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Pure Play
Nov 24, 1998 ::

Owen Thomas issues an open letter to the CEOs of AOL, Netscape and Sun

Steve, Bark, Scott --

C'mon, guys. You're doing this all wrong.

Merging Netcenter with America Online is smart. But keeping Netscape's software business under AOL's aegis isn't.

Face facts, Steve -- or read the history books. Primehost, Booklink, Naviserver -- the list of companies you've acquired goes on and on. The list of commercial successes from those technology acquisitions is very short indeed.

AOL's a consumer marketing company. Stick to your knitting. Wall Street likes a pure play -- and so does the government.

Bark, timing is everything. Having Mike Homer lead a children's crusade to build Netcenter into a credible portal was clever if your goal was to sell the company at a premium. But it was never a way to save the company -- and it never complemented your enterprise business. You shouldn't burden America Online with maintaining the lie.

Which brings us to Sun. You're a big tease, Mr. McNealy, and it's a real problem for your company. You've toyed with buying companies left and right, only to back off at the last minute. You're too worried about next quarter's results to figure out your next-century strategy.

You want to build a software business. That's a damn good idea, since you're not likely to see much revenue from Java after you open the source code. Don't play around with licensing schemes and accounting shell games: Buy Netscape's software business outright. (AOL doesn't need the browser -- just a guarantee it can control the homepage it defaults to.)

Hardware is not Sun's destiny. Java and the Internet are. Figure out how to build a business around those, or Microsoft will do it for you. And snap up Netscape's products before AOL sullies their reputation among the technical elite. They, not the consumers AOL knows so well, are the ones who will be buying Web servers and building Java apps.

Get this right, guys. And come back when you've come up with a deal that makes sense.

- Owen Thomas is the chief content officer of Ditherati Communications, which recently applied for a patent on sassiness. He may or may not be in ongoing discussions to merge his site with Stating the Obvious and license the underlying technology to The Finger.

(c) 1998 Owen Thomas



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