Give Microsoft more credit than that. It was not a matter of immediate profit - even back then they were worried that the browser would become the default operating system, and so losing control of the browser would make Windows irrelevant. Which has happened, it just took a while.
This thread just reminded me of something. Would you believe that WordPerfect is still around? They have an office suite which, according to their Wikipedia page, contains what sound like knockoff versions of Excel, PowerPoint, and other programs.
Quattro Pro has been around since 1987, and is well-regarded.
My office still uses it (v13). For our purposes, it’s far better than Word.
I think what you’re getting at is user interface, not operating system. There’s a huge difference between the two. Even at that, the browser isn’t the user interface on anything I know of; it’s just the most commonly used application. And graphical user interfaces don’t have to be so tightly integrated with the OS; look at GNOME for Linux, or any of the proprietary Android UIs like TouchWiz.
Ultimately at the time, integrating the two was hugely anti-competitive, as it set up the browser market choice as “Pay $49 per desktop for Netscape, or use the already-installed IE3/4/5 for free?”
You can guess which one most commercial IT departments went with, and every graph of market share over time reflects that.
The browser war was more of the same predatory Microsoft behavior of trying to claim that various outside apps and features are “integral” to the operating system, and thereby crush their rivals, that they’d done all along.
Microsoft has roughly the same market share in deployed PC operating systems today (about 90%) as they did in the mid-1990s (also about 90%). Microsoft’s internet browser is bundled with every copy of Windows just like it was in the 1990s. The OP’s confusion is justified, since it appears nothing has changed regarding PC market share or bundling an internet browser with Windows.
It is true the broadly-defined computing marketplace seems more diverse – now there are mobile devices. It may seem that somehow the PC segment is less dominate. However the reality is total revenue from PC market segment today is still greater than total revenue from all smartphones – about $297 billion vs about $260 billion.
In the 1990s, total revenue from the PC market was proportionately much smaller than the total revenue from (say) mainframes. The fact that PCs were visible, consumer-facing items did not change the overall market share picture.
It all depends on how you slice and dice the marketplace. At various points in the 1990s, different companies had monopoly or near-monopoly positions in different segments of the diverse computing marketplace.
E.g, IBM had at least 80% market share in mainframes, which dwarfed total PC dollar sales. Novell had over 70% market share in PC networks, described as “near monopolistic”: Novell - Wikipedia. Cisco had at least 80% market share in routers. All of these companies tried to use their dominate positions to expand into other markets.
Today Intel has over 98% market share in x86 servers: http://www.eweek.com/servers/amd-aims-to-reinvigorate-x86-server-business.html
Depending on your perspective, it can be questionable that the DOJ involvement with Microsoft had a major impact on the changing competitive landscape.
This paper “Microsoft’s Monopoly” by Gregory Jenkins strongly argues the DOJ action was weak and accomplished nothing to change Microsoft’s dominate position and monopolistic practices: Microsofts Monopoly: Anti-Competitive Behavior, Predatory Tactics, And The Failure Of Governmental Will | Journal of Business & Economics Research (JBER)
Of course the logical question is if that’s the case, why do things seem so different today? Are they different, or were the 1990s a transient phase in the ever-changing competitive landscape?
Re antitrust action, the academic and political views of this change with the decades. E.g, in 1982 the DOJ obtained a recording of the president of American Airlines explicitly proposing a price-fixing scheme with the President of Braniff Airlines. He said raise your fares 20% and I’ll raise mine the next morning – you won’t lose anything. The DOJ charged American with pursuing a monopoly, appealed and I don’t think American was harshly penalized:
Likewise there were multiple antitrust cases brought against IBM, generally without harsh penalties. Some scholars believe it did little good – that the changing competitive marketplace is what reduced IBM’s dominate position, not DOJ action. See “Does Antitrust Policy Improve Consumer Welfare?” (Cradall, Winston, 2003): Does Antitrust Policy Improve Consumer Welfare? Assessing the Evidence - American Economic Association
It appears from this legal precedent until the 1990s, that Microsoft felt their actions were not within historical antitrust enforcement thresholds. However as things happened, this was definitely not the case. There can be changing legal and academic views which essentially re-draw the line of transgression behind where a company is standing. This is obvious by searching on the term “A new era in antitrust”. There have been many new eras over the decades which can suddenly materialize.
Another view to explain this is that antitrust laws might be manipulated by the losing parties to compensate for their inability to perform in a competitive market. This view was discussed in the book “Shakedown: How Corporations, Government, and Trial Lawyers Abuse the Judicial Process”, by Robert Levy:
http://amzn.com/B004XMSZLW
A detailed impartial book about the Microsoft case was “World War 3.0”, by Ken Auletta: http://amzn.com/B000FC1L38
Does the latter figure include tablets, though?
I also have it and think it is a superior product for my purposes to Word. However, I’ve been forced to switch to Word because of client usage.
Actually, I just checked and we are on “X5,” which I presume is version 15. Any documents we generate for client consumption go out in PDF form so we don’t have to worry about that.
I’ve taught operating systems, I’m quite well aware of the difference. Browsers are far more than user interfaces. In those days applications mostly sat on the PC, and, as has been mentioned, if one seemed popular Microsoft could bundle it. Being on the desktop was a massive advantage. A browser could include buttons for lots of stuff sitting on the desktop - if people spent their time in the browser, the competitive application became more convenient than Microsoft’s.
