Kiva Skims High End Market
David Readerman, an Internet analyst with Nationsbanc Montgomery Securities, says most analysts who know of Kiva had expected the 2 1/2-year-old firm to go public, not sell out. But he says this deal was a smart move for both firms. "It's an interesting acquisition strategically for Netscape," he says.
     Kiva's products primarily target the high-end market and are used in commerce sites, such as E-Trade, Travelocity and CitySearch. Some of the 2,000 largest companies in the world use Kiva's products, which carry prices ranging from $25,000 to $35,000 per processor, many times the price of Netscape's existing products.
     Unix currently controls the market here, with both Microsoft and Netscape far behind. Although Microsoft is likely to jump into the fray, it is far behind the competition, giving Netscape an opportunity to gain a foothold ahead of its staunchest competitor.

But Will the Marriage Succeed?
But integrating Kiva's products with its own will not be a trivial task for Netscape. And, moreover, it raises the question of whether, over the near-term, Netscape's sales force will be able to handle selling two distinctly and fundamentally different products.
     "There's a risk of confusing Netscape's customers with a mixed bag of products that don't look or feel alike," says analyst Charles Finnie of Volpe Brown Whelan & Co. "It's also not clear that Netscape's current sales force can sell a complex product like application server software."