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War of the Browsers Resumes With More Players This Autumn

By SAUL HANSELL

Are we heading into Browser War II?

It has been several years since Microsoft and Netscape constantly added new features to their Web browser software, each hoping to win more users.

This fall, the market will be filled with talk of new software that not only includes a way to view Web pages but adds features meant to make browsing more fun, more useful and less annoying.

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The flourishes, in various combinations, include blocking spam or pop-up ads; playing Internet radio stations and video clips and improving e-mail and instant messaging systems.

But what is different about this war is that these new enhanced browsers are not being given away free — they are included as part of the Internet service provided by America Online, Yahoo and Microsoft's MSN.

America Online, of course, has written its own software since before the Web was created. And it has made an autumn tradition of introducing a new version, as it is doing again this year. But until now, the software created by most other Internet service providers was little other than Microsoft's Internet Explorer Browser, modified slightly to include their logos and links to some of their Web pages.

Neither software features nor content has been the primary driver of success in the Internet business so far. AOL won the biggest market share because of its reputation for being easy to use and its vibrant community of members who use its instant message and chat services. EarthLink appealed to a more advanced market that wanted simple Internet service with sophisticated technical support. Microsoft had the advantage of promotion throughout its nearly ubiquitous Windows operating system but gained little traction in Internet access until it started offering big discounts and rebates.

Now the Internet market is becoming much tougher. Growth of new dial-up modem customers has slowed. And cable companies dominate the rapidly growing market for high-speed, or broadband, service. That leaves the telephone companies, which also have high-speed service, and the leading dial-up Internet services all looking for ways to differentiate their offerings.

Moreover, both Yahoo and MSN see an opportunity to capitalize on the woes of AOL, which by its own admission, lost touch with users by spending more time selling ads than creating new interesting features.

Analysts say there is no evidence, however, that consumers show any interest in choosing Internet services because of their software or features.

"Right now it all comes down to price," said Joseph Laszlo, an analyst with Jupiter Research. "Who has the best rebate or the lowest cost for the broadband modem."

This fall, the biggest noise is about to be made by MSN, which found that its discounting strategy did not buy it loyal customers. So Microsoft says it has invested $500 million to develop and market its latest software version, MSN 8.0, with all sorts of features meant to match and better what have been AOL's core strengths, like e-mail and controls to help parents keep their children from the nastier parts of the Web.

"We now feel we have a better product, and we can market to consumers based on the differentiation of our product," said Bob Visse, Microsoft's director of marketing. The MSN ad campaign will be the company's biggest consumer push this year.

Yahoo, the big Internet portal, is a latecomer to the Internet access business, doing so with a new joint venture with the regional Bell company, SBC Communications. Yahoo, too, is trying to differentiate itself through a customized browser that highlights its strengths, like its Launchcast radio service that creates a station to each users' tastes. Yahoo has a dial-up service, with some of these features. But most of its effort has been to create a product for SBC's high-speed service — and, Yahoo hopes, on other broadband networks, too.

Yahoo's broadband software downloads frequently used components in the background before users ask for them so that, for example, windows for checking the weather or sending e-mail appear nearly instantly.

"Broadband creates a new dynamic in the marketplace and the opportunity to differentiate ourselves," said Jim Brock, the Yahoo senior vice president who oversees its new Internet access service. "Broadband will attract the most valuable and active online users."

AOL is fighting back with its own new version, also numbered 8.0, planned for an October introduction, and a number of other product improvements meant for its broadband service that will be introduced in subsequent months.

AOL's focus is more on the content of the service than its software. It is trying to reinvigorate its chat rooms and other venues for its community of members to interact. And it wants to make its main screens livelier, with more audio and video programming that takes advantage of broadband.

"Each of the services has emphasized its strengths," said Charlene Li, an analyst at Forester Research. "Yahoo is going after personalization and customization. MSN is focused on software tools. And AOL is trying to enhance its community and promote video and music."

For all their differences, the new enhanced browser programs have much in common. All three of the new services, for example, feature Internet radio services, which allow users to listen to music as they surf. Research consistently shows that music is the most popular use of broadband connections. And while no mainstream Internet company will run afoul of the recording industry by building file-sharing into their services, they can offer streaming radio services, generally without moral or legal headaches.

Taking a different tack is EarthLink, the third-largest Internet service after AOL and MSN. It does have a small new software feature to block pop-up advertising, but mainly it has not invested in either software or content. Dan Burstein, the editor of DSL Reports, said that EarthLink's approach may well be more on track than their larger competitors.

"No one anywhere else in the world has driven broadband demand by adding selected content," he said. "There's already so much available on the Net, how much can even Yahoo, SBC or MSN add?"




Where Does Microsoft Want You To Go Today?; The New Strategy: Keep Web Surfers Busy With a Series Of MSN Sites  (November 16, 1998)  $

Where Does Microsoft Want You To Go Today?; The New Strategy: Keep Web Surfers Busy With a Series Of MSN Sites  (November 16, 1998)  $

Satisfaction in Job Well Done Is Only Reward for E-Mail Software Inventor  (January 21, 1997)  $

Gateway and AOL Bypass Industry Stalwarts on Components  (May 30, 2000)  $



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