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Netscape meets expectations and underwhelms Wall Street

Netscape Communications, the darling of Wall Street of late, surprised investors by coming in on target for the fourth quarter. Typically, Netscape has exceeded earnings estimates dramatically. The Mountain View, California, company reported sales of $115 million for the quarter, up from the $41.6 million they reported in the same quarter a year ago. Netscape CFO Peter Currie also cautioned that future growth will not be as fast. Netscape's stock has taken a big hit in recent weeks, dropping $20 between the beginning of January and today, when the stock closed at $38. Analysts fear that increased competition from Microsoft in the browser market and Lotus notes in the groupware/intranet market will stymie Netscape's growth. Currently, over 50% of Netscape's revenues are from Web browser sales. Server sales are strong, however: Netscape announced today that they have sold over 1 million copies of SuiteSpot. Also, Netscape CEO Jim Barksdale announced tonight that the company would rely on E-mail and groupware, not Web browser sales, for a successful 1997. Clearly, the company is at a turning point in its brief life. Using a dumping campaign to establish browser marketshare, the company now accuses Microsoft of the same deed. Sensing the inroads Microsoft was making into its cash cow, Netscape decided last year to focus on intranets and groupware instead of browsers with the Communicator 4.0 suite. What will the future hold? Stay tuned

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