Washington, DC, April 12, 2005 --  

When the Department of Justice was preparing to file an antitrust suit against Microsoft seven years ago, the world was a different place. The Dot Com boom was entering full swing in early 1998, and Netscape Communications, the company that introduced most people to the web browser was in big trouble. Microsoft's decision to bundle their Internet Explorer Web Browser with its ubiquitous operating system had destroyed any chance Netscape had to profit from its flagship product, and threatened to give Microsoft total control of the Internet.

Fortunately, the world didn't work out the way many had feared, no thanks to the Justice Department, whose anti-trust suit failed to produce any meaningful sanctions against Microsoft when settled in 2002.

To be sure, there were some early reasons to worry about Microsoft and the Internet. Netscape Communications quickly ceased to exist, and Microsoft began to dominate the market for web browsers as it earlier had dominated the market for word processors and other desktop applications. But the doomsday forecasts of Microsoft's control of the Internet simply never came to pass. After an initial period of success, Microsoft is losing market share with critical Internet products and services.

Microsoft's web server -- a product that serves pages viewed over the Internet -- never gained widespread success compared with established rivals running on the Linux and Unix operating systems. Its technology for building web applications, Microsoft .NET, was never able to effectively compete with Sun Microsystems' Java as the world's preferred platform. Its MSN search engine has utterly failed to compete with rivals Google and Yahoo.

Just this month, Microsoft's Internet Explorer web browser -- the very product that sparked panic about Microsoft's dominance -- sank to just under two thirds market share, as measured by an online tracking organization.¹ While two thirds may seem like a large amount, the drop is staggering considering that just three years ago, Microsoft Internet Explorer had surpassed 90 percent market share in many surveys. Considering that Microsoft's Windows operating system continues to dominate, this means that nearly a third of all web surfing is done by people who have gone out of their way to reject the pre-installed Microsoft web browser, and seek out an alternative.

There is no mystery about what has motivated people to turn away from Internet Explorer. Its problem is security. What started as a sensationalized panic about the browser's security holes that allowed strangers to wreak havoc on people's computers, quickly became a painful reality. The old problem of email viruses became mild by comparison to the trouble caused by a new kind of infection. These "spyware," "adware" and browser hijack infections turned innocent people's computers into platforms for delivering spam, pop-up ads and capturing sensitive financial information.

And while security holes in Internet Explorer are not to blame for all security breaches faced by consumers, Microsoft's web browser is to blame for far more than its share. So bad is the problem caused by these security holes that it has created a new type of application called Anti-Spyware, aimed at removing the problematic software. The two leading products have been downloaded over 175 million times.² Outrageously, Microsoft -- the very company that brought on the problem -- has entered this market with its new Microsoft Ani-Spyware product, which was recently released in beta form.

While it's easy to point the blame at Microsoft for shipping products with shoddy security, the reality has much more to do with Microsoft's success. Hackers targeted Microsoft's Internet Explorer because they knew (at one time at least) that 90 percent of people were using it. Nobody targets the Opera Web Browser because only a tiny fraction of people use it.

Microsoft's success has therefore come back to haunt them. Microsoft achieved dominance in the 1990s because of the "network effect." Users chose the Windows operating system and the Microsoft Word processing program not because of their superiority, but because they knew they would be able to easily exchange data with the large number of other people who had those same programs. Today, it is this same network effect that is hurting Microsoft. People are rejecting its Internet Explorer web browser, because they know that it is the biggest target for hackers.

That nobody foresaw this result back during the panic about Microsoft's dominance back in the late 1990s is no surprise. Technology, driven by innovation, rarely follows a straight path. Those who continue to worry about Microsoft's should rest assured that the software giant's reign will not last forever.

Notes:

1. W3Schools.com, Browser Statistics Month By Month, April 12, 2005.

2. Download.com, Total downloads for Ad-Aware and Spybot Search and Destory, April 12, 2005