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May 20, 1997updated 05 Sep 2016 12:59pm


By CBR Staff Writer

With Netscape Communications Corp’s warning last Friday that Microsoft Corp is eating into some of its markets still ringing in its ears, the need for the company to focus on its server offerings is becoming more intense by the week. So yesterday’s announcement that it is handing over control of its Navio browser subsidiary to Oracle Corp makes a lot of sense. Oracle’s Network Computer Inc (NCI) subsidiary is effectively buying Navio for Oracle shares. Executives from both companies were determined to keep the terms a secret, but Oracle will take a hit for purchased in-process research and development in its fiscal first quarter, the one that starts next month of about $30m, and then spread another $30m over the following three quarters. The total charge amounts to about six or seven cents per share, according to Oracle. Navio’s revenues are unknown, but as it’s thought to be at the very early stages of getting any money back from its technology, that Oracle write-off will probably amount to a substantial part of the total amount it paid for Navio. Netscape will have a minority interest in the new NCI. Navio was formed last August to extend Netscape’s Navigator technology to run on consumer and non-PC devices (CI No 2,986), while NCI said it would concentrate specifically on software for the new breed of network computers that Oracle chief Larry Ellison has played a central role in attempting to establish. But after that Navio laid low, and speculation arose that it was losing its way, having aimed at horizontal markets, then vertical, then internet- enabled television, but not expecting Microsoft to step in a gobble up pioneer WebTV Networks Inc last month. But television and consumer devices is what the new NCI will be going after, although Oracle focus for its NCs up until now has been totally on the corporate market, knowing as it does, very little about the consumer space. Navio is planning among other things, a registration servers for internet service providers and a software developer’s kit (SDK). All the Navio employees are going over to NCI next quarter, and the deal contains a licensing element for Netscape to get back some of the browser technology and derivative works, as Larry Ellison put it, should it want them. Netscape still develops browser technology as part of its Communicator product. As to whether the Navio stuff will replace elements of the NC Desktop environment that NCI has produced and licensed out, Ellison said it will be replacing some, augmenting some others. With NCI now going after all sorts of consumer devices, from handhelds, to set-top boxes and games console, Oracle is going once again head-to-head with its bete noire Microsoft, which has already made significant in-roads into the handheld business with its slimmed down Windows CE operating systems, and now obviously has WebTV to play with. Anyone would think Ellison is obsessed with Microsoft the way he’s willing to switch NCI’s focus so dramatically to compete. NCI will also be competing with embedded web software specialists Spyglass Inc and PlanetWeb Inc. Earlier this year NCI said it had no intention of going after the consumer market. Ellison predicted products by Christmas, and said the difference between NCI and Microsoft is standards: Windows, ActiveX and WebTV on one side, and Java and HTML on the other. Wei Yen, CEO of Navio moves over to become president of NCI, while Jerry Baker retains his position as CEO of the Oracle unit. Netscape CEO Jim Barksdale and Ellison join NCI’s board. Navio claims to bring the advantages of branding power to the agreement, and has deals in place with IBM Corp, Nintendo Co Ltd, Sony Corp, Sega Enterprises Ltd NEC Corp, and of course Oracle itself. NCI already has deals set up with Digital Equipment Corp, NEC Corp, Thomson Computer Electronics (holders of the RCA brand name) and Zenith Electronics Corp. The Street liked the deal from Netscape’s point of view and brokers including Salomon brothers marked the stock up to a buy rating, which was good for a small rise in Netscape stock, when most technology stocks were going in the opposite direction; up $0.75 to $30 exactly. The announcement came a year to the day since the introduction of the Network Computer Reference Profile by Oracle, Netscape, IBM, Sun and Apple.

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