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Microsoft Releases New, 'Improved' Browser

Facing more competition in the Web browser market, Microsoft (MSFT) Thursday debuted the latest version of its market-leading Internet Explorer in hopes of stemming users switching to rival products. Internet Explorer 8, released in beta test form, features improved security, ease of use and better performance, Microsoft says.

Though Internet Explorer 8, like other Web browsers, is free, it's critical to Microsoft, analysts say. Microsoft doesn't want rival browsers gaining a foothold on PCs running Microsoft's dominant Windows operating system. That's because Web browsers can act as a stealth computing platform that makes the operating system irrelevant, says Rob Helm, an analyst at independent research firm Directions on Microsoft. Browsers also can run applications that compete with Microsoft's lucrative Office desktop productivity software. Plus, browsers can link to revenue-generating online services, such as search-based advertising, he says.

"If anybody like Google managed to get a firm hold on the browser market, they could use it essentially as a new operating system to challenge Microsoft," Helm said. "It's the same threat that Netscape posed" in the mid-1990s.

Microsoft's share of the Web browser market has eroded in recent years as new entrants have emerged. Microsoft's Internet Explorer now has about 72% market share, down from 83% three years ago, according to Janco Associates. Net Applications pegs Microsoft's browser share at 67%.

Browser Market share Trend

The open-source Firefox browser is a distant second at roughly 20%. Newer entrants in the market include Google's (GOOG) Chrome browser and Apple's (AAPL) Safari browser.

The Opera browser from Opera Software in Norway has a small market share, less than 1%, but poses a threat, too. It's pushing an antitrust case against Microsoft in the European Union for tying its Internet Explorer to its Windows operating system.

Internet Explorer 8 is a critical product and should help Microsoft stabilize its browser market share and prevent further erosion, says Victor Janulaitis, chief executive of management consulting firm Janco Associates.

After testing the product, Janulaitis says it is one of the more stable versions of Internet Explorer that he's seen. Microsoft has done a good job cleaning up the software code and has made a "good product overall," he said. By comparison, Firefox and Chrome can be pretty buggy and won't work well with some Web sites, he says.

Microsoft's Internet Explorer 8 offers better protection against existing and emerging security threats online. It blocks two to four times more malware attacks than other browsers, the company claims. IE8 also boasts being one of the fastest browsers on the market. It speeds up such common tasks on the Web as searching, mapping and navigating the most popular Web sites. Microsoft says IE8 beats other top browsers in page load time on almost half of the 25 most-visited Web sites.

Internet Explorer 8 has a feature called "Web slices," which makes favorite information from sites such as Digg, Yahoo Mail, OneRiot, and eBay instantly available wherever someone goes on the Web. The new browser also features an "Instant Search Box," which enables real-time search from sites such as the New York Times, Amazon.com and Wikipedia, as well as sites from people's own Favorites and History, complete with visuals and detailed information that save time.

Competition in the Web browser market is good for computer users, Helm says. It wasn't until Firefox burst on the scene that Microsoft started working to add new features and functions to its Web browser, Janulaitis says.

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