The Revival of Mozilla in the Browser War A gainst
Internet Explorer
Tongsen Wang
Lei Wu
Zhangxi Lin
Research Center for Next Generation
Internet
Fujian University of Technology,
China
Phone: +86-591-8360-6081
College of Communications and
Information
The University of Tennessee at
Knoxville, USA
Phone: +1-806-441-1097
College of Business Administration
Texas Tech University
Lubbock, TX 79409-2101, USA
Phone: +1-806-742-1926
[email protected]
[email protected]
ABSTRACT
[email protected]
statistics in 2002, by network analysis company OneStat.com,
revealed that the most popular web browser was Microsoft
Internet Explorer, which occupied 95.4% of the global market
share, while Netscape Navigator only trails 2.5%.
The competition between Internet Explorer and Netscape has
been one of the famous issues in the IT world regarding the
phenomenon of market dynamics in the information age.
Previous investigation indicates that IE and Netscape mainly
competed in browser’s functionalities and performances. The
vertical integration strategy brought about Microsoft’s success
in the first round of the browser war. Today, the revival of
Mozilla by Firefox shows that the vertical externality is a twoedge sword that can have negative effects on IE when security
becomes a more outstanding issue. In addition, the open source
nature of Firefox becomes one of its critical success factors.
Based on this, we can expect that the monopoly of Microsoft
can be downplayed by the adoption of open source strategy in
the software market.
After Netscape quitted from the battlefield, its successor
Mozilla took over its position in the browser market. In 1998,
Mozilla (http://www.mozilla.org) was born based on Netscape
developers open sourced Navigator. In 2002, Mozilla reached
version 1.0 and had become popular in the open source
community. In fact, Mozilla consists of several projects, and
Firefox is one of them for web browsing. When Mozilla Firefox
was released in 2004, it announced the fight back from
Netscape’s camp against Microsoft IE. In only two days, an
estimated 2.5 million people have downloaded the Firefox. On
April 29, 2005, Firefox passed the 50 million download mark
[1]. In the first quarter of 2005, Internet Explorer's usage share
dropped to around 85% [7], while Firefox usage share has
increased to about 7% and expected to rise to 10% in the near
future [21]. So far, about 10% IBM employees are using
Firefox [10]; Google is adding search engine features to
Firefox [15]; and Oracle is to integrate Mozilla's calendar
application, Sunbird, with its e-mail application, Thunderbird
[13].
Keywords
Browser; Competition; Externalities; Vertical integration;
Compatibility; Open source
1. INTRODUCTION
Web browsers have been playing a key role in electronic
commerce. They bridge hundreds of millions of netters to the
world wide cyber space – If there were no web browsers, there
would have been no e-commerce in the common sense.
Therefore, it is not surprising that the competition among
different browsers has been white-hot in last ten years. In the
battlefield of browser war, Microsoft Internet Explorer has been
the common enemy of Netscape and its successor - Mozilla
Firefox. The story of the competition has profound implications
in economics in the context of information technology [19][20].
Many believed that the fading of Netscape was due to
Microsoft’s bundling strategy – making IE complementary to
Windows operating system. Unlike Netscape, IE was bound
firmly with Microsoft operating system. From the very first
version of IE, it was shipped as one component application with
Windows systems. And since IE 3.0, it could not be uninstalled
from Windows. Just because of their close relationship, their
popularities affect each other. Contrarily, Netscape was
released as a cross-platform software. It was treated as an
independent and licensing software without any bundling
operating systems. In actual fact, this difference is the key
affecting the victory or defeat in the afterward browser
competition. This let IE gain extra competence via the vertical
externality in the economic principle. Finally, Netscape sued
Microsoft for its anti-competitive practices. However,
Microsoft argued that it was legal to add IE’s functionality to
windows to enrich its features and functions, and the hard
competition against Netscape was welfare-enhancing indeed.
Netscape used to dominate the web browser market in mid
1990s. When the first Netscape Navigator was launched in
1994, it monopolized approximately 80% of the market, while
IE’s part was very trivial. From then on, both IE and Netscape
periodically released improved versions. By using bundling
strategy and actively developing component software, IE
rapidly occupied majority share in the browser market. In a few
years, along with Microsoft Windows’ top position in operating
systems, IE’s market share expanded by dozen times. The
Permission to make digital or hard copies of all or part of this work for
personal or classroom use is granted without fee provided that copies are
not made or distributed for profit or commercial advantage and that copies
bear this notice and the full citation on the first page. To copy otherwise, or
republish, to post on servers or to redistribute to lists, requires prior
specific permission and/or a fee.
