Netscape Nicoise?
For Web developers, Microsoft's competition with rival Netscape is probably the best example of its technology market strategy in recent memory. Even though Microsoft bundled the first version of Internet Explorer with Windows, Navigator's technical superiority allowed it to dominate the lion's share of the market, overshadowing such early entrants as Quarterdeck and Spyglass. But, by the launch of its Internet Explorer version 3.0, Microsoft had matched many of Netscape's browser features, allowing many Web developers to display the IE logo alongside that of Netscape's. Next year, however, Netscape will face its greatest challenge as PC makers bundle its com petitor's browser with Windows 98. Understandably, Netscape has responded with a standards-based, cross-platform alternative in Netcaster and a range of technology improvements, most recently its meta-content definition format, RDF.
On the server side, Netscape enjoys a comfortable lead ... for the time being. Nearly 60 percent of the top 50 ad-supported Web sites use a Netscape Web server, which can at least be attributed to the scalability of the underlying technology. For the foresee able future, Microsoft's insistence on a Windows NT server strategy will keep it out of the upper echelon of Web sites central to proving its ser:ver muscle in the real world. Long-term, Microsoft will cultivate its own turf by adding more Unix features, such as clustering, to Windows NT.
Munching on Media
Leveraging its experience in developing successful interactive CD-ROMs, such as Encarta, and transactional applications, such as Money, Microsoft has been attempting to diversify its revenues by dabbling in media. While ventures such as MSN and MSNBC have met with a lukewarm recep tion, the software giant could be looking for more than faster cable modem deployment with its $1 billion investment in Comcast, the nation's fourth largest cable provider. The Comcast
announcement came just two months after the traditional PC bigot coughed up $425 million for WebTV Networks. Such investments may ultimately help to provide a clear passage for Microsoft properties, such as Sidewalk and Expedia.
Despite Microsoft's newcomer status to the realm of traditional media, its desire to develop its own content offerings has changed the rules for stalwarts of other industries, proving itself the master of"coopetition." While media giants such as Time Warner and Disney have yet to confront the new comer to content, America Online (AOL) has managed to prosper in the face of compe tition from the Microsoft Network, which many predicted would easily crush it. Indeed, the largest consumer online service's recent acquisition of CompuServe's flagship service will help it to compete more effectively internationally, where MSN has been especially threatening.
Eat or Be Eaten
The extent to which Microsoft can leverage its desktop domination and huge cash reserve can make for an uneven playing field. Rare is the Intuit, the AOL, and, for now, the Netscape that flourishes in Microsoft's crosshairs. Antitrust lawyers have proven to be a feeble foil. But Microsoft's Internet activity is not without its industry benefits. There's nothing like 90 percent market share and the distribution channel of virtually every PC manufacturer to drive de facto standards. The issues Microsoft raises regarding technologies such as Java, despite their ignoble motivations, help drive developer discussion and competitive improvements (• page 16). Even the spectre of Microsoft entering a market keeps institutions and start-ups alike honest. As long as Microsoft can dish it out, its competitors will have their plates full.
