History of the Internet - the Browser wars

Written by Ian Peter

(with thanks to the excellent Wikipedia article on the same subject)



By mid-1995, popular culture had begun to notice the web, and Netscape Navigator was the de facto standard for web browsing at that time. An ex-colleague of Tim Berners-Lee called Mark Andreesen founded the Netscape Corporation, which built on the previous Mosaic browser to establish the first mass-market browser, the Netscape Navigator.



In August 1995 Netscape became a public company, fuelled by the success of the world wide web, and, to many minds ushered in the Dotcom boom (see our article here which traces the dotcom bubble to earlier non-Internet origins, however)



To that point of time, Microsoft had thought the future action would be in multi channel interactive cable television. However the success of Netscape caused it to release Internet Explorer 1.0 as part of the Microsoft Windows 95 Plus Pack in August 1995. Internet Explorer 2.0 was released three months later, and by then the race was on.



New versions of Netscape Navigator (later Netscape Communicator) and Internet Explorer were released at a rapid pace over the following few years. Features often took priority over bug fixes, and therefore the browser wars were a time of unstable browsers and lots of user headaches. Internet Explorer only began to approach par with its competition with version 3.0 (1996).



In 1997 Netscape still held 72% of the browser market. But in October 1997, Internet Explorer 4.0 was released and changed the tides of the browser wars. It was faster and it adopted the W3C's published specifications more faithfully than Netscape Navigator 4.0.



A lot was at stake for these two companies involved in the browser wars. A popular web browser could earn a lot of money: search engine companies would bid to be the default tool used in the web browser, and other companies with a web presence would bid to be listed in the default set of bookmarks which was preinstalled with the browser. Since a web browser is a powerful gateway to a great deal of information, the company which controlled this gateway could conceivably have a lot of influence over its users.



Microsoft had two strong advantages in the browser wars. One was simply an issue of resources: Netscape began with a nearly 90% market share and a good deal of public goodwill, but as a relatively small company deriving the great bulk of its income from what was essentially a single product (Navigator and its derivatives), it was financially vulnerable. Netscape's total revenue never exceeded the interest income generated by Microsoft's cash on hand.



The other, more important, advantage was that Microsoft Windows had a monopoly in the operating system marketplace that could be used to leverage IE to a dominant position. IE was bundled with every copy of Windows; therefore, even though early versions of IE were markedly inferior to Netscape's browser, Microsoft was still able to enlarge its market share. And IE remained free while the enormous revenues from Windows were used to fund its development and marketing, resulting in rapid improvements until it was so similar to Netscape feature-wise that users had no desire to download and install Netscape.



Other Microsoft actions also hurt Netscape, such as:



Netscape's business model was to give away its browser but sell server software. Microsoft understood this and attacked Netscape's revenue sources, bundling Microsoft's Internet Information Server web server "free" with server versions of Windows, and offering Microsoft customers workalike clones of Netscape's proxy server, mail server, news server, and other software free or at steep discounts. This didn't have much effect at first, as much of Netscape's revenues came from customers using Sun Microsystems servers, but the gradual result was to make Windows NT more popular as a server for Internet and intranet while cutting off Netscape's income.

Microsoft created licensing agreements with computer manufacturers requiring them to provide desktop icons for IE, while penalizing them for shipping Netscape on their computers.

Microsoft made it very easy for small and medium ISPs to release branded versions of Internet Explorer, and with few exceptions they did, meaning that users of many ISPs were encouraged to use Internet Explorer and not Netscape.

Microsoft created a licensing agreement with AOL to base AOL's primary interface on IE rather than Netscape.

Microsoft purchased and released a web authoring tool, FrontPage, that tended to create pages that looked better in IE.

The effect of these actions were to "cut off Netscape's air supply," as stated by a Microsoft executive during the United States v. Microsoft case (which resulted in Microsoft being prosecuted for having used its monopoly status to manipulate the market). This, together with several bad business decisions on Netscape's part, led to Netscape's defeat by the end of 1998, after which the company was acquired by America Online for USD $4.2 billion. Internet Explorer became the new dominant browser, attaining a peak of about 96% of the web browser usage share during 2002, more than Netscape had at its peak.



Thus ended the pioneering era of web browsers, with the dominant software company dominating the market. Microsoft might have been a late entry, but to this day it has remained dominant in the browser market, challenged only recently by the excellent Mozilla browser.



Lovers of legal battles and supporters of the free software movement can see in the browser wars classic examples of what began to happen as the Internet began to move towards mass markets. And that move to mass markets most closely finds a birthday in August,1995.



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