US Report: Netscape, Yahoo! to divorce

They married fast ... they married young ... and now, after only three years, it's ending in divorce.
Written by ZDNet UK, Contributor

A top Yahoo! official said the leading Web navigation guide is ending all marketing and traffic-sharing ties to browser pioneer Netscape.

The split ends one of the most storied marriages in the history of the World Wide Web. Netscape played a key role in establishing Yahoo! as a top Web publisher by featuring the search and navigation service on Netscape's home page from early 1995, when both companies were just getting started.

Now Netscape is seeking to develop its home page into a major Web "portal" that will compete with Yahoo! And Yahoo! has decided that it is not satisfied with the traffic it is receiving from Netscape.

Initially, Netscape, the leading browser-maker, was one of the leading sources of search and navigation traffic for Yahoo! Netscape has played a similar role for other search services, which in 1996 joined Yahoo! on Netscape's home page.

But Yahoo! has been working to diversify its sources of traffic, and now receives less than 5 percent from Netscape, according to Jeff Mallet, CEO. A major co-branded area on Netscape's home page - the Netscape Guide by Yahoo! - has delivered less than a third of the expected traffic.

"We - both Netscape and us - haven't been overjoyed with the results," Mallett said about the guide.

Mallett said that Yahoo! and Netscape plan to discontinue the co-branded guide on July 1. The guide had been established a year ago, and originally was supposed to last for another nine months.

The guide also was supposed to be a major source of advertising revenue for Netscape. Yahoo! had paid Netscape $5m (£3m) in 1997 for rights to the Netscape brand name, and shared undisclosed advertising revenues for the guide with the browser company. The contract called for Yahoo! to pay Netscape another $15m (£9m), as a minimum payment against expected traffic.

Meanwhile, Netscape announced on Thursday that Yahoo! will not participate in a new set of search services that will be featured links on Netscape's Web site. Instead, those participating as "Premier Providers" in Netscape's Net Search program - which commences June 1 - are AltaVista, Infoseek, LookSmart and Lycos. These search services will split half of the search traffic that comes into Netscape's Web site during the next year, with no single search service receiving more than 15 percent. Netscape and Excite, in a partnership announced earlier this month, will receive the other half of the traffic.

Mallet said that Yahoo! will remain for a few months as part of Netscape's lower-profile "Distinguished" list of search and navigation services. But that placement is being offered as an alternative to Netscape refunding to Yahoo! excess payments made on the Guide partnership.

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