Andreessen: Microsoft to make IE more competitive

SAN FRANCISCO -- The success of alternative browsers such as Mozilla Foundation's Firefox may ultimately have an unexpected side effect, causing Microsoft Corp. to be more aggressive in leveraging its dominance of Internet client software, said Marc Andreessen, one of the founders of the browser company that Microsoft beat out in the late 1990s, Netscape Communications Corp.

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After Internet Explorer (IE) surpassed Netscape as the dominant Web client, browser innovation at Microsoft "pretty much stopped in 1998," Andreessen said during a session at the Web 2.0 conference in San Francisco Wednesday. This means that the company has not done all it could have done to use the browser to strengthen its other products, such as its MSN service, or to prevent competitive Internet companies such as Yahoo from growing, he said.

"One of the most amazing things over the last six or seven years is watching Microsoft basically get a monopoly over the browser and then not use it," he said.

Internet Explorer has been used by approximately 95 percent of Web surfers since June 2002, according to WebSideStory Inc., a San Diego Web metrics company. Recently, however, its dominance has begun to erode slightly, due in part to a number of well-publicized IE security vulnerabilities and a generally favorable reception to Firefox, a slimmed-down browser developed as part of the open-source Mozilla project.

Increasing pressure from alternative browsers such as Firefox and Opera will ultimately cause Microsoft to take a second look at the browser and how it can better be used to leverage Microsoft's monopoly, Andreessen said.

"Microsoft is certainly going to respond competitively to these things. I can guarantee that," he said. "I think that it is quite possible that this is going to get very interesting over the next two or three years," he said.

Andreessen's comments came during a discussion with Yahoo Inc. Chief Operating Officer Dan Rosensweig, in which they debated the future dynamics of Internet business. Andreessen is co-founder and chairman of Opsware Inc.

The two were at odds as to whether control over user data would become a major issue in the coming years, with Andreessen arguing that denying users control over their data ultimately would be a way of locking customers into "walled gardens" of Internet services.

The phenomenon can already be seen with companies such as eBay Inc., he said. "You can't get your reputation out of eBay, you can't get your purchase history out of eBay, you can't get your stores out of eBay," he said. "It's a plantation owner/sharecropper kind of relationship."

Rosensweig, whose company has more than 150 million registered users, argued that consumers today have retained the ability to change their online habits. "We noticed a few people who changed their habits in the last few years in some categories," he said. "Search may be one."

"We're living in a world today where it's too easy to change."