AOL reorganises to fold in Netscape

America Online announced yesterday it would reorganise into four product groups, including one devoted to Netscape Communications Corp.'s operations, and would lay off up to 1000 workers combined at both AOL and Netscape.

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

Each of the 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.

Meanwhile, AOL said 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 will take a charge in its fiscal 1999 third quarter for the reorganisation and integration of Netscape, but said the amount of the charge will be announced later.

AOL announced its intent to buy Netscape in November in a stock-for-stock transaction worth about $US4.2 billion.

In related news, former Netscape Communications chairman Jim Barksdale this week said you shouldn't expect to see him taking on another top executive job anytime soon -- or anytime at all for that matter.

Barksdale, who is leaving Netscape in the wake of its takeover by America Online (AOL), says he has no interest in taking on a new active manager's role. His comments came at GartnerGroup's Spring Symposium/ITxpo 99 conference in San Diego.

Barksdale says he's had enough of answering to shareholders and boards of directors and instead will invest in new companies and sit on boards of directors himself. Barksdale is on AOL's board of directors.

He also joked that he might become an industry analyst. Barksdale, a former Federal Express chief information officer, led Netscape during its five years of independence.

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