New Netscape Line-Up

New Netscape Line-Up

From The Search Engine Report
June 3, 1998

Netscape has unveiled the most sweeping changes to its important Net Search page since it established its landmark pay-for-placement deals on the page in April 1996.

Most significant is that Netscape is now running its own, branded search engine, Netscape Search. It's powered by Excite, in the same way that Excite provides results for the AOL NetFind search engine.

Netscape now occupies one of the coveted "Premier Partner" positions on the Net Search page. By default, the page will open to Netscape Search 25 percent of the time.

Netscape's new partner Excite also receives a traffic share of 25 percent. The remainder of the page's traffic is rotated among veteran Net Search partners Infoseek and Lycos, and two newcomers to the premier line-up, AltaVista and LookSmart. Previously, these two had shared space within the now defunct Marquee Provider section.

Exact traffic shares for these remaining four were not disclosed, except that none are getting more than a 15 percent share.

Next year, Netscape Search will jump to receiving a 50 percent slice of the traffic, while Excite will stay at the same level and everyone else will share the remaining 25 percent.

Yahoo is the biggest absence. The company decided that it no longer needed a strong presence on the page, due to the considerable traffic it receives beyond Netscape. Reports are that only five to eight percent of Yahoo's traffic came from Netscape. Now it is listed below the fold, among numerous other search options.

Yahoo is also abandoning its partnership with Netscape to produce the Netscape Guide By Yahoo. The partnership began last year, but it made little sense for it to continue in the wake of Excite landing a $70 million deal to program the Netscape web site.

Netscape decided in March to try and emulate the success of search-turned-portal sites such as Excite and Yahoo by building out content within its own site. It relabeled its site "Netscape Netcenter," then went on the hunt for someone to provide it with a branded search engine and build out content for web surfers.

Excite won the bid in May. Over the next two years, it will produce content for the site and power Netscape Search. In return, it receives the right to sell advertising and positioning partnerships within Netcenter, plus receives its own positioning on the Net Search page. New content should be appearing within the month, Excite says.

Eyebrows have been raised over the huge sum Excite paid, especially in light of the fact that Yahoo says it couldn't earn the money it had expected when it was producing content for Netscape.

Excite Executive Vice President Brett Bullington says his company can do better. He also points out that $20 million would have been spent on positioning Excite within Netscape anyway, leaving only $50 million that it needs to recover through ad and partnership sales. "Can we sell $25 million this year and next year? I think we should be able to," Bullington said.

In fact, Excite just announced that it has signed agreements for $21 million in advertising revenues in connection with the deal, putting it a third of the way toward covering the initial cost.

Concerns have also been raised over the fact that Netscape can walk away from Excite after the two years but keep all the content and programming tools Excite creates for it. The possible repercussions of such a handover are one of the reasons Yahoo declined the deal.

"The coup de grace for us was the turning over the technology and tools to Netscape, with no guarantee of renewal. Basically, you could create a competitor," said Jeff Mallett, Yahoo's chief operating officer.

Again, Excite says it can make the partnership work to its advantage. "We think in the end, we'll both learn how to win and exit with something out of it," Bullington said. In the strange land of the Internet, where "coopetition" rules, he may be right.

Meanwhile, on the heels of getting its search partnerships in order, Netscape has announced it plans to implement new "Smart Browsing" features by the end of July. These will likely incorporate Alexa site discovery technology into the browser and a word addressing system that sounds similar to Real Name, described below. However, the system will probably depend more on forwarding queries to search services. Expect more on this next month.

Yahoo ends ties to Netscape
News.com, May 21, 1998
http://news.com/News/Item/0,4,22402,00.html

Yahoo's reasons for departing Netscape, with some interesting stats on the share of traffic it had received.

High-Stakes Deal For Excite, Netscape
Internet World, May 11, 1998
http://www.internetworld.com/print/current/news/19980511-stakes.html

General details on the partnership.

Why Infoseek Walked
Red Herring, May 12, 1998
http://www.herring.com/insider/1998/0512/seekwalks.html

Nice details on why Infoseek didn't think the Netscape deal was good for it to pursue, along with some stats on traffic the service has received from Netscape.

Excite Executives Cross Their Fingers That Payoff Will Come
Internet World, May 11, 1998
http://www.internetworld.com/print/current/news/19980511-fingers.html

Details on the amount Excite is paying to Netscape, along with guarantees that it gets some money back if expected traffic levels aren't reached.

Excite to power Netscape search
News.com, May 4, 1998
http://www.news.com/News/Item/0,4,21757,00.html

General details on the partnership.

Alexa: Searching Serendipity And More
The Search Engine Report, Jan. 9, 1998

More about Alexa, whose technology Netscape will be using soon.