Netscape Australia releases statement on "adjustment" of its business

Netscape Australia late yesterday released a cryptic statement announcing that its 'size, structure and the way in which Netscape products and services are sold in Australia' would be 'adjusted following a change of the business model in various territories around the world.' Details of the company's new structure were unavailable - but Netscape Hong Kong has already disappeared overnight.

Netscape Australia late yesterday released a cryptic statement announcing that its "size, structure and the way in which Netscape products and services are sold in Australia" would be "adjusted following a change of the business model in various territories around the world."

Details of the company's new structure were "unavailable at this time" - but Netscape Hong Kong has disappeared overnight.

Yesterdays' Australian statement says Netscape's worldwide professional services division, which is responsible for application design and implementation consulting will remain in Australia "and all major corporate and government clients and business partners will continue to receive support from Netscape."

The statement promises further information "in the near future".

Meanwhile, the Hong Kong office of Netscape has abruptly and quietly closed down due to what the company said is a change to an indirect business model, sparking the rumours that Netscape is closing down its two offices in Australia as well. Commenting on the Hong Kong pullout, Catherine Xu, Netscape's director of marketing for Asia-Pacific says a final decision on whether to close those offices has not yet been made.

Netscape's offices in Japan and Singapore will remain in place, she says, and the Singapore office will continue to serve as the headquarters of Netscape's South Asia operations.

Xu, who was reached at the company's Mountain View, California, headquarters earlier this week, explained that Netscape is revamping its channel strategy in certain markets around the world in order to grow the business and increase profitability.

"The Hong Kong office closed down, and the reason for the restructuring for Asia-Pacific is really trying to see which sales model is functioning well right now and how we can cut costs," Xu said. "Because our company strategy going forward is looking to increase our profit margins, cutting down costs is just as important as increasing revenue."

An evaluation of the North Asia market yielded the conclusion that even though the Hong Kong office "has been adding a lot of value, it is not the most cost-effective and most speedy way to really help our channels," she said. "It was a hard decision to close down that office." Xu said the decision was announced internally on November 5.

Xu defended the decision not to make a general public announcement about the closure.

"We chose not to make any public announcement because we don't want this thing to attract attention," Xu said. "This is a very conscious decision. ...We didn't want to proactively announce it and make it the first headline in the newspaper because that doesn't do anything for anybody. "Closing down our office does not mean we are not committed to Asia. It just [involves] how we are going to plan our business -- it's our internal thing. So if you make a public announcement and stuff, I think that will hurt our distributor."

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