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Critics say Novell's acquisitions of WordPerfect Corp. and Borland International's Quattro Pro amount to overpaying for damaged goods. But Novell is betting it can lead the brands in a new direction.

Novell, the dominant force in networking software products, last week agreed to buy WordPerfect, best known for word processing software, for stock valued at $1.4 billion and Quattro Pro, the No. 3 personal computer spreadsheet, for $145 million.

Wall Street felt Novell overpaid and sent the stock skidding more than 20%. Lotus Development Corp., a leading spreadsheet marketer, apparently concurred. Lotus reportedly dropped out of the WordPerfect bidding war when Novell's offer shot skyward.

If the merger happens, Novell's revenues will grow to about $2 billion, making it a clear-if distant-No. 2 in the software market to $4 billion Microsoft Corp.

Novell dominates the market for software tying together computers through networks, though Microsoft is a growing threat there.

But WordPerfect has slumped to No. 2 in word processing behind Microsoft, and Quattro Pro is an also-ran whose heavily discounted price, as low as $39, still isn't enough to attract great interest.

WordPerfect and Quattro Pro are "products on the skids," said Jeff Silverstein, editor of Software Industry Bulletin. "Microsoft is really far ahead of the pack."

Novell's strong ties to Fortune 500 companies and WordPerfect's package-goods expertise and ties with smaller businesses and individuals open significant cross-marketing possibilities, analysts say.

Terri Holbrooke, Novell VP-global communications, said "the basic premise for the merger" is creating "networked applications," combining WordPerfect products with Novell's networking so computer users in different locations can work together more easily.

Novell and WordPerfect haven't discussed whether they will consolidate ad agencies, Ms. Holbrooke said.

Said Glen Mella, WordPerfect VP-marketing communications: "It's certainly within the realm of possibility" that the agency list will be pared back, though "I do not necessarily envision one single agency of record."

At this point, Mr. Mella said he intends to continue relationships with multiple agencies.

Foote, Cone & Belding, San Francisco, handles Novell's estimated $6 million account.

WordPerfect's $28 million account is split primarily among Dahlin Smith White, Salt Lake City; Merkley Newman Harty, New York; Hales Allen, Provo, Utah; and Levy & Wurz, Seattle, with media managed in-house.

Borland handles advertising in-house, though Dahlin has done ads for the Borland Office software package.

Dahlin also once handled Novell.

Ms. Holbrooke said advertising is central to WordPerfect because of its broad target. But Novell places far more emphasis on other communications, such as trade shows and collateral for its powerful network of resellers, than on ads.

"We are absolutely not an advertising-driven company," she said.

Critics fault Novell for failing to convey a clear corporate vision, and they say Novell could learn from WordPerfect's more aggressive communications strategy. But some aren't convinced Novell will change.

"Novell not spending on marketing communications ... is one of their legendary faults," said David Coursey, editor of P.C. Letter.

Tim Clark contributed to this story.

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