What I like about this particular post is how fundamentally stupid Bob’s idea is. (Perhaps I seem hypocritical since I slammed Henry Blodget yesterday – gratuitously — for posting so much inspid linkbait. The difference is that even Cringely’s stupid theories are original, articulate and well-argued.) In a nutshell, Bob postulates that Google created a browser because they are afraid that Microsoft will “turn off ads” in IE. This would deprive Google of a huge slice of its revenue and prove to the world “who is still the sherriff.”

Needless to say, this theory is full of more holes than a Prague sidewalk in winter. First off, stripping out ads isn’t exactly as simple as flipping a switch. Microsoft would have to rely on the specific HTML format used by Google for its ads. To counter this, Google would just have to change the format. I imagine that an organization full of genius PhDs could perform some pretty impressive obfuscation with billions of dollars of revenue on the line.

Besides which, if this threat were real, what would a Google browser do to counter it? In a word: not much. (Okay, two words.) Unless you are willing to assume that IE users will shift en masse to Chrome in the short to mid-term, the implicit control over the web that Microsoft enjoys thanks to IE’s high market share would remain essentially unaffected. If this were really foremost on Google’s mind, they would do far better to invest in Firefox, which already has 20%+ market share and might make a real difference if those Redmond rascals did decide to do something dastardly with IE.

So why do I think Google developed Chrome? For the same reason they do most of what they do: because they can. Google VP Marissa Mayer says in this video interview: “We’re really excited about Google Chrome because we really like to innovate where we see not enough progress being made.” Translation: “We thought we could make a better browser than those numbnuts at Microsoft and Mozilla, and since our search business mints money we have the resources to invest in hugely ambitious projects with no obvious strategic value.” (Inserting the word “really” a few times to make this sound more like Marissa is left as an exercise to the reader.) No deep dark secret here, just the desire of a bunch of geeks to impress the world with their cool hack.

In the web browser space the situation is similar, but the main reason in this case is competition from operating system vendors. Apple and Microsoft provide a serviceable browser as part of OS X and Windows, respectively. Some percentage of the cost of buying an operating system (whether shrink-wrapped or OEM’ed with a new computer) could be considered payment for the bundled browser. This is makes it very difficult for an independent browser vendor to survive in this market, as Netscape learned in the late 90′s.

And yet there are a number of vendors attempting to do exactly this (and, to various degrees, succeeding). The most prominent example is Firefox, which has thrived through a combination of low costs (thanks to an open source development model that reaps free labor from a large fan community) and, famously, an agreement with Google to feature its search engine prominently in the browser’s user interface. Opera generates a similar level of revenue (about $50 million in 2006 versus Mozilla’s $66 million) through licensing to device manufactures, other software licensing, search partnerships and its Webmail service. Flock makes most of its money from a search deal with Yahoo.

Search partnerships form the bedrock of these companies’ income. Licensing looks to be an increasingly tough row to hoe, as there are two excellent open source browser engines (Gecko and WebKit) available for free, and both are aggressively targeting mobile and other devices. There are a number of other potential models that would help vendors grow their revenues, however. Assuming, of course, that they continue to innovate and attract users despite the fact that a built-in web browser is bundled with every major operating system.

Advertising

Search partnerships rely indirectly on advertising, but vendors could potentially make more money by hosting ads directly in the browser. The biggest obstacle is user acceptance of these ads; Opera gave up on in-browser ads in 2005 due to resistance from users. It’s a pretty safe bet that no one is going to be plastering banners willy nilly across their product’s UI. On the other hand, browser developers have a big efficiency advantage over web-based ad platforms because they have access to so much information about users’ surfing patterns. If this data can be used to provide highly targeted ads, the value to advertisers would be enormous, and if the ads are relevant enough users might even seek them out willingly.

Web services

In their role as the gateway to the web, browser vendors are in a perfect position to offer paid web services. Opera’s Webmail service is one example. Paid storage is another; it would be easy and convenient for users to buy online storage (for backup, media sharing, etc.) directly in their browser rather than seeking out a commercial service online. While Mozilla has given no indication that it intends to charge for web services in the future, its Weave project (which aims to explore “the blending of the desktop and the Web through deeper integration of the browser with online services”) would serve as a perfect platform should it choose to do so.

Freemium

Charging for a more advanced version of a free product (“freemium“, if you will) works well for many software products. Why not for browsers? As with advertising, Opera employed this model for years but eventually gave up under pressure from Firefox and less unusable versions of Internet Explorer. To attract a significant number of paying users, a browser would have to offer truly compelling advantages. And if I knew what these might be I’d be busy working on my own browser product instead of writing this.

