AOL Uses Netscape for Mac OS X

America Online has snubbed rival Microsoft (Nasdaq: MSFT) by using Netscape browser technology in the newest iteration of its software for Mac OS X, a move that could indicate the company might eventually oust Microsoft from its PC offerings as well.

"They are certainly thinking about it," Rob Lancaster, an analyst at the Yankee Group, told the E-Commerce Times.

That AOL would select Netscape is not surprising. After all, the online service provider owns Netscape, has recently opened its online chat operations to Apple (Nasdaq: AAPL), and is struggling to gain a stronger foothold in a flagging marketplace.

"It wouldn't surprise anyone if they made Netscape the default, but most users will still prefer Internet Explorer," Giga Information Group analyst Ken Smiley told the E-Commerce Times.

Feels Like an Apple

With a look and feel that are well suited for the Mac environment, AOL for Mac OS X uses the Apple operating system's Aqua interface.

Calling the new offering a response to "what our members who use Macs want," David Gang, executive vice president of AOL's product marketing group, hailed the new service as easy to use and "more fully integrated into the Mac environment."

The company has attempted to blend Mac and AOL offerings by putting a counter on the Mac OS X dock so that users can see at a glance how many new e-mail messages and instant messages they have. The company also has offered a new AOL Search service that uses Google technology to help users conduct searches online.

Quick Talk

A single click from the service's new welcome screen will take users directly to their e-mail accounts. In addition, the new version of the software is compatible with Apple's iChat, so Mac.com members, AOL members and AOL Instant Messenger users can interact with one another.

Brian Croll, Apple's senior director of software product marketing , told the E-Commerce Times that iChat "is compatible with the whole [AOL messaging] network."

In fact, Croll said, Apple has built myriad features around its instant messaging effort, including conversation bubbles and "cartoon stuff." In addition, the technology takes advantage of the Mac's built-in features, such as drag-and-drop capability and AirPort home networking.

Ripple Effect?

While no browser is likely to knock the dominant Internet Explorer off of its perch soon, AOL's willingness to forgo Internet Explorer in the Mac world might forecast the eventual end of the browser's inclusion in its Windows version.

"They are rolling it out to the Mac world and testing it out in terms of functionality," said Lancaster. "Based on the success in adoption of the technology, they may be making a decision down the road whether to boot Microsoft."

But analysts contend that AOL's move toward Netscape is not likely to launch a browser war because, as Smiley said, "Even if AOL went all Netscape, the market shares don't turn around enough to be significant."

More significant, though, is what the new AOL release means for the company's Netscape division.

Netscape Division

"They're looking to Netscape as a software division" that can generate new sources of revenue, Lancaster noted.

"They are going to have to ramp up if they are going to support this product at an acceptable level," said Smiley. "Right now, Netscape isn't supported at an acceptable level for the enterprise or for consumers."

Providing that support, according to Smiley, will cost Netscape and AOL considerable dollars for questionable returns. "In my opinion," he said, "it's not a good business decision, as AOL could have focused on providing value and investing elsewhere for better returns."