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Microsoft cuts Netscape Web browser lead-Dataquest
Reuters Story - November 17, 1997 00:00
%US %BUS %ENT %TEL %DPR MSFT NSCP DEC V%REUTER P%RTR
SAN JOSE, Calif., Nov 17 (Reuters) - Software giant
Microsoft Corp. has narrowed Netscape Communications
Corp.'s lead in the Web browser market and is on track
to match its rival by mid-1998, Dataquest projected on Monday.
The market research firm, in a survey issued on Monday, said
Netscape is still the leader in the Web browser category with a
market share of 57.6 percent in the third quarter of 1997, but
that Microsoft's market share has roughly doubled in nine months
to 39.4 percent.
Microsoft's share of the high profile market was only 20
percent at the end of the fourth quarter of 1996, when
Netscape's share was 73 percent, according to San Jose-based
Dataquest.
"If Microsoft's growth in browser share continues, Dataquest
projects Internet Explorer to reach parity with Netscape
Navigator as early as the second quarter of 1998," said Kathryn
Hale, principal analyst for Dataquest's Internet Strategies
Worldwide program.
Hale noted that the figures were taken just at the end of
September, when Microsoft's latest version of its browser,
Internet Explorer 4, had just begun shipping.
"What will be really interesting is next quarter's (market
share) data," she said.
The market share figures have been closely scrutinised by
the industry, although browsers are quickly becoming a commodity
given away as part of broader software package sales. The
so-called "browser wars" between Microsoft and Netscape have
become a high-stakes duel.
Three years ago, Netscape pioneered the commercial market
for Web browsers, which enable Internet users to surf through
multimedia sites on the World Wide Web, making it the fastest
growing software company to date.
The emergence of the Internet and Netscape's rapid success
with its Netscape Navigator browser were widely viewed as the
most serious threat in years to Microsoft's dominance of the
personal computer software market.
But over the past two years, Microsoft has fought back,
redirecting its efforts towards the Internet, steadily improving
its own Internet Explorer browser and pledging to offer it free
of charge while bundling it with the Microsoft Windows operating
system used on nine out of 10 new PCs.
Microsoft's aggressive promotion of its own Internet
software has sparked an intensified investigation by the U.S.
Department of Justice. Last month, the department brought suit
against Microsoft, claiming it had breached conditions of a 1995
agreement meant to foster competition, by forcing PC
manufacturers to install the browser on the main display of all
new computers.
Microsoft, whose executives have dismissed the government's
latest charges as lacking merit and have repeatedly denied any
illegal behaviour, last week filed its response to the
government case, charging that the government is "taking sides"
to prevent it from improving consumer products.
The lawsuit has prompted a heated debate over the power and
aggressive tactics of the world's most successful software
company, which has made its co-founder and CEO, Bill Gates, the
world's richest man.
In addition to the lawsuit, the debate has extended to
Congressional hearings and a conference in Washington, D.C.,
called last week by consumer advocate Ralph Nader.
Gates, himself, strongly defended the company's actions in
remarks to Microsoft's annual shareholders meeting Friday in
Seattle, Wash.
Dataquest's Hale said that the important battle to watch now
between Microsoft and Netscape was over upcoming versions of the
products. Microsoft's Internet Explorer (IE) 4, released six
weeks ago, has received favourable reviews and Hale said a key
question was whether Netscape users will switch, keep using
Navigator, or use both.
Allen Weiner, director of the Dataquest Internet group,
noted that Netscape, over the last year, has focused on building
its business within large enterprises, while Microsoft had
"aggressively expanded its consumer business through both a free
browser and bundling agreements with consumer-focused Internet
service providers."
"As Microsoft dove headfirst into that void, Netscape has
begun to face the fact that it must single-handedly, or in
partnership, target more of the user environment, including the
user's home and point of purchase," Weiner said.
The survey is based on data reflecting a seven-day period at
the end of each quarter, using roughly 60 million daily query
points in data supplied by Digital Equipment Corp.'s
Alta Vista search engine group.
-- Sam Perry, Palo Alto newsroom 650-846 5400
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