MOUNTAIN VIEW, Calif. (November 6, 1997) -- Netscape Communications Corporation (NASDAQ: NSCP) and GE Information Services (GE) today announced that they have signed a definitive agreement for Netscape to acquire full ownership of Actra, a Netscape/GE joint venture focused on the delivery of enterprise software applications for Internet commerce. The transaction is subject to required governmental approvals. The companies also announced that they have reached a definitive worldwide distribution agreement under which GE will continue to resell the Netscape CommerceXpert line of Internet business-to-business commerce applications along with the full line of Netscape Communicator client and SuiteSpot server software through GE's direct and indirect sales channels.
Netscape and GE Information Services founded Actra in April 1996 to focus on the design and delivery of next-generation Internet commerce applications. Actra delivered on this charter with the availability last month of the five new products in the CommerceXpert line. Formation of the Actra venture enabled the development of the CommerceXpert line of products for Extranets in tandem with Netscape's development of Netscape Communicator and SuiteSpot for enterprise customers. The CommerceXpert products also provide the technology elements critical for GE's Enterprise Commerce services that assist global companies in implementing Extranets and other electronic commerce solutions.
"This acquisition is a dramatic step in the evolution of Netscape from a browser company into an enterprise solutions company. Already last quarter, 82 percent of our business came from sales of enterprise solutions and services to customers, with only 18 percent of revenue coming from standalone client software sales," said Jim Barksdale, president and chief executive officer at Netscape. "Recent CommerceXpert customer wins such as Bell Canada, Hitachi and Kinko's demonstrate that the business-to-business commerce market has arrived. With this announcement, Netscape is moving further into the enterprise applications business where Microsoft does not compete."
"GE is extremely pleased with the strong early return we received on our Actra investment. The CommerceXpert product line is an integral element of our strategy to expand the e-commerce user base to include small- and medium-sized companies," said Harvey F. Seegers, president and chief executive officer of GE Information Services. "This agreement is a win-win because it enables GE Information Services to focus on delivering integrated product and service solutions while Netscape focuses on product development. Our customers are demanding solutions that combine proven e-commerce technology with GE's systems integration and global trading community management expertise."
Netscape's acquisition of GE's membership interest in Actra will be accounted for as a purchase transaction. Netscape will issue approximately 1.7 million shares to GE for its interest and for related technology, subject to adjustment. In addition, Netscape anticipates that a substantial portion of the purchase price will be written off as in-process research and development in the quarter that this acquisition closes. Upon completion of the agreement, Actra will be folded into a new division at Netscape. This new Applications Product Division will be headed by Vice President Steve Savignano, formerly vice president of engineering and product marketing at Actra. Netscape plans to issue up to approximately 600,000 Netscape shares and options to Actra employees.
Netscape's acquisition of Actra signals the next phase in Netscape's corporate strategy of linking people and businesses together through the Internet, Intranets and Extranets. Building on its success selling Intranet solutions in the enterprise software market, Netscape is expanding its product line to include enterprise applications for linking businesses to one another on Extranets.
Using the Netscape CommerceXpert products and GE' systems integration and trading community management services, global companies can extend their Intranets out to Extranets for information sharing and business transactions with other businesses and for connecting their business to the millions of professionals that look daily to the Internet as a means of providing online products, information and services.
Netscape's expanded strategy doubles the size of Netscape's target business market. According to industry forecasts, the Intranet software market represents a $10 billion market by the year 2000. With the addition of the electronic commerce products and Internet advertising and transactions markets, the estimated market doubles to approximately $20 billion.
Studies show that the electronic commerce solutions and services market will grow quickly to $22 billion by the year 2000. Services such as systems integration, electronic commerce consulting, electronic commerce outsourcing and electronic trading community management are the fastest growing segment of that market. GE's 20 years of leadership in electronic commerce gives it unique capabilities in this arena.
The distribution agreement strengthens GE's market strategy to internetwork global enterprises with its trading partners to dramatically reduce cycle times, eliminate costs and increase customer satisfaction. GE is further focusing its efforts in the solutions segment of the electronic commerce marketplace by combining best-of-market technology products with its services to deliver industry-specific solutions.
Recently, Netscape and GE announced that more than 30 Fortune 1000 companies have already chosen solutions from the CommerceXpert family for Internet commerce on their Extranets. New customers include: Shell Oil, Bell Canada, Hitachi, Kinko's, TNT Logistics, Boise Cascade Office Products and Telefonica, who are using CommerceXpert to create Internet trading communities for sharing and managing critical business information and for linking business processes between enterprises more efficiently.
"With the completion of the new CommerceXpert products and the emergence of market demand for open, scalable Internet commerce solutions, the time is right to bring Actra into the Netscape fold," Netscape's Barksdale continued. "Over the last 18 months, we have dramatically enhanced Netscape's enterprise focus, with new products, sales channels and services and support infrastructure available for our customers as they extend their Netscape Intranet solutions out to Extranets and the world of online commerce."
CommerceXpert is an integrated family of Internet commerce applications for conducting business-to-business and business-to-consumer commerce on the Internet. The family consists of five products focused on buying, selling and merchandising over the Internet that leverage existing EDI and enterprise applications investments. CommerceXpert includes ECXpert, SellerXpert, BuyerXpert, MerchantXpert and PublishingXpert.
GE Information Services is a global leader in business-to-business electronic commerce solutions, managing the world's largest electronic trading community of more than 40,000 trading partners. GE's global networked solutions include EDI and messaging services, Internet, Intranet and Extranet services, and a full suite of applications that help streamline supply chain management processes. GE Information Services combines the power of electronic commerce applications with business process consulting, systems integration, community management and customer support. GE Information Services is one of the twelve key businesses of the General Electric Company and is headquartered in Rockville, Maryland, USA. (www.geis.com)
Netscape Communications Corporation is a premier provider of open software for linking people and information over enterprise networks and the Internet. The company offers a full line of clients, servers, development tools and commercial applications to create a complete platform for next-generation, live online applications. Traded on NASDAQ under the symbol "NSCP," Netscape Communications Corporation is based in Mountain View, California.
Netscape and the Netscape logo are registered trademarks of Netscape Communications Corporation which is registered in the United States and other jurisdictions. Netscape product names are trademarks of Netscape Communications Corporation which may be registered in some jurisdictions. Additional information on Netscape Communications Corporation is available on the Internet at http://home.netscape.com or by sending email to moreinfo@netscape.com. Corporate customers can call 650-937-2555 while consumers can call 650-937-3777 for more information.