The Browser Wars: 30 Years Later, the Story Feels Familiar
Who remembers the browser wars?
Thirty years ago this month, on 13 August 1996, Microsoft released Internet Explorer 3.0.
In Australia in 1996, the internet was still a relatively unusual thing to have at home. For those of us who were online, that usually meant dial-up and the battle for the home phone line. The Australian Bureau of Statistics would later report that only around 300,000 of an estimated four million Australian home computer users accessed the internet during 1996.
The soundtrack was pretty good though. I was listening to Spiderbait, Powderfinger, The Prodigy, Beck and Tori Amos. The Doc Martens live on, although the hair, now long once again, is a somewhat different shade these days.
And if you used the World Wide Web, there was a very good chance your web browser was Netscape Navigator.
Netscape was one of the defining technology companies of the early web. Its browser had achieved extraordinary adoption in a remarkably short period of time. A year earlier, Netscape's spectacular stock market debut had helped ignite enthusiasm for a new generation of internet companies.
A familiar technology hype cycle was taking shape: rapid adoption, enormous expectations, soaring valuations and a growing belief that the rules of business had somehow changed.
For a while, Netscape looked like it might be one of the companies shaping the future of computing. That period was later dramatised in the 2019 National Geographic series Valley of the Boom, which tells part of the story of Netscape's rise and its increasingly bitter browser war with Microsoft. It mixes documentary with dramatisation and takes a few liberties, but it is an entertaining look back at the period.
The first two versions of Internet Explorer had done little to trouble Netscape’s dominance. IE3 was different. It was the first Microsoft browser that seriously approached Navigator in features and quality.
At the beginning of 1996, estimates later cited in the US Microsoft antitrust case put Netscape's browser usage share above 80 per cent, with Internet Explorer at around 5 per cent. It was an extraordinary lead, but the contest was becoming about much more than which company had the better browser.
Microsoft understood the threat Netscape posed, and it had one advantage Netscape could never match: Windows, the dominant operating system on desktop PCs.
Microsoft feared the browser could become much more than a way to view websites. If developers increasingly built applications to run through the browser rather than directly on Windows, the operating system underneath could become less important. Netscape therefore represented a potential threat to Microsoft's position at the centre of personal computing.
Windows also gave Microsoft an enormous distribution advantage. It could put Internet Explorer directly in front of Windows users and license it free through other important channels.
That posed a very different problem for Netscape. Its own financial filing from the period shows that client software still accounted for around 60 per cent of its revenue, with growth driven primarily by sales of Netscape Navigator. Microsoft, by contrast, could fund the browser fight from the enormous revenues generated elsewhere in its business.
The effect was rapid. US court findings later recorded Netscape's share falling from above 80 per cent in January 1996 to around 55 per cent by November 1997, while Internet Explorer rose from roughly 5 per cent to 36 per cent over the same period.
How Microsoft achieved that growth would eventually become the subject of a landmark technology antitrust case. The court examined Microsoft's relationships with PC manufacturers and internet access providers, its bundling of Internet Explorer with Windows, and the restrictions and incentives it used to increase distribution.
Internet Explorer was not winning on distribution alone. Microsoft invested heavily in making it competitive, but the court also found that product improvement alone could not explain how quickly it gained ground.
At the same time, the internet was becoming serious business. Money poured into internet companies. New businesses appeared almost daily, existing companies scrambled to come up with an "internet strategy", and valuations kept climbing. The belief that a new economy had arrived was hard to miss.
Then the dot-com bubble burst.
Technology shares fell sharply and many internet companies disappeared. By mid-2001, the US Federal Reserve noted that internet stocks were around 70 per cent below their peaks.
The internet, of course, kept going.
It went on changing how we communicated, bought and sold things, and worked. Before long, calling something an "internet business" started to sound a bit redundant.
Netscape did not become the enduring giant many expected. In 1998, it released the source code for its browser suite, which helped give rise to the Mozilla project and eventually Firefox.
Today, neither browser dominates the web. In 1996, Netscape looked very hard to dislodge. A few years later, Internet Explorer looked much the same.
Neither position lasted.
Thirty years ago today, on 13 August 1996, Internet Explorer 3.0 entered a browser market dominated by Netscape. Few would have guessed how quickly that balance would change.
And somewhere in the background, I can still hear the sound of a 28.8k modem connecting.
Sources and further reading
United States Department of Justice, U.S. v. Microsoft: Court's Findings of Fact.
Australian Bureau of Statistics, Household Use of Information Technology, Australia, 1996.
Netscape Communications Corporation, Form 10-Q for the quarter ended 30 June 1996, filed with the US Securities and Exchange Commission on 14 August 1996.
Computer History Museum, Browser Wars and material on Netscape and the early web.
National Geographic, Valley of the Boom (2019).
Federal Reserve, Laurence H. Meyer, What Happened to the New Economy?, 6 June 2001.
Mozilla, History of the Mozilla Project.