Netscape buys 'extranet' developer Actra
In a deal that continues its increasing push into the business market, Netscape Communications Corp. announced Thursday it will gain full ownership of Actra, a joint venture between Netscape and GE Information Services that makes Internet commerce software.
Under the agreement, Actra will become a wholly owned subsidiary of Netscape, and the venture's 200 employees will become Netscape employees. Netscape is planning to sell Actra's products, which include the CommerceXpert line of business-to-business commerce applications, under its own brand name.
The venture had been a 50/50 joint venture between Mountain View, Calif.-based Netscape and GE Information Services, a subsidiary of Rockville, Md.-based General Electric Company.
Actra's software is used to connect businesses to other businesses and customers over the Internet, and Netscape played the deal as an expansion of its previous focus on intranet software.
"This acquisition is a dramatic step in the evolution of Netscape from a browser company into an enterprise solutions company," said Netscape CEO Jim Barksdale in a statement. "With the ... emergence of market demand for open, scalable Internet commerce solutions, the time is right to bring Actra into the Netscape fold."
Netscape said it originally formed Actra as a joint venture last April in an effort to keep itself focused on intranet software for corporations.
The market for so-called "extranets" -- or extensions of corporate intranets to the corporation's clients and business partners -- is wide open, according to analysts.
"The Internet has changed how companies are doing business," said Harry Fenik, VP of Zona Research Inc. "Suddenly you're not just dealing with product and management to your own employees, but to your partners as well. It's made business a team sport as opposed to a one-on-one competition."
He added that although the area has great potential, it is also intensely competitive, and it will be difficult for any one company to dominate.
GE said the deal was not the result of any disagreement between the two companies -- rather, that it preferred to focus on broader issues of network solutions instead of software development. "GE wants to develop complete solutions. ... This deal allows each company to focus on its core competency," said GE's Venkat Mohan.
Netscape said its acquisition of GE's interest in Actra will be accounted for as a purchase transaction, and Netscape will issue about 1.7 million shares to GE for its interest and for related technology, subject to adjustment. At Thursday's closing price of Netscape stock at $33, the deal would be valued at $56 million.