IE 7 Sparks Talk Of Browser Wars

In announcing that the company would begin beta testing IE 7.0 in early summer, Microsoft chairman and chief software architect Bill Gates told attendees at the RSA Conference in San Francisco Tuesday that the upgrade would include additional defenses against phishing scams, worms, viruses and spyware, but did not give any details on new capabilities.

Security concerns have been a major impetus for consumers to switch from IE to alternative browsers, with the Mozilla Foundation's open-source Firefox benefiting the most. As of January, IE market share had fallen to 92.7 percent, while Firefox's share had risen to 4.8 percent, according to JupiterResearch, a division of Jupitermedia Corp. Other browsers, such as Netscape and Opera, accounted for the rest.

But JupiterResearch analyst Joe Wilcox believes Microsoft is also concerned with reports that rivals Google Inc. and Yahoo Inc. may be preparing to launch their own branded browsers. Ask Jeeves Inc., a smaller competitor in the search-engine market, has said it is in discussions with Mozilla about launching its own browser based on open-source Firefox.

Microsoft's MSN entertainment portal competes with Google, Yahoo and Ask Jeeves in the lucrative market of Internet search. Advertisers are expected to spend $13.8 billion online in 2007, with paid search forecast to grow 30 percent compounded annually from now until then, according to JupiterResearch. Paid search are sponsored links that are listed separately from general search results.

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"The big money is in paid search, and each of these search engines are vying for the queries that lead to search dollars," Wilcox said.

Consumers that adopt a search engine's browser would be more likely to use its services to find products or information on the web, which means higher delivery rates for sponsored links, Wilcox said.

Not all experts agree, however. Gary Price of points out that all the major search engines distribute free toolbars for IE that point to their services. He believes security was a major reason for deciding not to wait until next year to ship an IE upgrade with the next version of Windows.

"One reason is certainly the security issue," Price said. "The longer they wait, the more market share they could lose."

Nevertheless, there are signs that a browser war is imminent. America Online Inc., which competes with Google, Yahoo and MSN, started beta testing a standalone browser this month. Ask Jeeves is "brainstorming" with developers in the Mozilla Foundation about building its own branded browser on top of Firefox, Daniel Read, vice president of product management for Ask Jeeves, said.

"We're in discussions with them at the moment, but there are no firm plans right now," Read said.

Google, on the other hand, hasn't announced any plans for releasing a browser, but the market leader has hired Firefox's lead engineer Ben Goodger and Mozilla developer Darin Fisher, who ran the cookies and permissions part of the non-profit's browser development efforts. Yahoo also hasn't announced plans for releasing a browser.