Netscape says free browser strategy working well

While speculation increases about the company's future, Netscape Communications Corp. officials claimed Thursday that their latest effort to widen the market for the Navigator Web browser is starting to pay off.

The company's two-week-old "Unlimited Distribution" initiative, aimed at solidifying Navigator's increasingly tenuous leading market share, has resulted in commitments from more than 3,000 original equipment manufacturers, Internet service providers, software developers, and Web content providers to distribute 36 million copies of the browser this year, Netscape (NSCP) officials said.

The program was launched as the company confirmed speculation that it would give away both its browser and source code for free. This move was in response to Microsoft Corp.'s gains in the browser market with its free product, Internet Explorer.

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Microsoft's increasing foothold in the market, which has also attracted the interest of U.S. government antitrust enforcers, has cast doubt on Netscape's future prospects.

Market researcher Dataquest Inc. said last month that Microsoft controls 39.4 percent of the browser market and Netscape holds 57.6 percent. Over the course of last year, Netscape saw its dominant market share erode as Microsoft inked deals with OEMs and online services.

Speculation that Netscape is about to be taken over by any of a number of suitors, from Sun Microsystems Inc. to Oracle Corp. to IBM Corp., sent the company's stock soaring as much as 13 percent in midday trading Wednesday to $20.25. On Thursday, the stock gained another 14 percent, closing at $21.94 in late afternoon trading.

Netscape officials are hoping to leverage the unease created by the federal and state antitrust investigations into Microsoft to gain new partners, one executive suggested.

"By making it easy for thousands of partners to freely distribute our software, we are well on our way to adding millions of new users," said Mike Homer, executive vice president of worldwide sales for Netscape, in a statement. "In addition, with the Department of Justice's enforcement of the antitrust laws, OEMs will have more opportunity to make [Navigator] readily available to customers."

What was unclear from Netscape's announcement was how many of the OEMs and ISPs named may have already been distributing Navigator, and whether the agreements were exclusive or if they allowed the partners to distribute the Microsoft browser as well. Also, it was unclear how much money the company might have made from the deal if it was still charging up to $79 for the various versions of the program.

Company officials didn't immediately return phone calls seeking comment.

Among the partners announced on Thursday are Autodesk Inc., Canada Internet Direct Inc., InfinityOne Media, Stream Technology Group, and Ziff-Davis Inc., publisher of ZDNN.