America Online is in talks to purchase Netscape Communications in an all-stock transaction that is said to be worth more than $4 billion, according to published reports.
The reports, appearing on U.S. television, radio and online versions of the Wall Street Journal and Newsweek, said that Sun may also be involved in the deal.
The stories quote unnamed sources said to be close to the deal. Although financial terms were not disclosed, the deal, based on the market capitalization of Netscape, would be worth at least $4 billion. But according to the Wall Street Journal, AOL will pay a premium above the market price for the Netscape stock.
The leaked details include AOL taking over Netscape's Web portal, or "Netcenter" as well as Netscape's popular Web browser software. Reportedly, Sun would take over the enterprise side of Netscape's business and pay AOL a fee for using Netscape technology. Netscape currently sells a number of business applications, including those used for messaging, groupware and electronic commerce applications.
Sun, AOL and Netscape have reportedly been in talks all week and this weekend and could reach a deal before the stock markets open in the U.S. on Monday morning.
The deal means that AOL would retain the Netscape brand name and would not involve any staff lay-offs, according to the reports. Netscape's President and CEO James Barksdale has reportedly been offered a seat on AOL's board of directors as part of the deal.
The deal could have far reaching effects on the Department of Justice case against Microsoft, as well as changing the landscape of the "browser wars." Netscape's exit with a bang, may impact the ongoing Justice Department's antitrust suit against Microsoft, which has looked at Microsoft's alleged efforts to drive Netscape out of business.
AOL currently has a deal, that runs through the year 2000, to use Microsoft's Internet Explorer as the default browser on its consumer service.
Sources familiar with the deal reported that AOL would now be in a position to get a huge amount of e-commerce on the Web. In addition to its own $14 million subscribers, Netscape's Netcenter gets about $20 million visitors per month.
Analysts see AOL, strengthened by Netscape's technology and users, as a potential threat to Microsoft's growing e-commerce ventures.
The deal may need approval from government regulators.
None of the companies involved could be reached for comment, nor had any of them issued a statement at the time of publication.
This would be the second time that AOL has purchased a browser company - the first was BookLink Technologies, whose technology disappeared.
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