Programming Windows: Internet Explorer (Premium)

It was late 1994, and Microsoft was shopping around for a web browser. It was too late to create its own web browser from scratch, not if the product was to be included with Windows 95. But then fate intervened. First, Netscape spurned its acquisition offer, and that firm quickly starting signing up partners to distribute its browser. Then, AOL yanked its next choice out from under it by purchasing BookLink for $30 million. (AOL CEO Steve Case later confirmed that his firm had only purchased BookLink to keep it out of Microsoft’s hands.) Finally, CompuServe paid an incredible $100 million for Spry, another browser company.

(Fun aside: Microsoft did license BookLink’s browser technology for a Microsoft Word feature called the Internet Assistant, which translated Word documents into HTML so that they could be published on the web.)

So Microsoft was left with only one obvious choice: It could license Mosaic from Spyglass, which had obtained the master license for that browser technology from the National Center for Supercomputing Applications (NCSA). Ironically, Microsoft had previously spurned Spyglass when the firm inquired about licensing Mosaic just months earlier. But now the software giant needed Spyglass. And time was of the essence.

Oddly, Microsoft originally negotiated only for a browser for Windows 95, and not for Windows 3.1 or NT. The software giant refused to pay any royalty, and it suggested a one-time royalty payment. Spyglass, which typically received about $1 per each copy of Mosaic it sold, declined the offer. After all, Windows 95 would quickly sell in the millions and then tens of millions of units. Spyglass was looking at a windfall.

Internally, Microsoft calculated that it would cost it about $1 million to create its own web browser from scratch using a normal development schedule in which it would miss the Windows 95 launch. And any attempt to speed up that timeline to meet the Windows 95 deadline would lead to massive additional costs. So it offered $2 million for the Mosaic source code, with stipulations that limited its reliance on Spyglass. It would receive only a single snapshot of the Mosaic source code, which it would then use to build its own browser for both Windows 95 and NT, but not 3.1, or for the Mac or Unix. Spyglass agreed, and the contracts were finally signed—and never officially announced—on December 16.

Microsoft, quietly, had become a browser maker.

A small team of 5 or 6 engineers led by Thomas Reardon began working to turn the Spyglass code into the first version of Internet Explorer. As originally envisioned, Internet Explorer, or IE, would be a standalone application, like others that Microsoft bundled in Windows. But the first version would be very basic, thanks to the tight schedule. Subsequent releases, which would happen at first on a quick, Netscape-like schedule, would close the functional gap with Navigator.

Microsoft’s original goal of bundling IE with Windows 95 would never be realized: The firm would finalize the operating system in early 1995 for its belated August 1995 launch, well before even a basic version of IE could be added to it. So it decided to launch IE 1.0 as an add-on for Windows 95 that would be delivered as a component of Microsoft Plus! for Windows 95, a retail package that provided additional utilities, desktop themes, a game (3D Pinball), and various visual enhancements to Microsoft’s new system. Among the available options was something called the Internet JumpStart Kit, which provided “quick and easy access to The Microsoft Network, the Internet, and Internet Mail.” It was, in short, IE 1.0.

(Fun aside: Microsoft later replaced the Internet Jumpstart Kit with the Internet Connection Wizard, which was included in subsequent versions of Windows.)

In the interim, Gates finally got the Internet religion and penned his Internet Tidal Wave memo, setting his company down a path where it would reorganize its business around the Internet and set out to destroy foes such as Netscape and Sun. As part of the sea change within the company, Reardon got many more resources (and eventually fell under the purview of a new Internet Platform and Tools division). But when IE developer Ben Slivka suggested to Gates that Microsoft should consider giving away the browser like Netscape was doing, Gates exploded, calling Slivka a “communist.”

Gates was still coming around to the whole Internet thing.

When Windows 95 finally arrived to widespread acclaim—and to lines of people outside of retail stores around the world waiting to buy the software—it did not include Internet Explorer. But when users did install IE 1.0, they discovered a last-minute change to the OS that Sun CTO Eric Schmidt claimed Microsoft had made “after the Windows 95 beta”: Doing so would render other web browsers, including Netscape Navigator, unworkable. Microsoft claimed it was all a mistake, and it eventually fixed the error. But the U.S. Department of Justice listened to the complaints and began quietly investigating the company again.

Internet Explorer 1.0 was indeed basic. It could browse the web in a manner similar to Mosaic and other early web browsers, but it lacked support for key Internet technologies like cookies, frames, and programmability through Java or a scripting language.

But IE 1.0 was always meant to be a placeholder. IE 2.0, released just two months later in October 1995, started to fill in the gaps. It provided support for cookies, SSL, JavaScript, and HTML 3. It provided integrated email and newsgroup clients, as did Navigator. And it could import bookmarks from Netscape’s browser for the first time.

