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Tuesday, January 27, 1998 Published at 23:33 GMT


Browser wars cost Netscape dear
image: [ Netscape shares have plummeted as the browser wars heat up ]
Netscape shares have plummeted as the browser wars heat up

The makers of one of the Internet's leading browsers, Netscape Communications, has suffered a setback, with the company reporting a net fourth quarter loss of $88.33m (£55.2m).

This compares with earnings of $8.15m in the same period of 1996.

Per share the loss came to 92 cents, after a gain of nine cents in the fourth quarter of 1996, the company said.

Sales came to $125.28m dollars in the quarter, up from $115.15m.

Excluding various one-time charges, Netscape lost $20.77m, or 22 cents per share, in the quarter. Wall Street analysts had expected a 16 cent per-share loss.

Netscape had warned of a loss exceeding $80m earlier this month.

Overall revenues grew 9% to $125.3m from $115.2m, but slipped from software sales in the latest evidence of damage from Microsoft in the browser wars.

While Netscape's Navigator software for browsing the Internet is used by a large number of Net surfers, Microsoft's aggressive marketing tactics have sharply cut into sales.

[ image: Netscape browser now available for free]
Netscape browser now available for free
By giving away its browser and cutting deals with PC makers and Internet service providers, Microsoft's Internet Explorer browser came from nowhere two years ago to capture nearly half of the market.

Last week Netscape capitulated to market pressure and said it would also give away its browser for free.

In addition to falling browser revenue, Netscape blamed slower than expected growth in its corporate software and services business.

The company took a one-time charge of $23m in the fourth quarter to reduce its work force, close some offices and make other cuts.

For the full year, Netscape said it lost $115.5m, or $1.23 per share on a diluted basis. In 1996, Netscape earned $19.5 million, or 21 cents per share.

Revenues last year were $533.9m, up from $346.3m.

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