ICEC’05, August 15–17, 2005, Xi’an, China.
Copyright 2005 ACM 1-59593-112-0/05/08…$5.00.
159
History does not repeat itself in the competition of Firefox and
IE. As Firefox is getting momentum in growth, several issues
rise: Is vertical externality still working for IE? What makes
Firefox’s success? Does the case of Firefox prove the strength
of open source movement [2][14][18]? Will Firefox survive in
the future? Will Microsoft IE be eventually defeated in the
browser war? Since Microsoft’s bundling strategy has made it
in an advantageous position and also a common enemy of
software competitors in a number of products, comparing the
different competition outcomes from cases of Netscape and
Firefox respectively is viable. In this paper we will analyze that
the open source policy is critical for Firefox to survive the
harsh war. As open source movement becomes a trend, the
monopoly power of Microsoft is being suppressed.
HTML, a non-proprietary format of Internet standard, defines
how to publish hypertext on the World Wide Web. Browsers
sticking to HTML would be used extensively and be accepted
by most users. So IE tried its best to design its browser’s
features as close to HTML as possible to be competitive to
Netscape’s functionalities.
As shown in Table 1, from 1995 to 1997, IE and Netscape
competed hard to comply with HTML standard 2.0 and 3.0,
because firms would achieve maximum network externalities
through standardization (in reference to earlier discussion). In
1997, the World Wide Web Consortium (W3C) released HTML
4.0. Netscape Communicator 4.0 did not support several
elements of the new standard, including advanced forms.
However, Microsoft’s IE 4.0 was nearly fully compliant to
HTML 4.0. Another perspective noted that Microsoft was more
active in the W3C standard process than Netscape at that time.
During this period, Microsoft put the first phase of Embrace,
Extend and Extinguish (eee) strategy into practice. From figure
6, we can see that Netscape popularity continuously decreased
after releasing its non-compliant browser version. Until
November 1999, the percentage of total hits of IE was nearly
equivalent to that of Netscape. Simultaneously, Microsoft
introduced Component Object Model (COM) into its Windows
and IE to make IE more attractive, but also violated HTML
standard. From then on, IE’s popularity exceeded Netscape’s
and quickly commanded browser market. Adding these
proprietary elements made Netscape lag behind IE a great
distance.
The remaining sections are organized as follows: Section 2
introduces some previous related research topics for this
competition, including compatibility, network externality,
vertical integration and IT standard; Section 3 discusses the
reasons that Mozilla Firefox could survive in the browser war;
Section 4 proposes a prediction for the future of IE and Firefox;
Section 5 presents our conclusions.
2. THE
ECONOMICS
OF
THE
COMPETITION
BETWEEN
NETSCAPE
AND
INTERNET
EXPLORER
2.1 Compatibility as a positive network
externality
Network externality is known as the value of goods which
increases as the number of users goes up [11]. There are two
primary sources of the positive network externalities [8]. First,
the positive externalities may be generated directly from the
number of consumers. People tend to purchase a product when
a large number of people are presently using the same product.
The total value of this product will increase a little each time a
person joins the group. Second, more available complementary
components will also enhance the particular product’s value.
This is an indirect effect of the network externalities. IE, as a
built-in application software to Windows systems, greatly
enriches the Windows web functionality. Microsoft just makes
use of IE to indirectly advantage the Windows operating system
to achieve its positive externalities.
Table 1: HTML Version Timeline
Network externality could be implemented through
standardization and compatibility among products [3]. The
scope of a network is dependent on the interoperability among
components. If firms choose to conform to the same standard,
components from different firms can be used interchangeable or
used together [6]. Therefore, the sum of the number of users
from different firms will increase. Contrarily, if there is no
uniform standard or firms do not follow one standard, each firm
will have its own fixed network and thus be unable to enlarge
its bound.
Time
Version
1992
First version of HTML
1995
HTML 2.0
1996
1997
1999
HTML 3.2 (HTML 3.0 was superseded by
HTML 3.2)
HTML 4.0 (HTML 3.2 was superseded by
HTML 4.0)
HTML 4.01 (HTML 4.0 was superseded by
HTML 4.01)
However, the competition among the firms that manufacture
similar products through adopting the same standard will be
intensified. This is a paradoxical situation. How to choose the
extent of compatibility is hard for firms to decide. Hence, some
firms may choose to be partially compatible with standard by
adding some of their own specialties. Sometimes, a dominant
firm may have the power to drive the standard process [17].