Servers/Corporate

Netscape attempted to employ this model: provide the browser for free (once they gave up on charging for it) but license their server products to companies for a fee. The strategy failed because web servers became commoditized almost as fast as browsers had, subjecting Netscape to the deadly combination of competition from both Microsoft (with its Internet Information Server) and open source (most notably Apache). But there are plenty of server products that companies do pay for (messaging, content management, ERP, CRM, etc.). A tightly integrated browser/server combination could provide a vastly superior user experience and thus a profitable product in the enterprise market. Microsoft is very active in this space, but there is plenty of room for others to carve out a niche.

Blogged with the Flock Browser

What seems to have fallen by the wayside amongst all the speculation about whether the bid will succeed (and, if so, at what price) is what a spectacularly bad idea it would be. The business landscape is littered with the carcasses of failed mega-mergers (DaimlerChrysler, anyone?). Even when they don’t end in utter disaster, the long-term benefit to shareholders is often dubious. Add to this the fact that Yahoo is so vehemently opposed to the merger that it is seriously contemplating dumping its vaunted Panama ad platform and outsourcing its ad delivery to arch-rival Google. Then consider that industry headhunter Boris Epstein rates concerns about the deal as the number one reason for Yahoo staff defections. Not exactly an environment likely to be conducive to a healthy, happy corporate marriage.

Even more to the point: does a Yahoo acquisition imply the kind of strategic direction that Microsoft should be pursuing? The whole endeavor smells of a vain attempt to hang onto Google’s coattails in the internet search space. Google has hit a grand slam homerun in terms of technology, user experience and monetization, but that doesn’t mean that blindly pursuing the same strategy is the right move for its competitors. Nor is it particularly plausible that combining two also rans (which together would still have less than half of the leader’s market share) will create a viable counterweight to Google’s dominance of the search market.

Microsoft should stick to its knitting: operating systems and applications. Its Silverlight initiative is a step in the right direction, reacting to the inexorable shift of applications onto the web. But they are fighting an uphill battle by trying to achieve any kind of critical mass with a brand new software stack. They’ve tried this before… and when was the last time you used an ActiveX control on the web?

Why not look instead to a company that would instantly turbocharge Microsoft’s web application strategy? Adobe has achieved incredible browser penetration with its Flash runtime. As such is the only company that can plausibly achieve Microsoft’s goal of successfully promoting a framework more suitable for deploying desktop apps on the web than current incarnations of HTML and JavaScript. It has garnered accolades and tremendous mindshare for its AIR platform. And today it announced the Open Screen Project. This initiative offers nothing new on the technology front, but makes it clear that Adobe intends to make a splash in the device market with the elimination of restrictions and licensing fees on its various Flash protocols (SWF, FLV/F4V and Flash Cast), as well as the publishing of APIs that will make it easier for device manufacturers to get Flash running on their cellphones, mobile internet devices, set top boxes and who knows what else. This is exactly where Microsoft wants to be. XBox is its strategic crown jewel, after all, and the addition of Adobe’s technologies to its arsenal might finally pull the Zune out of the doldroms.

A purchase price of $32-33 per share for Yahoo would represent about an 80% increase over the pre-bid stock price. Assuming a similar premium for Adobe, the company would set Microsoft back about $35 billion, a full $10 billion less than Yahoo. It’s far from clear that a big honking acquisition is what Microsoft needs to deal with the decline of its Windows franchise and the challenges it faces as the market moves away from the bulky desktop applications that have served it so well. But if it is going to go this route, Adobe represents the cheaper and more strategically sensible choice.

• James Ward, What is a rich internet application?
  People respond to the same things in software that they appreciate in the real world: an experience that is connected, alive, responsive and interactive. Web apps nail the first point but suck when it comes to the other three. RIAs are an attempt to rectify this.
• Scott Barnes, Rich Interactive Applications
  RIAs aren’t primarily about the internet, they’re about improving user experience. I agree with James on this point. What’s lacking is maturity, and at Microsoft we’re nothing if not mature. Nice vision, Adobe, but we’re the right ones to carry the ball forward. (And by the way, I don’t know the difference between “who” and “whom”.)
• Dare Obsanjo, If You Fight the Web, You Will Lose
  No Scott, it’s about improving user experience on the internet. No cares about isolated desktop apps anymore, no matter how slick they might be. Without the internet part, the whole exercise is pointless.
• Ryan Stewart, The ever-changing definition of RIAs and how people are killing it
  Yes, RIAs are about improving user experience on the web. There are host of technologies competing to achieve this: Flash, Flex, Silverlight, Nitro and good old Ajax. But efforts to pigeon-hole RIAs as either browser-hosted (like Silverlight) or desktop-oriented (like AIR) are doomed to failure because a big part of their promise is being able to use the same technologies to develop both types of apps.
• Mark Finkle, RIA is Dead! Long Live Web Applications!
  I’m sick of all these corporate evangelist types trying to pervert the definition of RIAs to their various nefarious purposes. Let’s just put the term out to pasture and focus on good old web apps.

