AOL restructure, Netscape lay-offs

America Online will reorganise into four product groups, including one devoted to Netscape Communications' operations, and will lay off between 700 and 1000 workers from AOL and Netscape combined, the company has announced.

The new product groups will be: the Interactive Services Group, focused on AOL's interactive services including CompuServe and Netscape's Netcenter portal Web site; the Interactive Properties Group, built on properties that work on other platforms such as ICQ instant messaging; the Netscape Enterprise Group, which will also be a part of the new AOL-Sun Microsystems e-commerce strategic alliance (announced yesterday); and the AOL International Group, overseeing AOL and CompuServe operations outside the US.

Each of the four groups will report to Bob Pittman, president and chief operating officer of AOL, and both AOL and Netscape executives will hold key management positions within the groups. Netscape operations will remain based in Mountain View, California, AOL said in a statement.

Meanwhile, AOL said it reduce it would eliminate between 350 and 500 jobs both internally and at Netscape. Currently, about 12,000 people work at the two companies, including about 2500 at Netscape. AOL spokesman Jim Whitney said the company would be finalising over the next few weeks what jobs in which areas of the companies would be cut.

Whitney declined to say which products or services of Netscape's may be phased out. It was clear from the company's statement, though, that Netcenter and Navigator's browsers would be maintained and developed.

AOL plans to expand the reach of Netcenter, which it said would enable AOL to increase its daytime traffic and capture audiences by broadening its reach worldwide. In addition, AOL will release the 5.0 versions of Navigator and Communicator later this year and will continue Netscape's policy of supporting open development and open source through the work of mozilla.org, the organisation that manages Netscape's open source initiative for developers.

"We will continue to build Netscape's successful businesses, including expanding the audience for the popular Netscape Netcenter and extending both the Navigator and Communicator browsers to the emerging market of next-generation Internet devices," Steve Case, AOL chairman and CEO, said in a statement. "This acquisition will greatly accelerate our business momentum by advancing our multiple-brand, multiple-product strategy and helping us take e-commerce to a new level."

AOL and Sun Microsystems' e-commerce alliance, announced yesterday, will see the companies offer turnkey e-commerce products -- modular software flexibility and consulting services -- to companies that want to do business on the Web.

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