Enterprises, governments or organizations, all expect their own
standards to become international standards via international
authentication process. Hence, in control of standards, they
have better chance to essentially monopolize the product
market in future. For standard competition, it could be divided
into three phases. In the initial ages of competition, enterprises
would actively participate in the process of standard
establishment. They would make their products comply with
standard as much as possible to be competitive in the market.
Gradually, enterprise that takes greater share in the market
would add proprietary tags into its products. Whenever a
product occupies a large part of the market, the market will
adopt its technology standard. Other products that do not
comply with the new standard would be driven out..
Microsoft uses eee strategy towards Internet and other
standards. It was first announced that they would support one
standard like HTML and group employees to work on it. Then
they began to add proprietary tags or extensions to it like
Microsoft ActiveX technology. At last, when Microsoft
controls most of the market share, firms that do not follow the
Microsoft standard can not compete with it and will be driven
out of the business. Figure 1 shows how the browsers, IE and
Netscape, fight back and forth in their versions. The
competition between IE and Netscape in the product feature has
led to the completeness and integrity of the product, which can
be seen from Figure 2.
160
I n te r n e t E x p lo re r v e rsio n s
N e tsc a p e v e rsio n s
1.0 D e c 19 9 4
1.1 A p r 19 9 5
1.0 A u g 19 9 5
2 .0 M a r 19 9 6
2 .0 N o v 19 9 5
3 .0 A u g 19 9 6
3 .0 A u g 19 9 6
4 .0 J u n 19 9 7
4 .0 O c t 19 9 7
4 .5 O c t 19 9 8
5 .0 M a r 19 9 9
5 .5 J u l 2 0 0 0
6 .0 N o v 2 0 0 0
6 .0 O c t 2 0 0 1
?
Figure 1: The competition between IE and Netscape
Windows
browsers java
Explorer 6.0
frames
tables
plug
-ins
font
size
font
color
java
script
style
sheets
gif89
dhtml
IFrames
Table
color XML
X
X
X
X
X
X
X
X
X
X
X
X
Explorer 5.5
X
X
X
X
X
X
X
X
X
X
X
X
X
Explorer 5.0
X
X
X
X
X
X
X
X
X
X
X
X
s
Explorer 4.0
X
X
X
X
X
X
X
X
X
X
X
X
Explorer 3.0
X
X
X
X
X
X
X
X
X
X
X
Explorer 2.0
X
X
X
Explorer 1.0
X
X
X
Netscape 6.1
X
X
X
X
X
X
X
X
X
X
X
X
X
Netscape 6.0
X
X
X
X
X
X
X
X
X
X
X
X
X
Navigator 4.7
X
X
X
X
X
X
X
X
X
X
X
Navigator 4.5
X
X
X
X
X
X
X
X
X
X
X
Navigator 3.0
X
X
X
X
X
X
X
X
Navigator 2.0
X
X
X
X
X
X
s
X
Navigator 1.1
X
X
Key: X – supported; s – sort-of supported
Figure 2: IE and Netscape Features Comparison on Windows
(Source: http://hotwired.lycos.com/webmonkey/reference/browser_chart/)
161
X
products, such as Microsoft Office. In this way, IE can be
called an externality-oriented product.
2.2 Vertical integration of software
Since the room for improving the functionality of a browser is
limited and any idea in feature upgrade can be easily copied by
the rival player, the performance of the browser becomes a
critical factor in winning the competition. Therefore, from the
point of view of the firm, it is imperious to consider producing
all components and adopting vertical integration strategy to
avoid rigorous rivalry in similar product market. Economides [3]
mentioned six non-strategic reasons for a firm to choose
vertical integration. Two reasons referred to products’
performance: one is better coordination among components; the
other is better integrated design. Likewise, vertical integration
could also be applied to the software market. Software firms
would like to develop all component software, with the
software designed to work as a component of a larger
application and to ensure high performance among other
products. In this browser competition, Microsoft successfully
applied vertical integration to improve its software capabilities.
Microsoft developed its own products chain using Windows
operating system as its core product. IE, Office suite software
and .NET web framework are built upon its Windows systems.
