AOL, IE marriage on the rocks

While spokespeople from America Online (AOL) and Microsoft denied that they were filing for divorce over their expired browser contract on Thursday, they did confirm that each side is free to see other people.

Reports surfaced Wednesday that AOL could be planning to dump Microsoft's Internet Explorer (IE) Web browser from its client software in place of AOL's own Netscape Communications Corp. browser, given that their contract expired Jan. 1, 2001 and has yet to be renewed. The contract had an exclusivity clause that made IE the only browser that could be bundled with AOL's client software.

Spokesmen from each company refused to confirm Thursday whether they are renegotiating.

"There are no agreements at this point," said Microsoft spokesman Jim Cullinan. "They are free to use any technology they want."

AOL, however, gave no indication that it plans to yank IE from its software at this point and insert the browser from Netscape, a company AOL purchased in 1999.

"We continue to believe that carriage of IE is important," said AOL spokesman Jim Whitney.

And indeed, the alliance appears to be an advantageous deal for both companies: Microsoft gets access to AOL's legion of nearly 30 million subscribers, while AOL gets automatically packaged into the world's dominant desktop operating system.

It's a volatile marriage, however. Last January 2001, for instance, as Microsoft continued to fight the US Department of Justice's monopoly ruling, AOL filed an amicus curiae (friend of the court) brief on behalf of Netscape, requesting that the court uphold its ruling to break the software mammoth in two. In the brief, AOL accused Microsoft of using "a broad range of predatory tactics to maintain its existing monopoly."

Given the competition between the two companies, one wonders how long they will stay bedfellows.

"They (AOL) own Netscape so it would make sense that they would use it," said Billy Pidgeon, a client technologies analyst with market research and consulting firm Jupiter Media Metrix Inc.

Pidgeon added that Netscape could benefit AOL in its "AOL Anywhere" wireless campaign, adding that Netscape is better in terms of modular components, a key advantage in the wireless market.

Despite this, Pidgeon believes that the contract will be renegotiated.

"I don't think they are ready to switch to Netscape right away," said Pidgeon, citing bugs and testing issues related to the Netscape browser.

Whether the marriage's advantages spur a reconciliation, or if both sides prefer to go their separate ways, Pidgeon says that he doesn't believe consumers will care either way.

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