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AOL's Netscape subsidiary is releasing a streamlined, more manageable version of its browser, just as new data shows its worldwide market share has fallen by two thirds in the past year.

Netscape 7.0 is now available for free download. It sports tabbed browsing, new e-mail management tools, and a hook into AOL's online music services.

But archrival Microsoft Internet Explorer clearly owns the market. Netscape's user pool has shrunken to 3.4 percent, according to research released this week by WebSideStory. It is a steep decline from the 13 percent market share Netscape held at the same time last year, says Geoff Johnston, vice president of product marketing for StatMarket, WebSideStory's Web site design and software developer service. IE owns an estimated 96 percent of the market, up from 87 percent a year ago, according to WebSideStory.

The Netscape browser had maintained a steady 13 percent market share over the 14-month period before the release of Netscape 6.1 about a year ago, the researchers say. Netscape hopes to regain some of that market share with version 7.0, which polishes some rough spots present in the previous version.

Preview Version Refined

The shipping version of Netscape 7.0 also refines a few functions of the Preview Release, which was publicly available for three months.

"We listened to user feedback from our Netscape 7.0 Preview Release," says Jeff McAndrew, an AOL spokesperson. Added is a new sidebar management button to the left of the Personal Toolbar at the top of the browser screen. Developers also updated some Mail and Composer icons, as well as installer wizards.

But for users moving from Netscape 6.x, some other changes will stand out. Netscape has restored the Print Preview feature, dropped from the earlier version. The Download Manager controls and interface are revamped for easier use, and the browser now supports Site Icons that appear in the URL field and alongside bookmarks.

Tabbed browsing was a favorite feature among those who tried the Preview Release. The tabs let you view multiple Web pages inside a single browser window without cluttering your desktop; you just tab among them.

Communications Enhanced

The revamped Netscape Mail client adds a pop-up e-mail alert to your system tray. You can also apply color-coded Custom Labels to e-mail messages. Also new is a search field that lets you search for an old message by the sender's e-mail address or subject line.

Restored from earlier versions of the Netscape browser is a filter function designed to combat spam, letting you easily block future messages from senders you designate.

Netscape 7.0's instant messaging client supports both ICQ and AOL Instant Messenger, although the networks remain separate. A new Web search feature lets you initiate a search by highlighting text embedded on a Web page. Another AOL feature supported is Radio@Netscape, now built into the browser with its link to AOL's Spinner online music division.

Eroded Market

Still, to say Netscape 7.0 faces a tough battle is an understatement.

"Something snapped over the last 12 months. Where there was this sort of stable balance before, now it has completely spiraled down for Netscape," say Johnston of WebSideStory, noting the lopsided user statistics.

WebSideStory's research was compiled independently based on a random daily sample of 20 million visitors to thousands of Web sites that use its HitBox visitor analysis service.

Despite the bleak figures for Netscape, it still holds a usage share of more than 7 percent among Web users in Switzerland, and in Germany, Canada, and the United States its market share is more than the 3.4 percent global market share estimate.

AOL Time Warner has said it is considering dropping IE from AOL in favor of technology developed by Netscape.

Gretel Johnston of the IDG News Service contributed to this report.

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