Even the senior executives are operating out of tiny cubicles. The pace is frantic and no resources go wasted. David Kleinberg, executive vice president and co-founder of the company, uses a FedEx box as a monitor stand in his corner cubicle, within earshot distance from his marketing team.

Physical space is not relevant in the world of NetObjects, a 52-person start-up that has become one of the closely-watched cyberspace developers in Silicon Valley these days. In July, more than 1,500 people were packed into the Museum of Modern Arts in San Francisco, checking out Fusion, the Web authoring tool from NetObjects.

Nibbling Ethiopian, Italian and Chinese hors d'oeuvre, the crowd was serenaded by an ensemble playing world music. Some gathered around John Sculley, former chief executive officer of Apple Computer Inc. and now a private investor at NetObjects. Executives from IBM Corp. and UUNET Technologies Inc. lent their support and announced programs to help NetObjects expand the distribution of Fusion.

``The entire software community is going to endorse it,'' said Promod Haque, a partner of Norwest Venture Capital who sits on the board of NetObjects. Haque said the company has the potential of becoming the de facto standard in Web publishing, much like the ways Adobe Systems Inc. controls the desktop publishing market with tools like PageMaker and PhotoShop.

What NetObjects has in mind is to compete with Adobe, Macromedia Inc., Microsoft Corp. and others to command the next frontier in the software industry, especially at the Web authoring tool level. The stakes are high since the total market for Web software could soar to $4 billion by the year 2000, up from $260 million in 1995, said Daniel Rimer, an analyst with Hambrecht & Quist Inc.

``NetObjects is one of the key contenders in this very big market,'' Rimer said.

The heart of NetObjects' strategy is an object-oriented technology, which the company founders have developed and fine-tuned since 1992 for customers such as Wells Fargo Bank. Called Structure of Linked Objects(SOLO), the technology is similar to Apple's HyperCard in function, but more complex than anything that has been done, Kleinberg said.

One reason for its complexity lies in the relational database that SOLO runs on, allowing browsing and linking capabilities. As a result, its products like Fusion allow users to conceive and edit the hierarchical map of the entire site.

PageDraw, a page-layout feature in Fusion, gives users drag and drop, pixel-level control over virtually any content, with no knowledge of HTML required, the company said.

Kleinberg believes the user-friendliness of its products is far ahead of that from its competitors, known or otherwise, though he realizes that other companies will try to replicate the object-based technology that NetObjects has developed.

``They're going to come at it for sure,'' Kleinberg said.

Tom Melcher, vice president of business development at NetObjects, said the company will boost the features of Fusion and other upcoming products on an accelerated schedule in order to establish a loyal customer base.

``Some of the features will be free and others will carry a fee, but we're not going to nickel and dime our customers,'' Melcher said.

Rimer of Hambrecht & Quist said such an annuity licensing strategy will be prevalent in the Web software market.

Melcher added that he's working on seven more deals that will spur the adoption of NetObjects' technologies at telecommunications, database and ISP firms.

Whether NetObjects will be able to succeed remains an open question, despite favorable press coverage due to its role in helping launch the 24 Hours In Cyberspace project earlier this year, an accomplishment that netted the company $5.4 million in venture funding as well.

Competition will be stiff. Kevin Wandryk, director of product management of the Internet product division at Adobe, said the Mountain View, Calif., developer is going to strengthen its authoring tools like PageMill and SiteMill by leveraging other products such as Acrobat, Photoshop and Illustrator. ``They're going to be much tighter integrated,'' Wandryk said.

While not dismissing NetObjects, Wandryk said the companies on his radar screen are still Microsoft with its FrontPage authoring tool and Netscape with its Netscape Gold.

``It's going to be hard for NetObjects to compete with the Microsoft and Netscape of the world,'' Wandryk said.

NetObjects also has to contend with the installed base issue. Wandryk estimates that Adobe has shipped more than 300,000 copies of PageMill.

Edith Gong, product manager of Navigator 3.0 at Netscape, estimates that it has a 10 percent share of the Web authoring tool market. In addition, 40 percent of the Navigator users now download Navigator Gold on a daily basis, she said. Future versions of Navigator will also offer a wider array of collaborative software features that will make Website maintenance a much less cumbersome task.

At Microsoft, officials said they are building FrontPage capabilities into its Office 97 suite product as well as future versions of Internet Explorer.

Meanwhile, back at the cramped office suite of NetObjects where employees are busy putting final touches on the $695 Fusion 1.0 for official release in September, Kleinberg said he is focusing on one thing: ``To make Web sites easier to design, update and author.''