the next generation Mac OS in March. The upgrade is its most significant in about 17 years. But new software, which must be ported or rewritten to take advantage of Mac OS X's robust new features, has been slow in coming.

In recent weeks, AOL Time Warner has emerged as an important Apple supporter, churning out new versions of its browser, instant messenger and online access software for Mac OS X.

At the same time, tension has increased between Apple and Microsoft over a controversial settlement of 100 private antitrust cases. If approved by a federal judge, Microsoft would give about $1 billion in cash, software, training and services to needy schools over five years. The software giant also would give away Windows licenses for refurbished computers donated to the schools.

The sharply criticized proposal was undergoing review Tuesday as feuding plaintiff lawyers--the leaders favoring the deal and a group from California looking to litigate--met with Microsoft for mediation. Some educators, trade groups and Apple have called the deal anticompetitive, because it would put in free PCs and software that could displace Macs.

"Microsoft's proposed settlement compels schools to adopt Microsoft technology. Most educators, along with Apple, think this is simply wrong," Apple CEO Steve Job said in a statement. "Any settlement must guarantee that schools have the freedom to choose, and this requires that Microsoft pay their penalty in cash, not donated Microsoft software which will cost them only pennies on the dollar. A $1 billion cash penalty represents less than 3 percent of Microsoft's $36 billion cash hoard."

Gartner analyst David Smith said the spat over the settlement can't be good for the companies.

"You can certainly conclude, given the events of the last few weeks with the proposed settlement, there is a problem relationship," he said. On the other hand, Smith didn't see the settlement scuffle as necessarily disastrous for the two companies, which formed their strategic, five-year relationship in August 1997.

Smith also emphasized that Apple's strategic relationship with AOL Time Warner doesn't necessarily create problems with Microsoft.

"I think you certainly can have a relationship with AOL Time Warner without being Microsoft's enemy," he said. "It's a big world out there, and there are all kinds of strategic relationships."

Apple spokesman Bill Evans agreed, emphasizing the company typically uses multiple partners to deliver services to customers.

"Two main goals that Apple has is to deliver a great customer experience and an open-approach to technology and services," he said. "That's reflected in our use of standards. We work with Microsoft, EarthLink, Netscape and many more companies."

In fact, Microsoft's relationship with Apple would appear to be stronger than ever, with Apple touting Office v. X for Mac OS X as the poster child application for the new operating system.

On the other hand, the Netscape-powered home page deal comes about a month after Microsoft started selling Office v. X, putting Apple on the right side of this important product release.

"It's always possible" Apple could dump Internet Explorer for Netscape, Giga's Enderle said. But "even AOL is using Internet Explorer as their generic standard, though they've been making statements about maybe changing that to Netscape.

"I'm not expecting them to abandon, at least in the short term, the IE browser--and they do like the Microsoft Office folks a lot. I think this is just a swap out of the vendor that is in pain now for the one that has some money."

Topics: Apple, Browser, Hardware, Legal, Microsoft, Operating Systems

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