Get ready for a bruising browser battle.
Microsoft Corp. is offering its Internet Explorer World Wide Web browser free--and readying a marketing campaign--in a determined, better-late-than-never effort to grow its Internet business.
Netscape Communications Corp., which controls three-fourths of the browser market and generated 57% of revenues from sales of its Netscape Navigator browser in the last quarter, vows it will stick by the business strategy that has arguably made it the Internet's hottest property.
One unknown is how the Justice Department will react to Microsoft's browser ambitions. Antitrust regulators are looking into whether the bundling of Microsoft Network software with Windows 95 gives Microsoft an unfair advantage. Explorer, also included in Windows 95, now could get closer scrutiny.
Netscape's ability to maintain its early lead in a market that's just beginning to take shape is uncertain.
Veteran software watcher Rob Enderle, an analyst with Giga Information Group in Santa Clara, Calif., believes Microsoft will displace Netscape as the No. 1 browser supplier in the next year.
"I just can't see how Netscape's going to be able to match them," he said, noting Microsoft's intense campaign to focus its products and services on the Internet.
Netscape's browser can be downloaded free off the Internet, but consumers and businesses are supposed to pay Netscape a fee--$39 for individuals, or $20 a year for each corporate PC user--if they decide to continue using the product. Many people don't, though Netscape VP-Marketing Mike Homer says most business customers willingly pay for support and product upgrades.
But Microsoft Chairman Bill Gates, in his bold attempt to include Internet features in virtually all products and services, conceivably could turn browsers into an almost zero revenue business.
"Here's the deal: Our browser's free," Mr. Gates told about 200 journalists and analysts at a meeting in Seattle staged in response to criticism that Microsoft was slow to realize the impact of the Internet.
The browser market is becoming a two-horse race. One sign: CompuServe, which owns its own browser and is a rival to Microsoft in online services, last week agreed to license Microsoft Explorer for its customers.
Last year, Netscape took the lead in Internet browsers overnight, creating the first major branded product for what had been a market of mostly free, lookalike browsers.
Microsoft's Explorer browser officially arrived Aug. 24 with Windows 95.
"We have a very low browser market share today. Call it zero," Mr. Gates said. But Microsoft last week said it will introduce versions of its browser for the huge base of Windows 3.1 users, for the emerging Windows NT high-end market and for the Apple Macintosh next year.
In a not-too-subtle charge to his lieutenants, Mr. Gates has vowed to closely monitor Microsoft's browser share growth.
Browsers aren't much of a business--especially if the product is being given away. But both Microsoft and Netscape use browsers as the hook for a range of profitable Internet-related products and services. Netscape sells Internet development tools and ads on its popular Web site; Microsoft has or is adding Internet features for its market-leading operating systems and Microsoft Office application software and for Microsoft Network.
Netscape in late summer began its first major print campaign in computer publications for Navigator and also promotes the product extensively on the Web; Dahlin Smith White, Salt Lake City, is the agency.
Mr. Homer, noting Goldman Sachs' prediction that Netscape revenues will more than double to $133 million next year, said that should allow Netscape to double its marketing budget.
Microsoft last week began advertising Explorer on popular Web sites and in early 1996 will start print ads; Anderson & Lembke, San Francisco, handles.
Copyright December 1995 Crain Communications Inc.