AOL to Relaunch Netscape as Community-Based News Site

Netscape, the browser company whose rise and fall helped define the first decade of the World Wide Web, is being revamped yet again by parent company AOL, which hopes to fashion it into a news site that leverages some of the hottest trends in today's Web -- social-networking, tagging and blogging.

AOL has relaunched Netscape as an open community news site, inviting users to post news tidbits and respond to others' posts in weblog-style but also using paid "anchors" to select stories and bring some level of editorial control to the chaos.

The open format is a recipe that has worked extremely well for tech-focused sites such as Slashdot and Digg.com, but has not been done on a large scale for more general news and information.

AOL is trying to compete with sites such as Google (Nasdaq: GOOG) News and Yahoo (Nasdaq: YHOO) News by offering a different take on deciding what's hot and noteworthy, a combination of vox populi and editorial oversight that AOL hopes users will find the best of both worlds.

The redesign is the first major change for Netscape since AOL launched the latest version of the namesake browser last year, hoping to capitalize on the vulnerability of Microsoft's (Nasdaq: MSFT) Internet Explorer due to heightened security concerns. That hasn't worked as well as hoped and AOL may be hoping that the Netscape name and brand still has enough juice left to help it carve out a niche for itself in the news space.

The site went live early Thursday and is expected to be formally launched by July 1st.

Community, With a Twist

On the site, visitors can submit links to interesting articles they find elsewhere on the Web and vote on their favorites, with top-ranked stories being moved onto the home page and into areas set up to focus on specific topics, such as technology, careers, gadgets, celebrities and "do no evil."

By making a departure from the Netscape.com portal -- which remains live -- AOL is taking a risk of alienating a small but apparently somewhat loyal user base. According to data from comScore, Netscape.com draws between 11 million and 12 users each month, putting it outside the top 50 busiest Web sites. comScore says users return on average about seven times per month, which is below the dozen days per month the average user visits Yahoo.

If the new format is a success , it could help AOL capture additional advertising revenue by giving it more raw landscape to populate with graphical ads and the contextual advertising that it gets through its recently renewed and expanded partnership with Google.

That could help AOL further wean itself from its dependence on subscription revenue, which has been dropping steadily for several years and which prompted the online unit of Time Warner (NYSE: TWX) to make AOL.com a public-facing portal last year after operating it for more than a decade as a walled-off Web space open only to subscribers.

AOL has made its share of bets on social networking and blogging in the past, most notably through its acquisition of Weblogs last October.

The company says that Netscsape's existing traffic instantly leapfrogs it ahead of rival sites such as Digg.com, which draws just over 1 million visitors per month, and Del.icio.us, the tagging-style site that Yahoo bought late last year and which boasts about a half million registered users.

It would rank behind YouTube.com, however, which Nielsen//NetRatings estimates attracted more than 12 million users per day during April. That site is heavily focused on video, which would be a logical fit for the Netscape site given its ties to AOL parent Time Warner.

Internet Icon

Netscape became a symbol of the World Wide Web's rise when it went public in 1995, only to later become a different touchpoint when its dominant market share was quickly and systematically wiped out by Microsoft's Internet Explorer. That change in turn brought about the Justice Department's antitrust actions against Microsoft.

Though the Netscape-branded browser has faded, the company is also credited with establishing the Mozilla Foundation to create an open-source browser when open source was still a below-the-radar idea. Today, Mozilla's Firefox is wresting market share from Microsoft's IE, though that browser still dominates.

Netscape.com served various functions over the years, meanwhile, including as a standalone portal that got little traction among users compared to the big players such as Yahoo, MSN and the revamped and public AOL.com. AOL, which bought Netscape in 1999, also tried to make it a business-focused portal, also without much success.

The theory behind the site is to combine the "wisdom of crowds" with the professional sheen that paid editors bring to a news site, said JupiterResearch analyst David Card.

"It's a bold, aggressive attempt to re-invent what was once a great Internet brand," he said, but one that faces numerous challenges to be successful.

For instance, Netscape's existing user base may not convert from the lightweight portal to the new news site and in its current form, the site does little to leverage AOL's Web services -- including its dominant instant messaging platform -- or the rest of the Time Warner family of content.

Still, as part of AOL, Card said, the new Netscape site "should be able to learn from the best practices of the original -- and best -- online network."

AOL is already showing signs that it will be the portal to watch as competition heats up among it, Yahoo, Google and MSN, because of the site's strength in instant messaging, its strength among heavy Web users, especially teens, and its deep well of Time Warner content, Forrester Research analyst Charlene Li said.

"AOL is already the comeback kid of portals and now it has its sights sets on bigger goals," Li said.