As much as anything, IBM bought its majority stake in NetObjects Inc. as a defensive maneuver, executives from both companies said today. With the investment, IBM no longer has to fear that the Web design tool maker will be bought by an IBM competitor, the executives said.
Investing in NetObjects signals to the industry that the year-old Redwood City, Calif., company will remain "platform independent" and will continue to seek partnerships with other companies, said John M. Thompson, group executive for IBM's Software Group. "We all benefit if NetObjects is free-standing," said Thompson. IBM and NetObjects both wanted the start-up to remain a lean, fast-moving growth company rather than be folded into IBM.
The investment, which gave IBM a majority stake in NetObjects, also clears the way for IBM to begin incorporating NetObjects Fusion, an authoring platform, into Lotus Development Corp.'s Domino Notes Web server, said Dave Kleinberg, NetObjects' vice president of products and a company co-founder.
The start-up's acclaimed design tool, Fusion, already supports Microsoft Corp.'s ActiveX, Sun Microsystems Inc.'s Java and Netscape Communications Corp.'s Plug-In platforms, said Kleinberg. The companies will most likely now look to integrate Fusion into IBM's Kona as well, he said.
Thompson added that the company learned a lesson after it lost access to Vermeer Technologies Inc., another vendor of Web authoring tools, when Microsoft bought it before Big Blue could move.
Analysts saw it that way, too. "It supplements their product line, especially since it increasingly competes with a growing set of capabilities from Microsoft," said Goldman, Sachs & Co. analyst Michael Parekh in New York. "Both are trying to provide as full a spectrum [as possible] of software products for the enterprise market," Parekh added.