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Netscape Communications

No. 2, Sales Growth

May 06, 1997|GREG MILLER

Its stock price plunged and its share of the Internet browser market shrank, but Netscape Communications Corp. continued to grow at a breakneck pace in 1996.

The Mountain View-based company's sales soared to $346 million last year, up 310% from a year earlier. The growth was largely fueled by the company's successful effort to go beyond the browser by developing an array of software for corporate customers.

The strategy is tied to using the Internet--and proprietary intranets--as tools for managing data and sharing information not only among employees, but also customers and suppliers. The move puts Netscape on a collision course with powerful companies entrenched in this market, including Microsoft Corp. and IBM Corp.

Meanwhile, Microsoft has made inroads into the Internet browser market that Netscape once owned almost exclusively. Netscape's Navigator program now holds about 70% of the market, with Microsoft's Explorer accounting for much of the rest.

All of which helps explain why, despite Netscape's impressive growth, the company's stock has fallen from a 1996 high of $86 a share to about $28 recently on Nasdaq.

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