expectations of its $2 billion stock offering in August, then Charles Jadallah will surely have had a lot to do with it. The high-flying company's success will depend on its role in creating business communities and opportunities on the Internet, complete with banking and payment-system linkages. Mr. Jadallah, 35, is a crucial Netscape link to the banking world. He doesn't yet have the name recognition of the people who organized the company over the last 20 months and captured the spotlight during the stock frenzy. They were the chairman, James Clark, who founded Silicon Graphics; president and chief executive officer James Barksdale, formerly of AT&T and McCaw Cellular and Federal Express; and technology vice president Marc Andreesen, the 24-year-old visionary who created the company's core technology - browser software for the Internet - while at the University of Illinois. But in a 500-employee company with a flat management structure, Mr. Jadallah, with the title "director of financial services," is a weighty presence. As point man for banking and financial services, Mr. Jadallah is advocating some of these industries' most far-reaching technology advances. And he finds himself in the middle of some highly charged controversies involving powerful forces like Microsoft Corp., MasterCard International, and Visa International. How Mr. Jadallah and Netscape emerge from this hothouse will influence not just Netscape's performance, but the evolution of electronic commerce and banks' role in it. Some observers of the rapidly evolving on-line scene warn that banks are in danger of losing their "franchise" as payment service providers. They point to Microsoft and its alleged hegemony over computer "gateways" as a threat to banks, and may be hoping that Netscape can be a counter-force. The Mountain View, Calif., company certainly wants to be a counter- gateway. "Basically, our business is to take customers and put them on the Internet," Mr. Jadallah said in a recent interview. But banks will find no sure path to survival. Mr. Jadallah orchestrates a sales effort that targets mutual fund, insurance, and brokerage companies, as well as leading banks in all the major industrialized countries. The company's vision is as open-ended as the Internet itself - that vast "network of computer networks" that couldn't be easily parsed without a robust browsing aid like the Netscape Navigator. Netscape believes this popular software, widely distributed often at no charge, is its ticket to an integral role in electronic commerce. But it will be other systems, essentially enterprise-building blocks, on which Netscape will make its real money, whether serving internal corporate functions like e-mail or work groups, or commercial endeavors like publishing or shopping in "virtual malls" on the Internet's World Wide Web. The company's first public income statement, for the third quarter, showed a $1.4 million profit on $21 million in revenue - which began to silence skeptics who said the stock-market hullabaloo was out of proportion for "a company that never made a cent." Despite Netscape's and Navigator's consumer-level reputation, most of the company's business to date has been "intra-enterprise," Mr. Jadallah said. To promote Internet commerce, "We set up the infrastructure for a value- added service to the merchant and provide the gateway for processing of transactions," Mr. Jadallah said. That gateway is designed to be neutral to meet the needs and preferences of the buyers and sellers. It could accommodate digital cash or micropayments as easily as credit cards. It gives bankers some comfort that, according to market research and anecdotal reports, credit cards are the No. 1 choice of the pioneering payers on the Internet. But the net is inherently insecure, which is where Netscape and competitors want to fill the breach. Netscape builds security into products like I-Store, which merchants can use to open "virtual storefronts" on the net. When I-Store was announced in March, Mr. Andreesen said, "By combining core business functions - such as credit card processing, data management, and billing - with an easy-to-use interface for setting up and managing the system, I-Store lets merchants open for on-line business today, taking advantage of the Internet's global reach to sell their goods and services." Cardservice International, a California-based independent service organization for merchant credit card processing, recently became a distributor of I-Store. Mr. Jadallah saw that announcement, on top of other Netscape relationships with the likes of American Express, Bank of America, Barclays Bank, and First Data Corp., as a portent of a new commercial explosion. Just this week, IBM Corp. became a licensed reseller of Navigator and other products. Bankers hoping to ride Netscape onto the information highway may be heartened by the company's closeness with MasterCard - a relationship that may have gotten even closer since a recent tiff with Microsoft and Visa over what was expected to be a joint specification for on-line transaction security. Interestingly, Mr. Jadallah spent 12 years with Visa before becoming one of the early members of the Netscape sales and support force in mid-1994. Visa's decision with Microsoft in September to break ranks with MasterCard and issue a specification called Secure Transaction Technology embittered the MasterCard-Netscape camp, which also includes IBM, GTE, and Cybercash Inc. They put forward an alternative called Secure Electronic Payment Protocol. Given his background, could Mr. Jadallah be a conciliator? The onus is on Visa and MasterCard as to when or if they might restart their effort, said Jeff Treuhaft, a Netscape product manager working on security and technology issues. "It's an inconvenience for all parties" and violates openness principles, Mr. Treuhaft said. MasterCard has reaffirmed its commitment to the alliance, said senior vice president Edward J. Hogan. "They're definitely the right partners," he said. "We're very pleased." Netscape has taken some lumps in the security area. The company was stung by reports in August and September that its cryptographic systems had been breached. To allay customers' fears, Wells Fargo Bank scaled back an Internet banking program that utilized Netscape technology. The flaws were quickly and relatively easily corrected, Netscape said, and most experts in data security are confident that encryption capabilities over time will keep at least a step ahead of the hackers. Mr. Jadallah pointed out that one of the breaches occurred in Europe on a less-secure type of data encryption that is eligible for export. Netscape is pushing for codes that are more difficult to break. Mr. Jadallah strongly advocates digital signatures and certificates, which can validate the credentials of on-line consumers and merchants, potentially with banks playing crucial roles as guarantors. "That would allow global commerce to take off," Mr. Jadallah said, as credit card transactions on the Internet would no longer have to be subjected to the delays and higher processing costs of telephone or catalogue sales. "I see a whole new system being created, like a Visa, to do the digital certificates for merchants and consumers," he said. Such a system possibly could be aided by smart cards on which private information would be stored. "At Visa I saw an on-line revolution take place, starting with the Verifone (point of sale) terminals," he added. "This is the next one."

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