AOL buys Netscape for $4bn

After four days of secret talks, Netscape finally confirmed late on Tuesday that it will be bought by America Online in a deal worth $4.2bn. Under the terms of the agreement, Sun Microsystems will take control of the software for a period of 3 years.

But in a straw poll conducted by Silicon.com, the response from the user and developer community has varied widely.

The majority of users welcomed the deal, saying service and support as well as technology development can only be improved with Sun's help. One said: "I've had a really bad deal when it comes to service from Netscape so I'm glad that Sun - which is more experienced with user support - is on board."

But in sharp contrast, the developer community was all doom and gloom on Web site chat forums today. The only result, they think, is more polarisation of the IT industry and "two Microsofts running the show". One developer said, "it's a shame to lose Netscape's pioneering spirit."

America Online will now acquire control of Netscape's high-profile Internet portal, Netcenter, but will relinquish the software business under a 3-year licensing deal to Sun Microsystems. Sun will resell Netscape's server and client software alongside its own portfolio of technology, while AOL will back Java in its products.

Spokesmen for the three companies all gathered for a US conference call late Tuesday to explain the deal. Jim Barksdale, CEO of Netscape, said: "We're all jazzed about the partnership - we think this common union will make it much simpler for users to join the Net economy."

Meanwhile AOL will now take on one of the largest pieces of the Internet branding jigsaw when it assumes control of Netcenter. Many analysts have praised the move following the company's rift with Microsoft.

Independent analyst, Tony Clifford Winters, said: "AOL have already spoken out against Microsoft in the anti-trust case, now they have got that off their chest, they can stand up to Microsoft."