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The Browser Hordes: Why Microsoft’s Search Engine Box Will Spark the Next Browser War

Written on
May 2, 2006 
Author
Michael H. Sproule  |

2006 will see the launch of a new war over web browsers or, more precisely, a war over a search-engine search box. For the first time, Microsoft will launch a browser, Internet Explorer 7, that incorporates a search box directly into the menu interface. Already, Microsoft, with its own MSN search service, and MSN’s rivals, Google and Yahoo!, have started to stake out positions to vie for control over the new IE7 search box.

Microsoft is making MSN Search the default search service for IE7. Microsoft denies that this default setting is unfair to MSN’s competitors, stating that the search box can be easily redirected by consumers to use other search engines.

Google and Yahoo! though appear to be unhappy with Microsoft’s move. Both have made public statements that appear to be directed against Microsoft’s browser plans. Google has gone so far as to announce that it has spoken recently about the matter with the U.S. Justice Department.

What Microsoft does with Internet Explorer is important, of course, because of Microsoft’s huge share of the browser market — variously estimated at around 80% to 85%. But, by itself, browser market share has no real value. The value is in the browser as gateway. With a keyword search-generated advertising market of, according to the Interactive Advertising Bureau, over $5 billion for 2005, and growing, on the other side of the search box gate, it’s not surprising to see Microsoft jockeying for advantage. But so are its rivals.

In the fight over advertising revenues, the real fight, the numbers are a bit unusual. Suddenly, Microsoft isn’t in its normal position of unassailable dominance. In fact, with, according to comScore, a March 2006 search engine market share of only 13.2%, third place to Google’s 42.7% and Yahoo!’s 28.0%, Microsoft’s MSN looks almost sad.

With real money at stake this time, the new browser wars undoubtedly will be fought on all fronts — legal, technical and marketing. Despite Google’s early salvos concerning antitrust, the courts may not be the primary theater this time around. Google and it’s allies are sure to have learned from the ultimate failure of Netscape’s campaign, that victory in court, because it can take so long and be so ultimately indecisive, can be truly Phyrric. The new browser war is likely to be most fought by other means.

The technical field too shapes up to be interesting. Google and Yahoo! may be able to make it easier for its customers to replace MSN as IE7′s default search engine. Or maybe Google, as is so often rumored, may actually launch a rival web browser. But the technical battle too is likely to be a sideshow.

The real battle will be in the market, with at least three players, Microsoft, Google and Yahoo!, having the resources to put up serious fights. We can expect aggressive marketing campaigns both on and off the Net. With many web browsers loaded on new PCs by their manufacturers who can themselves change the default search engine on machines they ship, we can expect major bidding for the right to be Dell’s or Hewlett-Packard’s featured search engine. Search engine advertising rates almost certainly will be affected too, with fluctuating search engine market shares likely driving down rates.

The new browser war is good news for consumers and for advertisers. A vigorous contest should lead to increased innovation, increased choice and lowered prices. May the war be protracted and bloody. Let’s just hope nobody wins.





Michael H. Sproule, a partner with the New York law firm of Akabas & Sproule, focuses his practice on intellectual property (particularly licensing, trademark and copyright practice) and corporate law. His experience includes work with both traditional and new economy clients in fields such as technology, the Internet, media and entertainment. A software programmer himself, Mike is interested in all aspects of technology and its impact on law and our society.

Reader Comments.

Google is getting arrogant.
Firefox has Google as is default search engine and now Google is going crying to the Justice Dept over Microsoft breaking anti-trust laws!
As you have rightly said:
“A vigorous contest should lead to increased innovation, increased choice and lowered prices. May the war be protracted and bloody. Let’s just hope nobody wins.”

Posted by newnimproved | 3:05 pm on May 2, 2006.

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