Netscape meets expectations and underwhelms Wall Street

Netscape Communications, the darling of Wall Street of late, surprisedinvestors by coming in on target for the fourth quarter. Typically, Netscape has exceeded earnings estimates dramatically. The Mountain View,California, company reported sales of $115 million for the quarter, up fromthe $41.6 million they reported in the same quarter a year ago. NetscapeCFO Peter Currie also cautioned that future growth will not be as fast.Netscape's stock has taken a big hit in recent weeks, dropping $20 between the beginning of January and today, when the stock closed at $38. Analystsfear that increased competition from Microsoft in the browser market andLotus notes in the groupware/intranet market will stymie Netscape's growth. Currently, over 50% of Netscape's revenues are from Web browser sales. Server sales are strong, however: Netscape announced today that they have sold over 1 million copies of SuiteSpot. Also, Netscape CEO Jim Barksdaleannounced tonight that the company would rely on E-mail and groupware, notWeb browser sales, for a successful 1997. Clearly, the company is at a turning point in its brief life. Using a dumping campaign to establish browser marketshare, the company now accusesMicrosoft of the same deed. Sensing the inroads Microsoft was making intoits cash cow, Netscape decided last year to focus on intranets andgroupware instead of browsers with the Communicator 4.0 suite. What willthe future hold? Stay tuned