Netscape’s, Aol’s and Microsoft’s Interests, Batnas and Zone of Possible Agreement

Double Dealmaking in The Browser Wars

Netscape’s, AOL’s and Microsoft’s interests, BATNAs and zone of possible agreement

Netscape essentially only considered AOL as its direct counterpart in the negotiation. They concentrated mostly on the potential short-term benefits as increased incremental sales and disregarded the harm a deal between AOL and Microsoft would result in. This is shown by the fact that Barksdale opposed to the request of creating an AOL-specific Navigator, customized to fit AOL’s aesthetical profile. The real interest for Netscape is not based on their own benefits of a deal, but to avoid that Microsoft clinches it. Netscape had a narrowminded way of thinking about the other parties BATNA. They though that AOL basically needed a good browser for a low price and thought AOL had no better option due to Netscape’s technological advantage against Microsoft. They also thought that the BATNA of Microsoft’s was better and that the deal didn’t have such importance to Microsoft, which led to them think less of their bargaining approach. They also failed to recognize how bad their own BATNA was. Netscape thought it only meant lost revenue and did not consider the danger of not shutting Microsoft out of the market. Concerning their perception of the zone of possible agreement, Netscape disregarded the qualities of Microsoft’s browser and thought that a deal between AOL and Microsoft were a far-fetched idea. Navigator was the only good option in their minds and where unable to find creative ways to a value-creating deal with AOL.

AOL’s interest consists of more than just a regular browser. Case is interested in a browser that can be integrated into AOL’s client software with matching aesthetics, cross-promotion and want to have a close relationship with the provider. These interests are not perceived by Netscape but Microsoft. This effectively means that the zone of possible agreements is much wider for AOL than for Netscape during the whole process. The question AOL asks is not, “What is there?” but “What can be created?”. The mindset within AOL and the situation of the bidding war between the other parties means a huge number of possibilities and a very large zone. AOL’s BATNA was settling a deal with Microsoft and Explorer, which they towards the start of the negotiation thought was a far worse option compared to Netscape’s Navigator. As the negotiations continued, AOL identified the benefit of including Microsoft into the deal and utilized this strategy. This was a method of leveraging their potential gain and they successfully increased their BATNA by doing this.

Microsoft with Gates are well determined to win the battle against Netscape. One of Microsoft’s core asset is the Explorer browser and Navigator puts that asset on risk. The main interest for Microsoft is not particularly