The company is locked in a holding pattern, waiting for a new product to be released. In the meantime, no one is buying the older version of the product. A functionally similar competitor is being given away for free and the marketing muscle behind this product is driven by the most powerful computer company on the planet. Their stock is trading at an all-time low, and their new scheme to invade corporate intranets pits them against entrenched companies such as IBM and Lotus. In a statement to investors, this company recently warned that its product cycle was lengthening and that for at least the short-term, profits would nose-dive. Growth will slow, they said.

This company? Netscape Communications. Once the darling of the Internet world, Netscape is facing heat from competitors everywhere they turn. Users, increasingly upset with their proprietary ways in a world that is driven by open standards, are flocking to Internet Explorer, the Microsoft competitor. So is there good news ahead for the seemingly flailing Mountain View, California company?

"Obviously, for us to be competitive, we have to aim our arrows at the enemy's narrowest line," said James Barksdale, Netscape's president and CEO. "I think we are positioned to be a very big force in the extranet market."

"Extranet," in case you're wondering, is a word invented by Netscape to describe a market they, in fact, invented as well. Normally, this sort of technobabble would indicate some problems at the top, ala Apple's Gil Amelio, but Barksdale may be on to something. You can read all about extranets on the Netscape home page.

Netscape's upcoming product, Communicator, is first rate and its Netcaster component--a "Web-top" that marries your Windows desktop with the Web-- seems to be far nicer than the Microsoft equivalent, Active Desktop (for now, at least). The word "Netscape" is still synonymous with the Internet too, and this has a certain cachet.

As Netscape is discovering, though, the real problem with competition in the computer industry lies waiting for them in the Pacific Northwest. Netscape has something that Microsoft wants and it's probably only a matter of time before they get it. For the company to be more than roadkill on the Information Superhighway (sorry, I couldn't resist), they will need to dominate a market that Microsoft isn't interested in. The question, of course, is whether such a market exists.

For the record, I'd like to see Netscape succeed. While I am not familiar with their server products--and have no desire to use them--their upcoming Communicator/Netcaster suite looks great. The big problem with Netscape from a user standpoint is their insistence on creating proprietary solutions. Someday, Netscape will realize that it's easier to row downstream and not fight the tide of open standards they pretend to endorse.

I even have a solution for them: integrate all of their server products with Microsoft BackOffice on the server end. Make each server component better--and cheaper--than the Microsoft equivalent. Make sure there is always a smooth upgrade path from the Microsoft product to their own. On the client side, simply support the W3C and stick to the HTML standard. Stop creating useless and unwanted proprietary tags that are incompatible with existing methods that achieve the same effect. The way to succeed here is through brand recognition and performance: make Navigator small and fast, and compare it in the press to the bulk of IE4. Sell the browser separately from Communicator instead of force-feeding the huge suite on users who don't need all of that functionality. If you want Microsoft Office, you can get the whole thing or buy the individual components (Word, Excel, etc.) separately. Allow users to pick and choose with Communicator as well. IBM, for example, has refused to buy Navigator 4.0 unless Netscape unbundles it from Communicator. Netscape, for their part, has refused to do so. This is bad business.

In the end, these steps will at least create an atmosphere of competition. This, of course, benefits us--the consumers--most of all. So if I appear to have an ulterior motive here, it's a simple one: I want what's best for users, not what's best for Netscape or Microsoft. Netscape will have to live or die on their own merits. If they make the right moves, they have a chance. Otherwise, they'll end up the 90's version of a Borland or a Lotus: a has-been computer company that started with a bang and ended with a whimper.

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I'm interested in your response to this story. Please mail me at thurrott@bigtent.com and tell me what you think.

--Pau