America Online Nov. 24 confirmed it will buy Netscape Communications Corp. in a stock swap valued at $4.2 billion. AOL also announced a strategic alliance with Sun Microsystems to develop end-to-end solutions for electronic commerce. Steve Case, chairman-CEO of AOL, Dulles, Va., said the acquisition of Netscape "brings together two of the leading brands in cyberspace," and the alliance with Sun "will enable us to take e-commerce to a whole new level." Netscape will remain a separate division of AOL and remain based in Mountain View, Calif. AOL will distribute a customized version of Netscape's browser to its 20 million video chat customers, but it will continue to distribute rival Microsoft Corp.'s Internet Explorer in exchange for Microsoft's agreement to bundle AOL software with its Windows operating system. Under the deal with Sun, the Palo Alto, Calif., computer company will distribute Netscape's business-level software in exchange for AOL's $500 million purchase of hardware and software through 2002 to develop e-commerce solutions.
Copyright November 1998, Crain Communications Inc.