With tight integration and optimal exploitation to Windows
systems’ structure and resources, IE performed much better
than Netscape did on Windows. The complementarity among
different Microsoft products sharing some components made
them an integrated package with increased value to users.
Similarly, other Microsoft windows softwares also show the
same advantages compared to other companies’ compatible
software. In turn, Microsoft component software will help
Windows gain more users to dominate operating system market
[5].
Table 2: Loading Time Comparison between IE and
Netscape
Computer
Netscape
IE 5.5
Configurations
4.7
242%
faster
8% faster
(without
(without
Loading blank
java
java
pages without
enabled)
enabled)
256M RAM
any additional
743%
212% faster
Pentium II
plug-ins
faster (with
(with java
300MHz
java
enabled)
600K Cable
enabled)
Modem
Loading
Windows 98
websites
different in
70% faster
7% faster
graphical, text
and script
content
412%
faster
68% faster
(without
(without
Loading blank
java
java
pages without
enabled)
enabled)
128M RAM
any additional
608%
132% faster
Pentium II
plug-ins
faster (with
(with java
256MHz
java
enabled)
56K Analog
enabled)
Modem
Loading
Windows NT
websites
different in
11% faster
14% faster
graphical, text
and script
content
However, Microsoft tends to have anti-competitive practices
through its vertical integration strategy. The leading firm would
have two strategies to disadvantage its rivals. One is to raise the
complementary component cost of its rivals; the other is to
reduce its monopolized product quality when it is been
combined used with its rivals’ other products [3]. In this
browser war, Microsoft bundled IE with its Windows systems
and guarantees higher performance of IE than Netscape on
Windows. This action became one of the allegations when DOJ
accused Microsoft in the Anti-trust Case [4]. Table 2 reveals the
performance comparison of IE and Netscape on Windows. The
data is according to the time of Netscape 6.0 running on
Windows, showing how much faster of Netscape 4.7 and IE 5.5
than Netscape 6.0 on Windows.
2.3 The Externalities
Products
among
(Source:http://cws.internet.com/reviews/netscape-netscape66.html )
Microsoft
Except for its core product Windows systems, Microsoft’s other
software products can be divided into two main categories:
bundling and non-profit component software and independent,
profit software. Microsoft utilizes its non-profit component
software to enrich Windows features; when Windows
dominates the operating system market, it stimulates its other
profit software sales. So, the structure of Microsoft’s products
has been well conceived to take the advantage of vertical
externalities, which are classified as direct vertical externalities
and propagated vertical externalities with regard to the nature
of profit-oriented or externality-oriented. In Figure 3, non-profit
IE has been bundled to Windows and hence reinforces
Windows, which then further reinforces other profit-oriented
Figure 3: Microsoft Software Product Preview
Figure 4 illustrates the positive correlation between the growths
of Window and IE adoption. The data is collected through
totaling up the number of hits of users using IE or Windows
systems when visiting the site. Each point is the percentage of
total hits by visitors using IE or Windows systems.
162
100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Windows XP
Windows 98
Windows 2000
Others
Macintosh
Linux
03
Again, we should mention one thing - there is no UNIX version
IE so far. UNIX users use Netscape. Whereas Windows
occupies almost every part of operating system market, the user
population of Netscape will inevitably decrease. From Figure 5,
it is obvious that Windows’ top position as an operating system
greatly influences users’ choices for browsers and absolutely
ensures its IE’s leading place in the browser section. Finally,
IE’s HTML takes up a dominant position and gradually drove
Netscape out of the browser market, as shown in Figure 6.
Figure 4: IE and Windows Popularity during 1997-2003
(Source: http://www.recyber.com/usage/;
http://www.kines.uiuc.edu/reports/ )
In previous discussions, we mentioned that Microsoft Windows
gained its benefits indirectly from built-in application IE. And
IE dominates the browser market in virtue of Windows power.
This figure obviously shows that both of them present uptrend
through these years. Furthermore, we performed Ordinary Least
Square (OLS) regression using the same set of data. Windows
percentage is the independent variable and IE percentage is the
dependent variable. We obtained the result: y = 0.2171x +
0.7232, with R2 = 0.7272. The regression coefficient 0.2171
indicates IE’s popularity has a positive correlation with
Windows adoption. It demonstrates that Microsoft bundling
plan was successful and brought reciprocal benefit for both of
its products.
