Netscape Communications Corp.'s LivePayment program-an Internet payment system the company said would jump-start electronic commerce-is dead.
About a year after it was announced with fanfare by Netscape president James Barksdale, LivePayment has been quietly dismantled and parceled out to several of the company's technology partners that have greater expertise in Internet payments.
The program's demise speaks to the unpredictability of the electronic marketplace and the companies that service it.
"We found that things were different at the beginning of 1996, when we were planning LivePayment, than at the end of the year, when we started with it," said Andres Espineira, director of commercial applications and product marketing at Netscape.
"A lot of our partners had made a lot of progress with products very similar to LivePayment, and they had an investment in this area much larger than we did."
However, he added, "We still have electronic commerce very much as a market that the company goes after."
Scott Smith, an analyst at Jupiter Communications in New York who watched the LivePayment situation unfold, said Netscape's decision to farm out the product made good sense.
"They don't have the resources or the focus to be getting much further into the development of the back end of commerce products, so they've sort of handed it out to different people," Mr. Smith said.
"I'm not at all surprised that it happened."
The week LivePayment was announced, Netscape's stock rose nearly 20%, reaching a high for the year of $75 on May 23, 1996. The company's stock now hovers in the high $20s.
Investors had expressed hope that Netscape's "electronic cash register" product would be as big a boon to the company as its Navigator software, which is used for browsing the Internet's World Wide Web.
But it was not to be. The Mountain View, Calif., company abandoned LivePayment in December, roughly two months after it was released.
Netscape executives said they realized that their company's strength did not lie in facilitating transactions and that getting up to speed would be too costly.
Netscape's partners-whose relationships predated LivePayment-include Cybercash Inc., Verifone Inc., and Trintech Ltd., all of whom focus squarely on payments.
Mr. Espineira said continuing LivePayment would "make the relationships with the partners kind of awkward, in that we would have competing products." Instead, they dropped the program to "tightly integrate" the partners' products with Netscape's servers and other technologies.
The company that stepped in most eagerly to take over LivePayment was Cybercash, of Reston, Va., whose Internet wallet for consumers and Cash Register product for merchants closely mirror the line of software goods Netscape had rolled out. LivePayment even included a "Netscape Wallet."
"LivePayment and Cash Register have come together-there now is Cash Register for Netscape," said Denis Yaro, executive vice president of products and operations for Cybercash. "The Cybercash wallet will be downloadable from Netscape's Web site imminently."
LivePayment's history was brief. It was announced last May, shipped last fall, and scrapped by yearend.
During its brief existence, demand for the $1,995 product was brisk, Mr. Espineira said. About 50 customers were in various stages of using it when Netscape retreated from it, and another 50 already had purchased the software. Thousands of others expressed interest by downloading the program.
But by February, Netscape's partner companies had already begun to shoulder committed customers.
"We decided to make the transition as soon as possible instead of continuing to grow the customer base and having larger and larger numbers of customers that we would have to then transition," Mr. Espineira said.
"We felt the value added in LivePayment was the ease in which you could quickly set up a store or set up a site and start processing payments, and all that expertise is what we really transferred to the partners," he added.
The transition involved some small disruptions for some customers, Mr. Espineira said. But the fact that First Data Corp. handled transaction processing for both Cybercash and Netscape was a help, he said, and Netscape tried to aid the process by disclosing to its partners the JavaScript and other specifications it used in writing LivePayment.
Today, the Cash Register for the Netscape offering can be integrated with a merchant's Web site in as little as a day, Mr. Yaro said. About 500 merchants use Cash Register, he said.
Netscape does not view the demise of the program as a failure. Mr. Espineira said he and his colleagues consider it a lesson in the turbulence of electronic commerce.
When LivePayment first hit the drawing board, few companies processed credit cards on the Internet in real-time, and Microsoft Corp.-Netscape's archrival-had announced its intention to do so. (Microsoft, like Netscape, abandoned the project and handed it over to Verifone and other partners.)
"I think you're going to see a lot more of this: People try things; they don't necessarily work out as planned; they go partner with somebody," Mr. Yaro said.
"I've been doing Internet stuff for almost 15 years, and the one thing I've seen consistently is that almost every interesting solution involves some creative partnering."
