May the Best Brand Win: Internet Explorer vs. Netscape

By Mike Schuster  FEB 17, 2009 8:50 AM

In a break from tradition, Goliath defeats David.


It's mind-boggling -- and frankly, horrifying -- to think there was once a time before the internet. Correspondence was done by letter-carrier, urban legends went unchallenged by Google, and students did their research in -- gasp! -- a library.

Internet adoption was slow and gradual, back when there were only a few ways to surf the web. In the early days of online browsing, CompuServe, Prodigy and America Online (TWX) were industry standards; the seemingly infinite Internet was confined to only a handful of software choices.

In 1994, however, a company named Mosaic debuted a fairly intuitive program that allowed users to visit websites quickly and easily. Mosaic named the program Netscape and provided the browser free to non-commercial users. Mosaic, run by a cadre of geeks' geeks, operated under the noble assumption that the Internet should remain free.

Coupling an attractive graphical interface with a revolutionary loading method -- text and graphics would appear in succession as they loaded, rather than everything appearing all at once after endless minutes of load time -- Netscape was a huge success; at its height, it had a remarkable 80% market share.

But along came Microsoft (MSFT) and, as Yoda would put it, "Begun the browser wars have."

As Netscape's chief distribution was through bundling with PC magazines and mailer discs, Internet Explorer had several legs up on the competition: Microsoft simply loaded it onto its PCs and integrated it into all Windows software. Already commanding 90% market share for operating systems, Microsoft had a built-in audience for its native browser.

Also, Netscape's funds for development were minuscule compared to those of the international tech giant. Netscape's chief source of income was through its browser, which remained free for home users. Microsoft had almost unlimited resources to invest in Internet Explorer.

Though it's now hard to imagine, Microsoft once put serious time and effort into improving Internet Explorer. The company vastly improved the source code; its browser eventually ran circles around Netscape's outdated and buggy software.

Microsoft then moved in for the kill. The company began a licensing agreement with AOL to mirror Internet Explorer's interface and generate user familiarity. It released a web-authoring tool called FrontPage to promote Microsoft's proprietary code and non-standard HTML tags, leaving Netscape users with websites that never looked quite right.

Those browsing the net in 1997 must also recall the "Viewed Best in Internet Explorer" buttons that appeared on most sites.

Once even Apple had adopted Microsoft's software as its default browser, it was all over for Netscape. AOL bought the doomed company out for $4.2 billion, and Internet Explorer went on to dominate, with a 96% market share by 2002.

But Microsoft can no longer rest on its laurels.

After AOL bought out Netscape, its developers reorganized. With money secured through the buyout, they created a non-profit, open-source project codenamed Mozilla. You may know it better as Firefox.

Mozilla's Firefox now commands a 21% market share and has been nipping at Microsoft's heels for the past few years. Will there soon be a new browser king in town?
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