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Changes at Netscape Foreshadow AOL's Evolution

By Sara Kehaulani Goo
Washington Post Staff Writer
Thursday, July 27, 2006

It's an Internet brand that once was a household name but has fallen on hard times, and now its corporate masters are trying to remake it through radical surgery.

That's where things stand for former Web trailblazer Netscape, as current owner AOL LLC works to breathe new life into the old name. But the description also fits AOL, which is going through rebirth pangs at the hands of its parent, Time Warner Inc., as that company's board meets today in New York to consider the Internet company's future.

Time Warner and AOL have declined to discuss details of AOL's conversion to a free Web portal from a subscription service, withholding comment until earnings are reported next week.

But the shape of that future is evident in the way AOL is fiddling with Netscape, one of the first Internet browsers, in the early 1990s. It has since been bought by AOL and now languishes as a faint ghost in the shadow of Microsoft's Internet Explorer.

AOL has chosen a bold and risky path for Netscape, turning its old business model on its head and embracing new concepts at the risk of alienating the brand's core audience. In June, Netscape replaced its traditional portal home page with a design that emphasizes short news bits and encourages users to vote on the stories they like. The items with the most votes attract more attention, and the content changes constantly throughout the day. The idea is to engage users in a deeper way with more relevant and offbeat information.

"We had two portals, AOL and Netscape. . . . They were both the same concept. We looked at that and said this social-news-journalism space is really appealing to a younger audience," said Jason Calacanis, founder of Weblogs Inc., a blogging company, who was hired by AOL to refresh Netscape.

"This is an example of AOL getting more aggressive," he said. "It's a very new concept. We did take a very forward-looking approach. We know this is the future."

The transition has been painful.

Bloggers delighted in noting that one of the earliest popular items on Netscape came from someone who questioned the site's new design. Hundreds of people posted comments, mostly to join in bashing the site. "Basically, I feel that we were hijacked," wrote a user with the screen name "ubnjtx."

Dozens of people complained that they could no longer find their Netscape e-mail accounts and that a note on the new site encouraged people to use AOL if they didn't like the new Netscape. A man named Bert Lao started an online petition to "Bring back our Netscape.com," which attracted more than 1,400 signatures.

"I watch netscape for the news, not peoples' opinions of what the best stories are!" wrote Susan Armstrong next to her petition signature. Another user, who signed as Lou Ann Lim, wrote, "Other site was much easier and more enjoyable to read!" More simply put, a petitioner who signed as Bruce Moore wrote, "The new format STINKS!!!!"

The prospect of driving away loyal Netscape users in a gamble to win a new audience mirrors what's going on with AOL as a whole, which has been losing dial-up subscribers by the millions and is trying to become a free Web portal that makes money through advertising, much as Yahoo does. Many AOL services are now free for everyone, such as entertainment content. The company is reportedly considering making other content on AOL.com, such as parental control tools, free as well.

Analysts have said such a move could cost AOL $1.8 billion in lost subscription fees and could lead to layoffs of hundreds at its Dulles headquarters and call centers around the country. Such details could be addressed after today's Time Warner board meeting.

For both AOL and Netscape, the challenge is to catch up to an Internet that has dramatically changed since the two were in their heyday a decade ago.

The new Netscape is modeled after Digg.com, a Web site popular among the techie crowd that began as a site for tech-related gossip, news and commentary. Users enjoy a lively discussion of the news and take pride in influencing what becomes popular on the site by voting on -- or digg-ing -- items.

Despite the popularity of Digg.com, Calacanis said the vast majority of visitors there do not vote or submit material -- that's handled by a small cadre of loyal users. Netscape must also find a small but active nucleus of users who will constantly feed the site new nuggets and help build a broader following, he said.

So last week, Netscape offered to pay Internet users $1,000 a month to contribute regular, interesting information -- a blog item or a news story from a far corner of the world. It also has employed eight "anchors" who follow up on popular news stories or conduct fact-checking to ensure certain stories are accurate.

"What he's doing is trying to seed [a new online community] by bringing over some other people from other communities," said Amy Gahran, a media consultant and blogger at Contentious.com. "I don't think it's a bad idea. The role of the professional [news] aggregator -- we're going to see that a lot more."

But others involved in online journalism say Netscape's strategy is all wrong. The tech crowd or other small-knit groups may love the idea of voting on news, but it's untested on a mass audience, said Chris Nolan, founder of Spot-on.com, a news site. "When it goes large to the mainstream, [the appeal] tends to weaken," Nolan said.

Calacanis said he expects it will take some time to get Netscape off the ground and that the amount of traffic on the site will likely dip by "double digits" as it works its way through the transition. "I'm satisfied with where we're at. We're getting good stories in the system. We're getting converts," he said, noting that even the negative response has helped drive traffic.

Whether the experiment succeeds or fails, AOL and Netscape had little choice but to try, said tech consultant Rob Enderle. "Odds are against them being successful. But they're a lot better off than staying on the same path."

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