
In How the Web Was Won, veteran Seattle Times journalist Paul Andrews chronicles, for the first time, the most remarkable business turnaround of the 1990s: the story of Microsoft's turbulent journey from Windows to the Web - and of the handful of internet believers who led the charge. Taking the reader into the mind of Microsoft, Andrews reveals how the company struggled first to comprehend and then capitalize on the Net. How twenty-two-year-old Internet hound J. Allard was shocked to learn that nobody at Microsoft seemed to know anything about networking computers when he arrived in late 1991. How Steve Ballmer, Gates's Harvard buddy and second in command at Microsoft, lit the internet fuse with a head-scratching e-mail in December 1993. How Gates's technical assistant Steven Sinotsky discovered in early 1994 that Cornell University, his alma mater, was more "wired" than the world's most successful software company. And how by mid-1995, awash in the rising tide of Netscape, America Online, Java, and the Web, Bill Gates assigned the internet the highest level of importance, launching an effort that, in a matter of months, would provoke the justice Department, competitors, and industry analysts to warn that Microsoft could someday rule the internet.
Microsoft was much more co-operative than Netscape in the early days. It was one of Microsoft's advantages when Netscape was winning and running on pure arrogance. See How the Web Was Won, High Stakes No Prisoners and a few other books for details.
Microsoft did introduce ActiveX, which Mozilla considered supporting, and then decided not to.
Netscape always had a free version* available, so it wasn't really down to price. (*though it was usually the buggier beta version.) Otherwise, its plan was to make money on server side, and despite buying in several server companies, it failed.
While Netscape was technically inferior, it is true that Netscape's own marketing and managerial mistakes contributed to its downfall. For example, you could only download it from Netscape, you couldn't customize or rebadge it, and at one point it decided to withdraw it, so you could only get it as part of a Netscape suite.
All of this was suicidal when Microsoft was shipping a free IEDK and allowing computer mags and ISPs to distribute IE.
Finally, in the anti-trust lawsuit, Microsoft WON the browser case 2-1 on appeal. So bundling wasn't actually illegal, as alleged.
I watched all this closely at the time. It is also well documented in several books, including How The Web Was Won, Competing on Internet Time, and the great High St@kes, No Prisoners.
It portrays what I'd call "an idealized" version of events in that it's a fairly positive account of Microsoft's battle to beat Netscape. But it's a great story. What most people don't realize is there's a whole group of Softies inside Microsoft who were and still are fighting for the ideals that the Internet represents. The early days of IE and IIS represents a time when that group was allowed to shine and they produced great things.
It's actually very inspiring especially if you're a person whose found himself arguing for those same values in whatever company you work for.