Lotus to Buy Novell Inc. for $1.3 Billion

In a bold move to become a full-service software house, Lotus Development Corp. announced Friday that it will buy Novell Inc., creator of the top-selling personal computer networking program and leader of one of the most important segments in the PC software industry.

The deal, whose current market value was pegged at about $1.3 billion, teams the two best sellers in their respective software fields to create what analysts said could become a powerful PC software publisher and a well-armed competitor to the giant and entrenched industry leader, Microsoft Corp. in Redmond, Wash.

PC software pioneer Lotus of Cambridge, Mass., is best known for its Lotus 1-2-3 spreadsheet, a program widely credited for spurring massive PC sales in the early 1980s. Novell of Provo, Utah, created NetWare, the best-selling program for linking PCs throughout a business. Novell also is a leader in the fast-growing and increasingly important PC networking field.

“It’s a great move,” said Richard Shaffer, editor of a PC newsletter in New York. “And the new company definitely poses a threat to Microsoft.”

Analysts said the merger, a stock swap expected to become final in July, is one of the best examples to date of the growing importance of efforts to link PCs across networks so users can share information.

Because PCs were originally designed as machines for individuals, linking them together was an afterthought, in some cases resisted by users and thwarted by available technology. But as attempts were made to foster what is now termed “interpersonal computing,” software publishers have been increasingly forced to create programs that can be shared by groups of users, essentially a whole new market and strategy for companies used to the traditional one-program, one-user approach.