OK. I discussed the antitrust trial once before in this column, and cautioned against merely demonizing Microsoft. Instead, I suggested focusing on the larger issue of what's best for the industry as a whole. Still, many critics of Microsoft's business practices continue to depict the Redmond-based company as a marauding monster, one that should be destroyed any way we can.
If that's the case, then how are we to interpret America Online's proposed purchase of Netscape (with Sun Microsystems seemingly along for the ride)?
I like to think of it this way: There are two types of monster movies. One, the "Frankenstein" model, has the monster menacing innocent people, until it is eventually chased into a tower by an angry mob and set alight — destroying tower, laboratory, and monster all at once.
The other is the "Godzilla" model: the threat of one creature is thwarted by the introduction of another. The beasts do battle; the nastier of the two is done in, and there's much rejoicing all around. Roll credits.
The problem with this scenario is that everyone seems to forget it still leaves at least one monster roaming the countryside.
So which plot line are we living out now? One might be tempted to think AOL is coming to Netscape's rescue, to help it compete against unfair Microsoft practices. In truth Netscape, the supposed white knight of the Microsoft antitrust trial, gains far less from this latest development than does the online giant that will soon control its assets.
While Microsoft ultimately failed to crush the Mountain View-based underdog, AOL has succeeded in taming Netscape's spirit using a subtler tactic: If you can't beat 'em, get 'em to join you. In so doing, AOL gains two more cards in a game played with an ever-smaller deck.
AOL is full of assurances. They tell us the Netscape browser will continue to exist — even the now ironically named Open Source development branch, "Mozilla". At the same time, AOL users will continue to be offered Internet Explorer as the default browser; not even Microsoft loses out. Customer fees for AOL's online service will not increase.
Netscape and its Netcenter portal site will be maintained as brands independent of America Online. Development of Netscape's enterprise server software will be placed in the capable hands of Sun Microsystems. From the consumer's perspective, nothing much will change, and all's well — or so AOL claims.
Do you buy it? If AOL has its way, buying may soon be your only option.
It seems unlikely AOL will just maintain the status quo, rather than take advantage of the benefits it gains from the Netscape purchase. One of these benefits is the Netscape browser itself, and the Netcenter Web site with which it has enjoyed increasingly close integration.
By adding Netcenter's 16-million users to AOL's existing 14-million subscribers, Web traffic analysts estimate as much as 70 percent of the online audience will now access AOL properties. Meanwhile, by continuing to offer Microsoft's Internet Explorer as the default browser for their online service, AOL secures its place on the Windows desktop, giving it easy access to an even wider potential audience.
Such numbers give AOL an enviable advantage over other portal sites, even if it maintains Netscape Communicator as an independent, open standards-based product. But don't be too quick to assume it will. America Online CEO Steve Case has said he believes "the next generation of portals is going to involve tight integration with the client." It's not hard to imagine what he has in mind.
Businesses want two things from the Web: an audience to buy their products, and a means with which to sell them. AOL can certainly provide the customers now. But beside audience share, with the acquisition of Netscape it also gains a world-class suite of Internet server software.
By integrating this software with unique features it develops for the Communicator browser, AOL can create what's so far been missing — an advanced client-server system for handling online monetary transactions. Armed with such a superior e-commerce solution, AOL could then not only maintain its 'Net surfer audience, but also foster a growing interest from corporate clients looking to do business online.
Let's recap. To the consumer, AOL can now offer not only physical access to the network, but also the client software needed to take advantage of features like e-commerce, as well as the network content itself. And to industry, AOL can offer the largest audience of any online service, as well as their own suite of server software for tight integration of e-commerce and other features, plus the bandwidth to deliver business clients' content to the consumer.
This combination will likely make America Online highly valued network real estate for companies looking to do business online. Exclusive contracts, in exchange for favored "partner" status, can't be far behind. If industry previously had balked at the idea of offering their content exclusively to an America Online audience, the trade-off is bound to seem far less significant given its new audience figures.
Want to access your bank's website? Or that of your car's manufacturer? You may soon find yourself with no choice but to talk to AOL.
The company's next move may very well be to take its audience and transition it back to the proprietary, subscriber-based model on which AOL's service was founded. The pay-to-play model failed for services like Prodigy, Microsoft's MSN, and CompuServe (the latter acquired by AOL in 1997).
Still, none of these enjoyed the attractive positioning to industry now in America Online's grasp. And none had client software that enjoyed the widespread acceptance of the Netscape browser.
Lest you think a move toward proprietary content is unlikely, consider the "AOL devices" recently announced to be in the works. Powered by Sun Microsystems' Java platform, these set-top boxes and small systems sound a lot like the "network computers" previously envisioned by Sun, alongside such companies as Oracle — but notice the distinction in terminology.
Surely a "network computer" operates on a larger, open standards-based Internet, of which America Online is only a part? Why, then, the need for an "AOL device"? The service provider may be planning a more proprietary 'Net than we can even guess.
Studies show network connectivity has already eclipsed processor speed as the No. 1 determining factor in new computer purchases. Consumers want online content. But against a 'Net mammoth that controls e-commerce and content distribution for 70 percent of online users, smaller providers and portals will be unable to compete. Voila! Within AOL's reach is a dominance Microsoft has only dreamed of achieving.
To some of you, a new company capable of this might still seem like a good thing. Some of you might be pleased to see a worthy competitor to Microsoft emerge in the marketplace. But remember, right now we've got Microsoft where we wanted them. The monster's in court, on trial for violation of Federal antitrust law. Analysts don't see anything similar in the cards for AOL, so far. But consider this: What if Microsoft loses?
If you're comfortable with the network landscape created by the sale of Netscape to America Online, then I hope you sleep easier now. But my advice to you is this: If yesterday Microsoft gave you the willies, best look under your bed before you turn out the light tonight. I'd hate to have to say, "I told you so."
