Netscape Wins Net Gain With HP

Like a film that fantasizes what would happen if the other side won the war, AOL's Netscape browser won a huge distribution deal with HP (NYSE: HPQ) this week, putting the challenger to Microsoft's (Nasdaq: MSFT) Internet Explorer on the PC giant's North American notebook and desktop computers beginning next year.

The deal is not fiction, though, as Netscape has emerged renewed from the browser wars, riding a wave of security, stability and stigma-based defection from Internet Explorer, which is still dominant, but has seen its share of the browser market decline in recent years with the rise of Netscape, Mozilla, Opera and other alternatives.

The Netscape-HP deal will fold the browser into HP's standard software installation, and marks the most significant win for any browser since the browser wars ended years ago.

"It's welcome back in, the water's fine," Webroot Vice President Richard Stiennon told TechNewsWorld, adding that the browser bundling deal with HP gives Netscape a clear advantage over other alternative browsers going forward.

Battle Resumes

Although Microsoft won more than 90 percent share of the browser markets in the aftermath of the browser wars of the mid-90s -- primarily fought against AOL, which sued the Redmond, Wash. company, and its formerly dominant Netscape browser -- the fight for the browser market is on again. This time, Explorer faces competition from increasingly capable competition, including Mozilla's Firefox, which also forms much of the technical basis of Netscape.

HP and Netscape did not disclose details of the deal, but indicated that American and Canadian purchasers of HP computers will have a choice between Netscape or Explorer beginning early next year.

"By including Netscape 8.0 on our PCs, HP is providing people a more secure computing experience via the browser's cutting-edge security features and other functionality that make being online safer for our customers," read a statement from HP's director of the worldwide consumer PC group, Nick Labosky.

Browser Bite Back?

The companies touted Netscape 8.0 and its automatic safety and security adjustment, privacy enhancements, tabbed browsing, toolbars and integrated RSS feeds.

Gartner (NYSE: IT) research Vice President Martin Reynolds told TechNewsWorld that, while the security migration away from Explorer has slowed, the deal is a significant win for Netscape and will put the browser in front of more users.

However, Reynolds viewed the deal as potentially dangerous for HP, suggesting that the effort to differentiate may also alienate consumers accustomed to Explorer.

"It's an interesting move, one that I think ultimately will cost HP more than it makes them," he said.

However, Reynolds also indicated that "money may be changing hands in both directions" under terms of the deal. As a driver to AOL services, the HP-Netscape combination could earn both companies significant profits, the analyst said.

Great Differentiator

Reynolds noted that the Netscape deal reflects the fact that browsers are becoming less differentiated. However, the distribution deal is unlikely to impact other alternative browsers in the market, he said.

"We've passed a point where most people don't care," he said.

Webroot's Stiennon pointed out that the browsers compete on features, but depend on bundling with PC makers for wider growth. Stiennon wondered why Mozilla did not win the deal, adding that Netscape will reap notable benefits if the browser can keep up with Firefox.

"They should've gotten this," he said of Mozilla. "As long as Netscape does a good job of incorporating Firefox features and capabilities, it's a really good thing."

Stiennon also said the deal represented "a great differentiator" for HP, which should also see a reduction in calls to help desks because of reduced spyware infections and better PC performance.