Netscape allays acquisition rumors

The chief executive officer of Netscape Communications Corp. last week dismissed rumors whirling on Wall Street that the company soon may be acquired by a larger technology company.

"We're not out looking for anything," said Jim Barksdale, Netscape's president and CEO, in an interview with Federal Computer Week. "We're alive and well. We're building a great business."

Barksdale, however, said the company has been the target of takeover rumors since its birth about three years ago. During a visit to Washington, D.C., last week, he emphasized the company's commitment to its government market business, which makes about 5 percent of Netscape's total revenue and has grown 280 percent a year.

"We're an independent company," Barksdale said. "I like being an independent company. There is nothing that I would do that would disadvantage the federal government. We want to build a great Internet-solutions company, and that is to the advantage of the government."

In fact, Netscape plans to expand its channel partners in the federal market, according to Peter Thorp, director of federal services. The company has a number of partners now, he said, including BTG Inc., which recently sold its reseller business to Government Technology Services Inc., Microsoft Corp.'s primary government reseller.

While Netscape plans to keep its current arrangement with BTG until April 1, the company will then select additional partners from a proposal it has released to the channel community. Companies that have responded to that solicitation include BTG, GTSI, Sylvest Management Systems Corp. and Intellisys Technology Corp.

"We're going to re-evaluate our options," Thorp said. "We're looking for people with contracts, schedules, ease of use — a local person."

For Netscape, not only has the federal government market been the company's largest customer, mainly because of its highly heterogeneous operating environment, but meeting the scalability and security needs of the government often has driven Netscape product development, Barksdale said. "The scalability of these products [messaging and directory servers] is not only pushed by the federal government but is a child of the Internet itself," he said.

For example, Netscape created a Fortezza-enabled browser specifically to support the Defense Department's needs, and the company also boasts the only software now available that has been certified by the National Institute of Standards and Technology as meeting a government mandate for agency purchases of data encryption, user authentication and digital signature technology.

While DOD often has been an outspoken early adopter of products certified as meeting the NIST standard, called FIPS 140-1, Barksdale called for a push from the Clinton administration to enforce that standard so only compliant products are purchased.

"The government has not been as forceful as it should be in enforcing this standard," Barksdale said.

Netscape also has been taking care to manage its government customer relations as the company's strategies have changed. When Netscape announced earlier this year that it would make its Netscape Communicator and Navigator browsers available free of charge, Thorp said the move did not ruffle the feathers of DOD, which late last year purchased 2 million licenses for Netscape client and server software. The browser component of that licensing arrangement was a small portion of the deal, he said.

The company briefed several high-level DOD officials before the announcement was made to offer the software free of charge. The officials were pleased with the decision, Thorp said.

Barksdale said offering publicly the source code for the client software— except for the code for security mechanisms— will allow federal agency developers to augment and customize Communicator and Navigator applications to fit their environments.


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