100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
/1 9
/1 9
11
11 98
/1 9
9
11 9
/2 0
11 00
/2 0
11 01
/2 0
0
11 2
/2 0
03
Netscape
97
Here’s another important reason accounting for IE’s continual
success. Due to Netscape 6.0’s poor performance, it failed to
win back its users; and eventually caused more users to turn to
IE. However, even when Netscape’s latest browser corrected
these disadvantages, the number of Netscape users did not
increase. Majority of the IE users do not care about the browser
they are using; or in other words, they know little about
computer technology involved in browser. They are
accustomed to and satisfied with the functions that IE offers
and would not like to turn to other browsers. Netscape cannot
compete IE with this group of people. Once Netscape lose them,
it is difficult to get them back.
IE
11
02
/2 0
Figure 5: Platform Usage Stats
(Source: http://www.recyber.com/usage/)
11
01
/2 0
11
00
/2 0
11
99
/2 0
11
98
/1 9
11
/1 9
/1 9
97
Windows Win32s
11
11
Windows ME
Windows NT
IE
windows
Figure 6: IE and Netscape Popularity Trend
(Source: http://www.recyber.com/usage/;
http://www.kines.uiuc.edu/reports/ )
2.4 Some facts
Figure 5 shows the platform usage through January 2004.
Microsoft Windows dominates 97.34% of the operating system
market, while Apple Macintosh holds 1.49%; and Linux only
has 0.51%. Another core product of Microsoft – Microsoft
office suite is dominant in office market as well. Its profitability
is as high as 60%. Together with IE’s prevalence, the data
reflect that Microsoft’s success in many fields of software
market is greatly benefiting from its vertical integration
strategy. Of course, Microsoft did not win in every section of
software market, such as IIS server. Its market share is always
behind Apache and has shrinked to only 22.66% in December
last year. This reflects an interesting issue to analyze in future.
3. THE REVIVAL OF MOZILLA IN
FIREFOX
Some believe that the popularity of Firefox is owing to its new
features that IE does not possess. Compare Firefox with IE,
Table 3 lists the features that Firefox is superior to IE.
163
people beginning to get concerned with the security issue, the
survival probability of Firefox will get increase greatly.
Table 3: Comparison between Mozilla Firefox and IE
Features
Firefox
Internet Explorer
Popup Blocking
Yes
WinXP: with SP2
Tabbed Browsing
Yes
No
Default Download
Folder
Yes
No
Built-in Search
Yes
No
Super DragAndGo
Ext.
No
Mouse Gestures
Ext.
No
Ad Block
Ext.
No
Themes/Skins
Yes. Personalize your
No
taste with other themes!
Extensions
Yes. Customize your
Firefox with hundreds of Yes
extensions!
Boss Key
Add Bookmark Here Ext.
No
No
Security
Cross-Platform?
Free?
(Source:
html)
The third point is that the open source policy is the critical
factor to Firefox’s success [2][12]. Before Netscape exited from
the browser war, it left hope for afterward browsers: opensource. As known, the most superiority of open-source is its
quick update for software. Firefox is such an open-source
project developed by Mozilla Foundation. Patches, fixes,
updates for Firefox may just take a few hours to be posted on
Internet after the error is discovered, whereas Microsoft may
take ten times to fix it [9]. The latest survey conducted by
Computer Economics found that the key advantage of opensource is that it is less dependence on vendors. For example,
IE6 sp2 has more advanced features, but only can be used on
Win XP sp2. People who are satisfied with older version of
Windows are forced to upgrade to latest OS. Figure 7 is the
chart showing the survey result.
Ext. Minimize to Tray
No
(for Windows)
USB Drive-Friendly? Yes. Portable Firefox!
Web Standards
Support
The second point is that Firebox adopts the strategy that IE
could not follow – the simplicity of its design. Firefox's simpler
architecture makes it fundamentally more secure. In fact,
Firefox is not necessarily a more secure implementation of a
browser but it simply has fewer features to attack. Firefox
supports fewer and less complex scripting mechanisms so it is
not as easy to have a powerful and dangerous code inside a
Web page to attack it. Since Firefox is not as tightly integrated
with any particular operating system, there are fewer ways of
which the browser uses operating system-specific features. That
means that there is a less chance for an intruder to use the
browser as an interface to attack the underlying operating
system.
Good
Poor
Excellent. "Safer, faster,
better", "The browser Bad
you can trust!"
Official
builds
for
Windows,
Linux,
Only
for
MacOS
X
and
(What else
contributed builds for
expect?)
