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AOL Closes Deals With Netscape/Sun
[1: 49AM] AOL announced yesterday that it had closed a deal to purchase Netscape in a stock swap valued at US$4.2 billion. Under the deal, which will need to clear regulatory hurdles and shareholder approval, each shareholder would receive .45 shares of AOL stock for each share of Netscape stock they own.

As we reported on Monday, AOL will focus on the Netcenter business as well as ongoing development of the Navigator/Comunnicator web browser product line. With over 14 million AOL users and 9 million registered Netcenter users, AOL will represent an enormous chunk of the online market.

Sun Microsystems is also involved in the deal as they will work with AOL to jointly develop and distribute software. In what could end up being the biggest prize for Sun, AOL and Sun will work together to build some of these online commerce tools with Java, Sun's version of Java. The latest version of Sun's Java Development Kit will also be integrated into NAvigator/Communicator.

AOL has also committed to buying US$500 million is Sun hardware and software through the year 2002 while Sun will be paying some US$350 million in licensing fees to AOL for the right to distribute some of Netscape's business server solutions and other NEtscape software.

The Mac Observer Spin: Microsoft immediately called on Judge Thomas Jackson to dismiss the DOJ antitrust suit against the Redmond based company. Microsoft's assertion is that the merger between AOL and Netscape is proof positive that competition was alive and well.

Yeah, right.