IE 2.0, like its predecessor, was not well-received. And that was true internally, as well. After launching the browser in San Francisco, Gates took some engineers and executives to a hotel bar next to the Moscone Center to commiserate. After perhaps too many drinks, he ranted for about 20 minutes about “the worst piece of software we’ve ever shipped,” causing nervous sideways glances among his audience. He was actually talking about an email product, not IE, but the message was clear: IE needed to improve. And quickly.

IE 2.0 was eventually bundled with Windows NT 4.0 in mid-1996, and it was ported to Windows 3.1, the Mac, and Unix after Microsoft went back to the negotiating table with Spyglass. But it was during IE 2.0’s short life that Microsoft internally began plotting something bigger for its browser. And something more sinister for its competitors.

First, it would give IE away for free. Not sort-of free, like Navigator, but free-free.

Next, under the direction of Thomas Reardon, it would integrate IE into Windows and create a seamless product, originally to be called Windows 97. IE would no longer be a standalone application. It would become the basis for all browsing in Windows, not just the Internet but file system and network browsing as well.

In 1996, these plans were ill-formed, and Microsoft went down several interesting paths that never came to fruition, including a site map feature by which users could navigate the structure of web sites like they did word processing documents in Word. But eventually, a plan came together where IE’s web technology could infiltrate every level of Windows, from the shell on up. Microsoft wouldn’t just beat Netscape by bundling IE, it would beat Netscape by putting the full power of Windows behind IE. And, important to note, by building a better browser as well.

Internet Explorer 3.0 was the first evidence of that latter work. A significant upgrade from previous versions of IE, this new browser featured an all-new look and feel—with the now-classic “e” logo used as a progress indicator in place of the Windows flag used in IE 1.0 and 2.0—and a dramatic list of functional improvements. It supported Cascading Style Sheets (CSS), HTML frames, Active X controls, Java applets, and Netscape’s NPAPI plug-in technologies. It included bundled Internet Mail and News (the predecessors to Outlook Express) and NetMeeting and Comic Chat clients, and integrated versions of Windows Media Player, RealPlayer, and the Windows Address Book.

IE 3.0 also arrived with the world’s first peek at some of the Microsoft-specific technologies that would mark later IE implementations. It included Jscript, a reverse-engineered version of JavaScript and was the first version of IE to not include any Spyglass code at all. It provided an HTML Layout Control that provided more sophisticated but proprietary website designs ahead of a coming generation of Dynamic HTML. It supported ActiveMovie and VRML. And it of course included Microsoft’s “polluted” Java Virtual Machine (JVM).

IE 3.0 was a massive engineering effort, and by the time it was released, the Internet Platform and Tools division, led by former Windows 95 chief Brad Silverberg, had ballooned to over 2500 employees. It was also a smashing success. With Netscape frantically petitioning the U.S. government for help, Microsoft and IE racked up win after win. By the end of 1996, America Online, CompuServe, and Prodigy had all selected IE 3.0 as their default browser for a combined installed base of 15 million users. And IE 3.0 had achieved about 30 percent usage share vs. about 70 percent for Netscape; Navigator had once accounted for about 90 percent of all web browsing.

But IE 3.0’s share would only continue rising. By February 1997, IE 3.0 commanded 38 percent of the market and Navigator had fallen to 58 percent. IE usage was expected to surpass Navigator by the end of the year.

So, Microsoft delivered the death blow.

In October 1997, Microsoft released Internet Explorer 4.0. IE 4.0 wasn’t just a web browser. It also arrived—on Windows 95 and NT 4.0—with a Windows Desktop Update feature that previewed the integration the software planned for what was now called Windows 98. This update would replace the Windows shell (which had debuted in Windows 95) with a new web-based shell with web-like one-click objects and a so-called Active Desktop that could host web content.

Capitalizing on the nascent “push broadcasting” craze, IE 4.0 also included a feature called the Channel Bar, a floating toolbar of content featuring third parties like AOL, Disney, and WB. Netscape would offer a similar service called Netcaster.

The list of improvements and changes in IE 4.0 is breathtaking. It shipped with new tools like FrontPage Express and the Web Publishing Wizard (web publishing), NetShow, and Outlook Express, plus updated versions of Netmeeting, Microsoft Chat, and RealPlayer. It supported true Dynamic HTML, inline PNG graphics, favicons, and a new layout engine, codenamed Trident, that was implemented as a COM component so that it could be integrated into Windows.

IE 4.0 wasn’t just competitive with Netscape Navigator, it was better. Indeed, by the time IE 4.0 arrived, Netscape had already begun a downward spiral, internally and externally, from which it would never recover. Netscape recast its client offering as Communicator, to differentiate the browser from its other bundled components. And it began seeking new avenues by which it could compete against the most fearsome predator that the software industry had ever seen.

Netscape notched a few minor victories, most notably with the antitrust regulators that forced Microsoft to delay the release of Windows 98 with its integrated IE functionality until the next spring. But that delay wouldn’t save Netscape or its web browser. Nor would it stop IE from dominating the browser market in the years ahead.