How Firefox Outran the Hounds

The gains of Mozilla's Web browser broke Microsoft's grip on the market and showed the merits of open-standards software

by Steve Hamm

It has been a wild first decade for Mozilla. Despite having had a staff of fewer than 100 for most of its existence, the grassroots organization managed to break Microsoft's lock on the Web browser market. If not for Mozilla's popular Firefox browser, Microsoft's software might have come to dominate the Internet the way it does computers. It's an achievement that demonstrates how an open-standards software project guided by an unusual mix of social and business principles can have a huge impact on the technology industry.

Over the past four years, Firefox has steadily chomped away at Microsoft's (MSFT) commanding share of the market. When Firefox was launched in late 2004, about 95% of the world's Web surfers were using Microsoft's Internet Explorer (IE). As of May, Firefox's worldwide market share was 18.4%, while Internet Explorer's stood at 73.8%, with Apple's (AAPL) Safari browser accounting for most of the rest, according to Web metrics company Net Applications.

While Microsoft's lead remains quite wide, Mozilla's gains have leveled the playing field. The growing strength of Firefox as an alternative to IE has convinced most Web site owners to use open Internet software standards adopted by international bodies rather than Microsoft's proprietary technologies. "They broke the monopoly. They were the provocateur, the disrupter," says Lisa Gansky, a serial entrepreneur in Silicon Valley and former head of Ofoto, a photography Web site now owned by Kodak (EK).

Branching Way Out

As it gains ground on Microsoft in browsers, Mozilla is also branching out into other markets. The company expects to deliver a version of Firefox for mobile phones before the end of the year. And earlier this year, it created a separate unit named Mozilla Messaging to focus on e-mail products.

In spite of the company's success, it takes nothing for granted. The immense popularity of Adobe's (ADBE) Flash technology for viewing online video and animation and Microsoft's competing Silverlight software show that there will always be a battle between open standards and proprietary formats on the Web. So Mozilla sees itself as a leading counterweight to the proprietary world. "Our ongoing mission is to keep the Web open," says John Lilly, who became Mozilla's CEO in January, after three years with the company.

There was no predicting what Mozilla would become when it took flight as a tiny open-source project back in March, 1998. Netscape Communications, the early leader in Internet software, was under relentless assault by Microsoft, which feared it might lose out in the shift toward Web-based computing. To turn the tables, Microsoft began giving away Internet Explorer for free and integrating the browser with its dominant Windows operating system. That gutted Netscape's business model of selling the Netscape Navigator browser to businesses.

A Slow Start

But Microsoft's approach landed it in hot water with the Justice Dept., which accused the company of using monoply power to control the market. But the strategy also inflicted the intended damage on Netscape, so much so that it chose a radical course: It stopped charging for Navigator and published the source code for the software. The hope was that thousands of volunteer programmers would use the open-source code to add neat features to Navigator, helping Netscape out-innovate Microsoft and maintain its market lead.

Business Exchange

Track and share business topics across the Web.