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Paul Festa

Staff Writer, CNET

Netscape next month is expected to release a test version of a Web browser designed to resist phishing schemes, taking aim at recent security vulnerabilities in Microsoft’s Web browser.

Netscape, a unit of Time Warner subsidiary America Online, has been recharging its browser activity in recent months, prodded by the success of its open-source spin-off, the Mozilla Foundation, and by the prospects of increased revenue through browser-based search queries.

On Feb. 17, Netscape is expected to release both the second test, or “beta,” version of Netscape 8 and a redesigned portal site.

Netscape–founded 10 years ago by the creators of the pioneering Mosaic browser–once ruled the roost of the browser world with better than 80 percent of the market. But Microsoft’s Internet Explorer wrested the market away and now enjoys better than 90 percent usage worldwide, according to most surveys.

The advent of Mozilla’s Firefox browser, which has seen more than 20 million downloads since its November launch, has pushed IE’s numbers down incrementally but steadily in the past several months.

The spectacle of IE’s vulnerability–particularly on security issues–has encouraged Netscape and other browsing software makers to make security their main selling point.

For example, Netscape is in negotiations with various security companies to supply the Netscape 8 beta with frequently updated blacklists of Web sites that are suspected of purveying spyware, phishing schemes and other hostile code. When someone accesses such a site using Netscape 8, the browser would flash warnings to the user and disable various technologies with security implications, including ActiveX, scripting and cookies.

Sites thought to be harmless would join a white list and gain a green-light icon in the address bar. Unknown sites would be coded yellow.

In phishing schemes, fraudsters lure victims to Web sites faked to look like they belong to trusted providers such as banks. They then attempt to persuade the victims to hand over sensitive personal information such as credit card numbers.

Netscape, which is outsourcing browser development work to Canadian development firm Mercurial Communications after slashing its own in-house developer staff, would not be the first to offer such antiphishing features. Deepnet Explorer–a browser shell that relies on the Internet Explorer engine–last month launched its own antiphishing browser.

But Netscape’s antiphishing feature would differentiate it from both IE and from Firefox, with which the company will increasingly have to contend in its battle for new market share.

Netscape claims to be the No. 2 browser company–after Microsoft–but sources close to the company say that Firefox is gaining “really fast.”

“Firefox is moving the needle,” said one source close to Netscape who asked not to be named. “They are gaining very rapidly.”

Netscape confirmed that it would release the browser and portal betas Feb. 17, but otherwise declined to comment.

With IE commanding such a huge share of the market, Microsoft clearly has the most to lose in the new battle of the browsers. But Firefox and Netscape also will have to compete against each other for crucial markets as corporate customers and consumer contemplate their options.

Firefox has targeted its next release–Version 1.1–at the enterprise sector, but that release is now set to launch three months later than expected.

Mozilla has set its sights on gaining bundling deals with computer manufacturers this year, a crucial element of Microsoft’s original winning strategy for IE. Sources say that AOL has not ruled out making a play for bundling deals as well.

In November, Netscape released the first test, or “alpha,” version of its new browser based on Mozilla’s Firefox software. Among the surprises in the preview of Netscape 8 was the option of viewing pages in Mozilla’s Gecko rendering engine or in IE’s engine if the page doesn’t render properly in Firefox.

In addition to providing the antiphishing alerts, the new beta will let surfers add RSS (Really Simple Syndication) feeds to their browser with a single mouse click, and will simplify the process of designating a set of tabs as their home page.