Solarix x86, Solarix
Sparc, OS/2 and AIX.
Open Source Software
Windows
do you
You
can
call
it
"freeware" if you like,
but never expect free
Windows.
http://nicnacproject.de/~murj/firefox/comparison.en.
However, as we mentioned earlier, most of the features
provided by Firefox, such as tabbed browsing, can always be
added into each newly released version of IE. Therefore, the
functionality is not the key factor causing Firefox’s success.
From our point of view, there are three critical points that make
Firefox competent enough in the browser war. The first one is
that the vertical integration is a two-edge sword – it helped
Microsoft won the competition with Netscape by the positive
externalities but it also backfired for its negative externalities.
The problem with IE agreed among most expertise is its
security hole. IE monopolizing browser market is greatly
dependent on its binding strategy with Microsoft Windows
operating system. It brings high performance and enriched
features, such as interoperation with some Windows programs
and applications. It is this binding strategy that brings great
hidden trouble as hackers could use IE as an interface to attack
underlying operating system, steal users’ personal information.
On the other hand, Firefox is a cross-platform browser, so it is
independent on any operating system. People get less
possibility to enter into OS through Firefox. Of course, Firefox
sacrifices some interoperability with Windows, but adds more
functions to be competitive with IE. When more and more
Figure 7: The open source software survey outcome
(Source: http://www.computereconomics.com/article.cfm?
id=1043)
Open source could distribute its responsibility and risk among
developers, companies or academic units, not solely on one
company. If the open source project fails earlier in development,
its data, source code could be used for other projects. Consider
earlier Mozilla browser and current Firefox browser as the
example. Moreover, open source gives customer full control
over customization of the project. If we extend the open source
164
from web browser to many other open source projects, we
would find other interesting things. Software economic function
is its essential enabling technology [16]. Not every company
sells software, but everyone needs software to make their work
more efficient. There are two main forms of enabling
technology: differentiating and non-differentiating. Enterprises
always pursue particular, special features which are different
from its competitors to attract customers. This is called
software differentiating, such as email client, communicator.
For software infrastructure such as operating systems, web
servers, the software provides similar functions. For business,
neither Microsoft Windows nor open source project Linux
makes enterprises more competitive. They just differentiate
each other, not anyone else’s business. Companies need to
spend more on differentiating software, but they could invest
less on open source software than Microsoft products to reduce
their cost. Combine this with the data from latest survey, we
know that enterprises will consider more before they choose
either Microsoft or other softwares in the future. This is
favorable for open source software.
4. THE
FUTURE
FIREFOX
OF
competition with Mozilla Firefox because of negative
externalities caused by security concerns. By its open source
nature and simplicity, Firefox will survive in the future but
should not totally beat IE because IE still have enough power to
meet requirements of users that Firefox is less competent of.
The general implications from the browser war to other IT
standard competition is profound. For a long time, people have
been trying to find the way to downplay Microsoft’s monopoly
in software market without undermining the principle of free
competition. The success of Mozilla using the open source
strategy demonstrates the strength of open source movement.
The further research in this project will be focused on the
mathematic model that will better explain the effect of open
source strategy in the competition with Microsoft.
6. REFERENCES
[1] Borland, J. Firefox passes 50 million download mark,
April 29, 2005, last retrieval: May 19, 2005,
http://news.com.com/Firefox+passes+50+million+downlo
ad+mark/2100-1032_3-5690558.html?tag=st.rn
MOZILLA
[2] Dravis, P. Open Source Software: Perspectives for
Development. Report presented in the Information for
Development
Symposium,
Geneva
9-10/12/2003,
http://www.infodev.org/symp2003/publications/OpenSour
ceSoftware.pdf, last retrieval: October 14, 2004.
Everyone is wondering about one issue: Will Firefox survive in
the browser war? Although it is hard to tell in a short time
which browser – IE or Firefox – will be more preferred by users
in the near future, Firefox should survive in the browser war as
long as the open source movement is on going. However, it is
very difficult for Firefox to take more market share to peer with
IE. Microsoft will not wait for IE’s death. It is announced that
IE 7.0 will be bundled with its next operating system Longhorn
and is expected to correct the security issue. We do not expect
completely safe software. As long as IE is bundled with
operating systems, the potential problem does exist. On the
other side, can IE 7.0 be used in old Windows system? Will it
be released a standalone version? As a fact, by far IE 6 sp2 is
only available to Win XP sp2. The answers will determine IE’s
future. And Firefox could use this chance to gain part of the
market.
