Today I’ll wrap up my series of posts looking back at the Microsoft Case, by looking at the Second Browser War that is now heating up.
The First Browser War, of course, started in the mid-1990s with the rise of Netscape and its Navigator browser. Microsoft was slow to spot the importance the Web and raced to catch up. With version 3 of its Internet Explorer browser, released in 1996, Microsoft reached technical parity with Netscape. This was not enough to capture market share – most users stuck with the familiar Navigator – and Microsoft responded by adopting the tactics that provoked the antitrust case. With the help of these tactics, Microsoft won the first browser war, capturing the lion’s share of the browser market as Navigator was sold to AOL and then faded into obscurity.
On its way over the cliff, Netscape spun off an open source version of its browser, dubbing it Mozilla, after the original code name for Netscape’s browser. Over time, the Mozilla project released other software and renamed its browser as Mozilla Firefox. Microsoft, basking in its browser-war victory and high market share, moved its attention elsewhere as Firefox improved steadily. Now Firefox market share is around 15% and growing, and many commentators see Firefox as technically superior to current versions of Internet Explorer. Lately, Microsoft is paying renewed attention to Internet Explorer and the browser market. This may be the start of a Second Browser War.
It’s interesting to contrast the Second Browser War with the First. I see four main differences.
First, Firefox is an open-source project where Navigator was not. The impact of open source here is not in its zero price – in the First Browser War, both browsers had zero price – but in its organization. Firefox is developed and maintained by a loosely organized coalition of programmers, many of whom work for for-profit companies. There is also a central Mozilla organization, which has its own revenue stream (coming mostly from Google in exchange for Firefox driving search traffic to Google), but the central organization plays a much smaller role in browser development than Netscape did. Mozilla, not needing to pay all of its developers from browser revenue, has a much lower “burn rate” than Netscape did and is therefore much more resistant to attacks on its revenue stream. Indeed, the Firefox technology will survive, and maybe even prosper, even if the central organization is destroyed. In short, an open source competitor is much harder to kill.
The second difference is that this time Microsoft starts with most of the market share, whereas before it had very little. Market share tends to be stable – customers stick with the familiar, unless they have a good reason to switch – so the initial leader has a significant advantage. Microsoft might be able to win the Second Browser War, at least in a market-share sense, just by maintaining technical parity.
The third difference is that technology has advanced a lot in the intervening decade. One implication is that web-based applications are more widespread and practical than before. (But note that participants in the First Browser War probably overestimated the practicality of web-based apps.) This has to be a big issue for Microsoft – the rise of web-based apps reduce its Windows monopoly power – so if anything Microsoft has a stronger incentive to fight hard in the new browser war.
The final difference is that the Second Browser War will be fought in the shadow of the antitrust case. Microsoft will not use all the tactics it used last time but will probably focus more on technical innovation to produce a browser that is at least good enough that customers won’t switch to Firefox. If Firefox responds by innovating more itself, the result will be an innovation race that will benefit consumers.
The First Browser War brought a flood of innovation, along with some unsavory tactics. If the Second Browser War brings us the same kind of innovation, in a fair fight, we’ll all be better off, and the browsers of 2018 will be better than we expected.