AOLscape?

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The war over the Internet is about to take on a whole new shape. Negotiations are still under way, but service-and-content behemoth America Online looks set to snap up Netscape in a $4 billion all-stock deal Monday. Sun Microsystems, also involved in the talks, would take over Netscape's server-end software; AOL would run the popular Netcenter portal and keep the browser itself in safe hands. Right now, AOL has an exclusive contract with Microsoft to distribute Internet Explorer to its 14 million subscribers; that agreement may expire on January 1, 1999. A deal to divide Netscape with Sun would give AOL's Steve Case a chance to get out of bed with Bill Gates -- whom Case once described as "the enemy" -- by hooking up with Redmond's two biggest rivals.

Microsoft, not surprisingly, is crying foul. Isn't this the same sort of deal that landed us in antitrust court, asked Microsoft legal counsel Charles "Rick" Rule? "Unless [the government is] about to go and criminally charge the Netscape and AOL and Sun people, which they aren't, then they can't claim these kinds of negotiations are improper," he said. Of course, none of these companies have a monopoly like Microsoft's to use as leverage. But the talks may become a vindication of Microsoft's central claim -- that you can't regulate an industry that turns topsy-turvy in a heartbeat. Meanwhile, such a deal couldn't come at a better time for Netscape, which has been struggling financially for three quarters but has seen its stock more than double in the past month. Antitrust, it seems, can be very good for business.