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Tuesday, September 30, 1997 - Page updated at 12:00 AM

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Netscape, Microsoft Renew Browser Joust -- Ie 4.0 Rollout Triggers Clash

Seattle Times Staff Reporter

The browser wars are back.

The Web's chief warriors clashed as Microsoft was preparing to release its latest Web browser in San Francisco tonight, while Netscape manned instant-response phone lines 30 miles to the south at its Mountain View, Calif., headquarters.

The renewed jousting, which began nearly three years ago after Netscape declined to license its browser technology to Microsoft, whipped up a media frenzy as Bill Gates got set to take the stage at a gala Fort Mason rollout of Internet Explorer, Version 4.0.

Netscape's Mike Homer, marketing and sales chief, dropped a bombshell at the Seybold Publishing conference yesterday in San Francisco by showing off a new program code-named Aurora that makes viewing what's stored on a computer hard disk similar to viewing the Web. The move provides an answer to Microsoft's integration of the Web with its Windows operating system, the most noticeable feature of IE 4.0.

And Netscape co-founder Marc Andreessen, once termed the Internet "poster boy" and "the next Bill Gates" after Netscape's hugely successful initial public offering, was scheduled to be featured on CNN, Fox, PBS and other TV network shows today, fanning the browser flames. Netscape also published hotline numbers for journalists and analysts seeking its response to Microsoft's rollout.

New market-share numbers show Netscape losing ground to Microsoft, albeit not as quickly as observers predicted last year when the browser wars erupted into the public consciousness. Last August, Microsoft's Version 3 browser received favorable reviews compared with Netscape's equivalent, touching off a steady climb in market share from around 5 percent or 10 percent to the 36 percent figure announced yesterday by Zona Research.

Zona's findings are based on polling 279 major enterprises. Netscape's share came in at 62 percent; the balance was mostly NCSA Mosaic, the original graphical browser.

Zona said Microsoft's share was at just 3 percent in February 1996 and 8 percent nearly a year ago. In January of this year Microsoft reached 28 percent, a jump of 20 points in just more than four months.

Today, Netscape is the "significant player due to its strong brand-name recognition" and effective marketing, said Clay Ryder, chief analyst at Zona. Of corporations with browser "policies" in effect, Netscape held 55 percent preference while Microsoft came in at 32 percent, he noted.

But Microsoft is making fast inroads among corporations, Ryder added, because it gives the browser away for free, in contrast to Netscape, which charges corporations licensing fees.

"With Internet Explorer, a corporation knows it's always in compliance," Ryder said.

Most surveys show Netscape with 65 percent to 70 percent market share, said David Smith, research director of Internet strategies for the Gartner Group.

The trend is in Microsoft's favor because of deals the company has made with computer makers and Internet service providers to promote Internet Explorer as their "default" or "preferred" browser, Smith said. He expects the two browsers to be neck and neck at 50 percent each within a year.

"I think Netscape made a mistake even though they might not admit it. They took their eye off the ball a little bit on market share" while promoting Communicator, a groupware package, instead of just the Navigator browser, said John Swenson, analyst for Windows Watcher newsletter.

The biggest competitive issue between Microsoft and Netscape is

"marketing, distribution and pricing" - not technology, Swenson said.

Netscape shows no signs of slowing down, however. Earlier this month it announced a "Netscape everywhere" initiative that includes letting employees of companies licensing Netscape use the browser at home free. Netscape also will distribute CD-ROMs containing its browser through magazines, mass mailings and other channels.

The Aurora technology will enable Netscape users to index their hard disks for viewing from their browsers, said Julie Herendeen, group product manager. When a user does a search, the hard drive's information will be included. Spreadsheet, word processing and database information on the hard disk could be altered by calling up the information from the browser.

Netscape's approach is to make the hard disk part of the Web and not the other way around, which is the IE philosophy, Herendeen said. No release date has been announced for Aurora, she said.

Aurora represents a new direction for Netscape, which even last week was warning that users may be confused by IE 4.0's blending of Windows with the Web. Corporations who upgrade to IE 4.0 face increased costs associated with retraining employees and changing PC configurations, Netscape says.

"The costs of adopting Internet Explorer will exceed any benefits of integration," said David Rothschild, Netscape director of product marketing.

Netscape needed an answer to Microsoft's strategy, however, Smith said.

In partial acknowledgement of the confusion factor, Microsoft decided to make optional its Active Desktop technology integrating the Web in IE 4.0. But extensive usability studies at a specially equipped laboratory in its Redmond headquarters have convinced Microsoft that users will like the new system, said Joe Belfiore, a user interface specialist with Microsoft's IE 4.0 team.

"The realm of browsing on your hard disk and browsing the Internet is really not that different," he said. "We wanted to minimize the amount of learning people have to do by making the two things be the same."

Paul Andrews' Web page address is: http://www.SeattleTimes. com/ptech/paul/andrews.html ----------------------------------------------------------------- Browser war room.

How does the new version of Internet Explorer stack up with the equivalent Information from Seattle Times business reporter Michele Matassa Flores is included in this report. version of Netscape Communicator? This Sunday in The Seattle Times, the Personal Technology section takes a user's look at Microsoft's new browser.

Copyright (c) 1997 Seattle Times Company, All Rights Reserved.

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