> "We have more than 30,000 sites that are best viewed with
> Navigator," said Mike Homer, Netscape's vice president
> for marketing. He also said that Navigator offered more
> than $200 in free services.
> automatic and free access to the daily Wall Street Journal
> Interactive edition, which normally costs up to $49 a
> year, and to the popular ESPNet Sport Zone, which usually
> charges for its services a la carte.
August 13, 1996
Microsoft Moves to Enhance Its Web Package
By JOHN MARKOFF
SAN FRANCISCO -- Raising the competitive stakes to a rich new level in its
World Wide Web "browser" war with the Netscape Communications Corp., the
Microsoft Corp. announced deals late on Monday providing for two of the
Internet's most popular financial news and sports services to be bundled free
into a new version of Microsoft's browsing software.
Even though Netscape's Web browser, Netscape Navigator, is used by more than
85 percent of computer users for viewing information on the World Wide Web,
Microsoft is aiming to make its Internet Explorer software the market leader.
Monday's deals and Microsoft's $7 billion in cash on hand -- which generate
more in interest than Netscape has in annual revenues -- demonstrate just how
formidable a competitor the world's largest software company can be.
Also, Monday's developments are an attempt by Microsoft to take Web-browser
software beyond a navigational tool by building in some popular destinations.
The new software, Internet Explorer Version 3.0, which Microsoft planned to
begin distributing free on the Internet at midnight on Monday, will give users
automatic and free access to the daily Wall Street Journal Interactive
edition, which normally costs up to $49 a year, and to the popular ESPNet
Sport Zone, which usually charges for its services a la carte. "In some sense
this is a volume deal," said Brad Chase, the Microsoft vice president in
charge of Internet browsers. "We feel very excited about this giving us a
better browser."
The new services, along with several similar packages also announced late on
Monday, puts added pressure on Netscape, which intends to introduce a new
version of its Navigator browser next Monday.
"The operative word in the Microsoft Internet strategy is 'free,"' said
George Colony, president of Forrester Research Inc., a consulting firm in
Cambridge, Mass. "Microsoft is slashing and burning their way into this
market."
Web site publishers have from the beginning seen such deals as an additional
source of revenue, to complement advertising and circulation.
"The software producers are now to some degree acting like on-line services,"
said Tom Baker, the business director of The Wall Street Journal Interactive
edition.
Under The Journal deal, Internet Explorer customers will get the Journal
Interactive edition free through the end of the year. The Journal site, which
has more than 40,000 subscribers, only began this month to charge new
subscribers.
Executives at Dow Jones & Co., which owns The Journal, would not disclose how
much Microsoft is paying to offer the service.
Baker said the deal lasts five months but could be extended.
In addition to the deals with The Journal and ESPNet, Microsoft has made
agreements with operators of five other Web sites that Explorer users will be
able to use free: Hollywood Online, a source for movie information; Investors'
Edge, which publishes recommendations from financial analysts; MTV Online;
Riddler.com, an Internet game site, and Microwarehouse, a catalogue shopping
site.
In signing the deals Microsoft is pursuing a new avenue of attack on
Netscape, a tactic that several analysts said was reminiscent of the strategy
Microsoft used more than a decade ago in its effort to dominate PC software
operating systems. That strategy involved adding more and more features to its
basic MS-DOS and, later, Windows software.
"This ushers in a new era of content competition," said David Smith, an
industry analyst at the Gartner Group in Stamford, Conn. "If you look at how
Microsoft built their franchise in operating systems, it was by adding
applications and locking people in. Now content is the application of the
Internet."
To date in the Web-browser war, Microsoft and Netscape have battled over
technology features, with each racing to be first with better ways for viewing
information. In recent months, however, word has begun to trickle through the
Internet community that Microsoft has been trying to buy market share by
purchasing the allegiance of Web site operators with software-development
support and deals like those on Monday.
So far, both Netscape and Microsoft basically give away the versions of their
browsers used by individuals. Netscape draws much of its revenues from the
so-called server versions of Navigator used on computers that play host to Web
sites or give users access to the Web.
But so far, Microsoft has been giving away the server software, too, relying
on its vast wealth to wage a war of attrition.
Netscape responded to the Microsoft initiative on Monday by making over the
company's home page with point-by-point performance comparisons that Netscape
said showed that Navigator remains faster than the Microsoft offering and
requires less disk space and processing power.
Netscape's executives said that despite Microsoft's highly visible deals, the
company still trails Netscape in a variety of ways.
"We have more than 30,000 sites that are best viewed with Navigator," said
Mike Homer, Netscape's vice president for marketing. He also said that
Navigator offered more than $200 in free services.
Moreover, Homer said that Netscape is preparing to put Microsoft in catch-up
mode once again next Monday, when Netscape plans to release version 3.0 of
Navigator. The new product will include a feature called Internet Mailbox that
will permit service providers to mail complete multimedia mail messages --
including text, sound, images and video -- to other computer users.