Netscape Communications Corp. shares rose 7.8% Friday amid expectations that agreements with five Internet search companies will boost the software maker's revenue. Netscape shares rose $3 to $41.50 on Nasdaq after trading as high as $42.50.
Netscape, maker of the most popular Internet browser software, agreed to feature Excite Inc., Infoseek Corp., Lycos Inc., the McKinley Group Inc. and Yahoo! Inc. on its browser and World Wide Web page.
The five companies, which make software that helps people choose sites they like on the Internet global computer network, are expected to pay as much as $5 million each, for a total of $25 million, to Netscape, industry executives said.
News of the agreements, concluded March 20, began to trickle out early last week. "Perhaps people are just beginning to realize now what this means for us," Netscape spokesman Jennifer O'Mahony said in explaining the stock gain.
Yahoo!, Excite, Infoseek and McKinley each said they agreed to pay $5 million for a one-year agreement with Netscape. Lycos officials declined to comment.
Yahoo!, Lycos and Excite have all filed to sell their first public shares and Infoseek is expected to follow--the latest phase of continuing frenzy over Internet-related stocks. Some analysts, however, have begun to question whether the search companies will enjoy the same kind of wildly successful public offerings that Netscape and other Internet firms have experienced.
Up until now, the heavily trafficked Netscape home page has had a NetDirectory button pointing users to only one Web search site. Until December, that had been Yahoo!, an early pioneer of the search tools that help users find the information they want on the sprawling World Wide Web.
Excite, another start-up that touts a search engine designed to conduct context-sensitive searches, ousted Yahoo! from the spot in December with a deal that expired Sunday.
Now, the Netscape home page will feature a dashboard-style interface with all five services-- Yahoo!, Excite, Infoseek, Lycos and the McKinley Group.