AOL agrees $4.2bn Netscape deal

AMERICA ONLINE confirmed yesterday that it has reached an agreement to buy Netscape Communications, the browser pioneer, in a deal worth about $4.2bn.

The acquisition also includes a side-agreement with another Microsoft foe, Sun Microsystems. Sun will undertake to distribute Netscape's business- level software. In exchange, AOL will buy services and hardware from Sun worth $500m through the year 2002.

The deal effectively marks the demise of Netscape, which after its creation in 1994 soared on the popularity of its Navigator browser software. It then found itself almost crushed by competition from Internet Explorer, the browser developed by Microsoft.

With 14 million subscribers to its online service, AOL emerges with two of the four most popular sites on the world wide web.