THE BROWSER WARS Harvard Case Solution & Analysis


While Microsoft had a monopolistic position in the operating software market, it had many versions of windows and other software, which gave it an advantage of  launching its browser with an aggressive competitive strategy. It continuously improved its browser and launched a multifunctional suite as its fourth version of IE, which enabled internet mailing, web conferencing and HTML editing.

Pricing Strategy

Netscape priced its first browser at $39 with a 90-day support program, while it was free for academic and non-profit use. The second version of the browser was priced at $49, while communication and commerce servers were priced quite higher at $1450 and $5000 respectively. On the other hand, Microsoft provided IE and Internet Information server free with its OS, which created a tough situation for Netscape.

Distribution Strategy

At the start, anyone could download the latest version of Netscape’s products from its website, but later on in 1995, the company used bundling arrangements with OEMs and software vendors. While, as a monopolistic firm Microsoft had an established distribution channel of its operating system,which Microsoft took advantage of through adding its browser with its new versions of windows, such as window-95 and made agreements with the ISP, which compelled them to distribute IE as compared to others.

Open Sourcing of Browser Code

Netscape provided its browser code sourcing openly to the universities, and non-profit organizations in order to have improvements in the browser, but it turned out like sharing its recipe to the world, and eventually it collapsed.

In addition to this, Netscape cut down on its developmental work and started layoffs for overcoming theincurred loss. Furthermore, Netscapealso filed the legal suit against Microsoft on its monopolistic activities and forced distribution of its browser,but it incurred more loss and remained incurring loss, which ultimately led to its acquisition by AOL, by the end of 1998....................


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