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AOL Reorganizes to Fold in Netscape

Netscape becomes a business unit; AOL will lay off up to 1000.

By Elinor Mills, IDG News   

The new product groups are: Interactive Services Group, covering AOL's interactive services; Interactive Properties Group, for properties that work on other platforms such as ICQ instant messaging; AOL International Group, overseeing AOL and CompuServe operations outside the United States; and Netscape Enterprise Group.

The Netscape group will also be part of a new AOL-Sun Microsystems e-commerce strategic alliance announced Wednesday. Terms of AOL's acquisition granted Sun a broad license to develop and sell Netscape technology.

Each group will report to Bob Pittman, AOL president and chief operating officer. Both AOL and Netscape executives will have key management positions within the groups. Netscape operations will remain based in Mountain View, California, according to AOL.

AOL will 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 reorganization 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 $4.2 billion.