US Report: Mixed verdict on Netscape's media moves
Published: 10 Jul 1998 10:28 BST
That was the consensus opinion among analysts in the aftermath of a clutch of marketing partnerships announced Thursday by Netscape with several big media companies.
In recent days, the company's shares soared after Mike Homer, Netscape's executive vice president, said the company was exploring partnerships with Disney, ABC, Fox, CBS and General Electric's NBC to get content for its redesigned Web site, Netcenter.
Investors were keeping their fingers crossed, hoping for a mega-announcement. After all, in recent weeks, NBC bought a 19 percent hunk of Snap! Online, a CNet Internet hub that competes with Netscape's Netcenter; and Disney took a 43 percent stake in Infoseek, another Netcenter competitor.
In the deal announced Thursday, Netscape said it was teaming up with Warner Bros. Online, Paramount Digital, Sony and Hollywood Online to bring more viewers to its Web portal site.
It may not have been a blockbuster, but observers nonetheless said the $10m (£6.1m) deal to promote Netcenter with sweepstakes and Web ads was a good start.
"Netscape in the past has suffered from a slowness in programming to the consumer space; they've focused, in the past, on the business space," said analyst Chris Charron of Forrester Research "They have taken great steps to improve that over the last 60 to 90 days.
"This is a definite step in the right direction, but it should be just a piece of the puzzle," he added.
In the last year and a half, critics have dunned Netscape for sending out mixed messages by shifting from one business model to another. The strategy of creating a Web gateway (called a "portal" in industry terminology) that would appeal to consumers is only the latest twist.
Netcenter -- which debuted under its new design just a week ago -- accounts for about a quarter of Netscape's profits.
But some analysts voiced concern about Netcenter's prospects as Microsoft continues to ratchet up the pressure. In a report issued earlier in the week by AdKnowledge, the research company disclosed that Microsoft's Internet Explorer now accounts for nearly half the Internet browser market.
Under Homer, Netscape is feverishly working to build a Netcenter brand, in hopes of reproducing the amazing success enjoyed by other Web portal sites such as Yahoo! and Lycos.
Clearly, the company is working to make up for lost time. But Netscape's zigzags may work against it, according to Ron Rappaport, an analyst with Zona Research.
"Netscape will long be a lesson in PR and brand marketing," said Rappaport. "The only tie between Netcenter and the other parts of the company could be that big 'N' with the comets flying around it ...
"[Netscape] can take something everyone is familiar with and slap it onto something new. And people will just say, 'Oh, now Netscape is going to try this.' "
"The fact is, a lot of people have a soft spot for Netscape anyway," added analyst Stefan Smith, a Dataquest analyst.
The next big development to watch for is a pact along the lines of Disney-Infoseek or NBC-Snap!, experts say.
For one thing, those deals will mean a lot more marketing dollars for the portals. NBC and Disney's ABC will spare no expense putting their Internet partners in front of millions of television-watchers, and competitors such as Lycos, Excite and Netscape will have to find a way to keep up.
One potential media partner for Netscape is Time Warner, which is providing some of the online advertising in Netscape's current promotional, as well as a good deal of Netcenter's content.
Are more deals with Time Warner in the cards? "Yes, period," said Netcenter's Lynn Carpenter.
Despite Netscape's past in technology- and business-centric markets, it wouldn't make a bad partner for a media company that wanted to sink its claws into the portal game.
"The two images [of a media company and a technology company] are compatible in this world today," said analyst Smith. "Some people doubted Disney had the capability to meld Starwave [a Web developer] into its culture, but I think it's now established that that can happen. And Netscape is a young, nimble company."
Did you find this article useful?
41 out of 82 people found this useful
Digg
Slashdot
Del.ici.ous
Stumble
Reddit