Of course Windows was sitting under it - but since you could get the same browser experience on Linux or Apple or even UNIX, the browser became what looked like the operating system to the user.
So browsers, while not strictly speaking operating systems, could make the actual operating system irrelevant - and that was the threat.
The important thing is not the current market shares but what is trending. PCs are stagnant, while mobile devices are still growing. Cite.
Please note that we’re not talking servers here, we are talking about processors that go into servers. Intel at one point manufactured mother boards, but decided to get out of the business to not compete with their customers. The stuff they made was crap - at one point my company was a customer.
Well that is true since there were no real penalties in the US at least.
In the long run we are dead. In the long run, considering slow legal action and fast technological change, it doesn’t matter. The importance of a pre-installed browser was the high barrier to changing a browser for the average person. Now my 75 year old neighbor has no problem downloading new software.
But the real issue is that Microsoft bet wrong on mobile.
This is a good point. I double-checked the figures and this included tablets with PCs, maybe because of the diminishing functional difference between a “pro” or x86 tablet with optional keyboard vs a netbook. The number is actually $295.7 billion, and it is forecasted not actual: PCs - statistics & facts | Statista
Smartphones were $264.7 billion: Smartphones - Statistics & Facts | Statista
Note the above “PC” revenue does not include x86 servers, which back in the mid-1990s were often lumped in with PCs. Today x86 servers are differentiated from PCs, even though they both may be running Windows. If you added those x86 server sales to the PC annual revenue it would be a lot higher, how much I don’t know. The point is an expanded view of the “PC” market segment encompasses areas and revenue which mostly did not exist in the mid-1990s.
E.g, in 2014 SQL Server alone accounted for $5 billion in annual revenue, more than all of Microsoft made in 1994: Microsoft delivers preview of new Azure cloud service for Internet of Things | ZDNET
That same fiscal year 2014, IBM’s total systems and technology (ie mainframe, server and cloud) hardware sales were only $10 billion.
Depending on how you classify “PCs”, they could constitute a much larger % of total computing revenue than in the mid-1990s when the Microsoft antitrust action started. E.g, exclude smartphones and include some % of server sales and consider today’s mainframe sales are vastly less than in the mid-1990s. From this standpoint the PCs and PC servers today constitute a much larger slice of the “conventional” computing landscape than in the mid-1990s, and Microsoft still has 90% market share in PCs.
Some in the thread seem to think that just the market value of browsers themselves (low-cost or free) was the main issue in that case. It is good to see Acsenray hinting that that was the tip-of-the-iceberg for the full monopolist threat of IExplorer dominance.
I’m not sure this is clear, so I’ll add a bit. Consider how many things that you used to use a separate application for that you can now do in your browser. Email? Gmail. Chat? Facebook. Games? Flash/HTML5/Facebook. Writing papers? Google Docs. Image editing? Multiple online solutions.
I was easily able to move my mom to Linux by simply installing Firefox and moving her profile over. She’s never had to ask me how to do anything–other than the stuff I would do on Windows, too.
(I moved her to Linux so she could have her own computer. I used a USB linux on a machine without a hard drive.)
Sounds great in principle. XKCD offers this advice for better success:
See, easy as clicking a link in an app store. Even my aged MIL can do it. 
Sounds more like Microsoft trying to fit a square peg into a round hole- from a user perspective, there doesn’t have to be a lot of difference between the OS, the GUI and the browser, but functionally, there’s no reason they actually need to be integrated with each other- having the same look and feel would accomplish the same goals just fine while still maintaining interchangeability and independence.
And I think that’s what the suit about all this ultimately came down to.
Not at all. Microsoft just made the IE rendering engine (MSHTML.dll) a system library which any program could call and make use of. Windows Explorer (the shell and file manager) was one of the first. it made sense to do so; if you need your program to layout a view, why not use something meant for rendering layouts? It’s not like it’s automatically the wrong thing to do simply because it’s the way Microsoft chose to do it.
I wasn’t saying that integrating it was a wrong thing to do in a technical sense, but rather saying that it isn’t necessary, and that Microsoft’s claim that it was necessary and that IE/Windows were so integrated that they were one in the same was disingenuous bullshit. As you say, they just had IE take advantage of a system library available in Windows, which isn’t that level of integration that they were making it sound like.
They weren’t worried about what they’d do - they were worried about Netscape capturing the attention of their user base. If people spent 90% of their computer time in a browser - anyone’s browser - what sits on their desktop becomes irrelevant. If Google Docs became as much of a standard as Office, the Office business would suffer both in sales and what could be charged for it.
Remember Encarta? Not too useful when search engines came along.
And yeah, their claims of integration were indeed total bullshit.
I’m just thinking that Word and Excel basically triumphed by virtue of actually slugging it out with their competitors, and without any particular leg up from Microsoft’s monopoly OS position, while the only reason IE was ever really a player in the browser world was because they bundle it in with their OS.
I’m not convinced that Netscape having a massive browser lead did much in the way of hurting Microsoft profits; it was more a recognition that if Netscape got too big, they might be a competitor, so they basically killed their product and the company outright, which is about as anti-competitive as things come.