[3] Economides, N. Competition and Vertical Integration in
the Computing Industry. New York, NY, 1998.
[4] Economides, N. The Microsoft Antitrust Case, discussion
paper, 2001. Last retrieval June 10, 2005:
http://www.stern.nyu.edu/networks/Microsoft_Antitrust.pd
f.
[5] Economides, N. Raising Rivals’ Costs in Complementary
Goods Markets: LEC’s Entering into Long Distance and
Microsoft Bundling Internet Explorer, discussion paper
EC-98-03, Stern School of Business, NY, 1997.
[6] Gandal, N. Competing Compatibility Standards and
Network Externalities in the PC Software Market, Review
of Economics and Statistics, 77, 599-608, 1995
From long-term aspect, as long as Windows monopolization in
OS market does not fall, some IE’s advantages are not
substitutable. Some expertise recommends choosing Firefox for
external access, while reserving IE as inside-the-enterprise use.
Meanwhile, some persons may have different browsers in one
machine, and some others may do not understand the
technologies involved and do not concern the security so much.
Hence, talking about Firefox replacing IE is premature and not
realistic.
[7] Internet Explorer, last retrieval: May 30,2005 http://www.
creotec.com/index.php?page=ebusiness_solution&title=Int
ernet_Explorer#Market_adoption
[8] Katz, M., and Shapiro, C., Network Externalities,
Competition and Compatibility, American Economic
Review, 75 (3), June 1985 pp.424-440.
[9] Krause, J. INTERNET EXPLORERS,
Chicago: Apr 2005. Vol. 91, p. 58-59
5. CONCLUSIONS
ABA Journal.
[10] LaMonica, M. IBM backs Firefox in-house, May 12, 2005,
last retrieval: May 19, 2005, http://news.com.com /IBM
+backs+Firefox+in-house/2100-7344_3-5704750. html
This paper contrasted the different outcomes from the
competition between Netscape and IE and the one between
Mozilla Firefox and IE, and discussed the economics
implications of the browser war. The statistics data were
applied to support previous research conclusion about network
externalities in the browser war. The result is that bundling IE
with Windows operating systems brought enormous returns and
won top position for Microsoft in both browser and operating
system fields. Microsoft fully employs vertical integration to
expand its network externalities of profit-making software.
Though vertical integration is successful in some Microsoft
software market, it has also caused the loss of IE in the
[11] Liebowitz, S. J. and Margolis, S. E. (1998) Network
Externalities (Effects).
[12] Li, M., Lin, Z., and Xia, M. Leveraging the Open Source
Software Movement for Development of China’s Software
Industry. Forthcoming Information Technology and
Industry Development, 2005.
[13] Marson, I. Oracle works quietly with Mozilla, May 13,
2005, last retrieval: May 19, 2005, http://news.com.com/
165
Oracle+works+quietly+with+Mozilla/2100-7344_35706116.html
[18] Schmidt, K. M., and Schnitzer, M. Public Subsidies for
Open Source? Some Economic Policy Issues of the
Software Market, (November 2002).
[14] Mustonen, M. Copyleft – The Economics of Linux and
Other Open Source Software. Information Economics and
Policy 15 (2003) 99-121
[19] Sebenius, J. K. Negotiating Lessons from the Browser
Wars. MIT Sloan Management Review. Summer2002, Vol.
43 Issue 4, 43-50.
[15] Olsen, S. Google stars in Firefox's new browser.
November 11, 2004, last retrieval: May 19, 2005,
http://news.com.com/Google+stars+in+Firefoxs+new+bro
wser/2100-1032_3-5449172.html?tag=nl
[20] Succi, G., Predonzani, P., Valerio, A. and Vernazza, P.
Representing Compatibility and Standards: a Case Study
on Web Browsers, ACM Standard View, 6(2),1998.
[16] Perens, B. The emerging economic paradigm of open
source, Feb. 26, 2005, http://perens.com/Articles/
Economic.html
[21] WebSiteStory, Firefox's Market Share Nears 7 Percent.
Last retrieval May 16, 2005: http://www.websidestory.
com/ services-solutions/datainsights/spotlight.html
[17] Perrot, A. Compatibility, Networks, and Competition: A
Review of Recent Advances, Transportation Sciences, Vol.
27, No. 2, 1993
166