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September 17, 1998

NETSCAPE & QWEST INK MARKETING & TECHNOLOGY PACT

By CBR Staff Writer

Netscape Communications Corp and aggressive telecoms start-up Qwest Communications International Inc yesterday announced a three-year marketing and technology agreement to add a variety of communications services to Netscape’s Netcenter portal site and promote Qwest’s services to Netcenter users, for which Qwest is paying Netscape $25m over the period of the contract. In return Netscape is giving Qwest software to build a unified messaging service and is also paying Qwest for it to become its largest single provider of bandwidth, quadrupling its capacity on the west coast, connecting to the net via Qwest’s Macro Capacity Fiber Network, which is due to be completed by mid-1999. Qwest has also signed to become a reseller of Netscape’s software and there will be a Netscape-branded ISP service called Netscape Netcenter Online by Qwest. Netscape, which according to chief executive Jim Barksdale has evolved from a browser company to a portal and enterprise software company says the move is all part of its Project Turbo initiative to add more services to Netcenter. The deal looks similar to that signed by America Online Inc with long distance company Tel-Save Holdings Inc in March last year but the technology element goes further than that deal. The two are also creating a messaging service that will eventually combine email, voice, fax and data from a single point on the Netcenter site. Netscape Contact is the name of the inbox that will handle all these communications, and, not surprisingly, Netscape will also integrate Contact directly into the next version of Communicator, 5.0. Central to the idea of Contact is the new address book, which will launch in two weeks. It will store contact information on the Netcenter site and synchronize with the address book within Communicator, and expanded version of the current tool. Tom Tsao, senior project manager for Netscape Contact emphasized that this is not computer telephony and no special equipment is needed. The call is initiated from the web and conference calls can be controlled from the web; participants identities are shown, they can be muted and so on. Roughly once a month for the next six months, Netscape will unveil the various messaging services such as fax, paging, conference calling. Of course for all these services, users will have to sign up to Qwest, which hopes to get up to $150m in revenues from the arrangement for each of the three years of the deal. Netcenter and Qwest subscribers will also be provided with a special calling card and will include a code to access their accounts through Netcenter and sign up for other plans. One question perhaps best reflected the differences in corporate culture between the two companies. When asked if the companies will get access to each other’s customer database, Qwest chief executive Joseph Nacchio chimed for marketing purposes? Absolutely! Netscape’s Mike Homer was more reserved, emphasizing that the company has a very conservative privacy policy, and that no customer information will be released without their express permission. Netscape closed down $0.9375 at $22.375 and Qwest down $0.4375 at $32.50 on a bad day for technology stocks all round.

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