A lot of good and valuable points are made in the course of this discussion. As I pointed out in this blog’s manifesto, the rise of Ajax was all about augmenting the responsiveness and overall user experience of web apps. But Ajax is, at its core, a big hulking (and extremely clever) hack. RIAs are simply the logical next step in this process, providing a more elegant and cohesive way of creating web apps with the spit and polish that mainstream users crave. The term has merit, despite its imprecision, because any significant technology trend needs a snappy buzzword to hang its hat on. People hate the term Web 2.0 as well, but it has served an important purpose by giving us a framework to analyze the new internet technologies of the past few years.

Besides the obfuscating effect of the self-serving corporate agendas that Mark rightly laments, the notion of an RIA is confusing because it is evolving along two orthogonal paths. It’s a floor wax and a dessert topping. Or in this case, an effort to improve the usability of web apps and to improve their integration into desktop environments. Silverlight and Prism have absolutely nothing to do with each other because they attack two distinct vectors of the problem. The former makes it possible to write slick browser-hosted apps with elegant software architectures, while the latter grafts web apps onto the desktop in all their messy, spaghetti-coded glory. And yet both are essential parts of the RIA puzzle.

The other controversy revolves around the question of whether the proprietary creations of Adobe and Microsoft will remain viable or perish under the onslaught of the open web. It’s worth noting that Ajax arose from the fusion of two proprietary technologies, XMLHttpRequest and JavaScript. But it is hard to believe that Flex, Silverlight and their ilk will follow in their footsteps unless they open up significantly. This was my interpretation of Anil Dash’s metaphor (also discovered thanks to Mark’s post):

Think of the web, of the Internet itself, as water. Proprietary platforms based on the web are ice cubes. They can, for a time, suspend themselves above the web at large. But over time, they only ever melt into the water. And maybe they make it better when they do.

Proprietary technologies can metamorphosize into standards by opening up and garnering widespread adoption among browser manufacturers. Whether they will triumph over some future incarnation of HTML and JavaScript really depends on whether the vendors who are promoting them accept this (and the inevitable relinquishing of control it implies) before the sometimes glacial pace of web standardization efforts finally renders them obsolete.

To download the file you must agree to the following license:

Microsoft Public License (Ms-PL)

This license governs use of the accompanying software. If you use the software, you accept this license. If you do not accept the license, do not use the software.

1. Definitions

The terms “reproduce,” “reproduction,” “derivative works,” and “distribution” have the same meaning here as under U.S. copyright law.

A “contribution” is the original software, or any additions or changes to the software.

A “contributor” is any person that distributes its contribution under this license.

“Licensed patents” are a contributor’s patent claims that read directly on its contribution.

2. Grant of Rights

(A) Copyright Grant- Subject to the terms of this license, including the license conditions and limitations in section 3, each contributor grants you a non-exclusive, worldwide, royalty-free copyright license to reproduce its contribution, prepare derivative works of its contribution, and distribute its contribution or any derivative works that you create.

(B) Patent Grant- Subject to the terms of this license, including the license conditions and limitations in section 3, each contributor grants you a non-exclusive, worldwide, royalty-free license under its licensed patents to make, have made, use, sell, offer for sale, import, and/or otherwise dispose of its contribution in the software or derivative works of the contribution in the software.

…and so forth.

A bit heavy-handed for a PDF file, don’t you think?

Our initial thinking for IE8 involved showing pages requesting “Standards” mode in an IE7’s “Standards” mode, and requiring developers to ask for IE8’s actual “Standards” mode separately. We made this decision, informed by discussions with some leading web experts, with compatibility at the top of mind.

In light of the Interoperability Principles, as well as feedback from the community, we’re choosing differently. Now, IE8 will show pages requesting “Standards” mode in IE8’s Standards mode. Developers who want their pages shown using IE8’s “IE7 Standards mode” will need to request that explicitly (using the http header/meta tag approach described here).

JavaScript expert John Resig points out that Microsoft was facing a legitimate and non-obvious tradeoff between respecting web standards and not breaking existing web pages. He speculates that the threat of legal sanctions might have tipped the balance, citing a revelatory paragraph in Microsoft’s press release:

“While we do not believe there are currently any legal requirements that would dictate which rendering mode must be chosen as the default for a given browser, this step clearly removes this question as a potential legal and regulatory issue,” said Brad Smith, Microsoft senior vice president and general counsel.

John even includes a hilarious graph to illustrate his theory of how Microsoft’s change of heart came to pass. (Hilarious to browser geeks, that is. Will Ferrell probably isn’t losing sleep.)

The key subtext from my perspective is the automatic assumption that Microsoft is incentivized to do the wrong thing as far as web standards are concerned. This has certainly been the case for many years, so it’s natural for folks to have a “fool me twice, shame on me” attitude. But the dynamics of the industry are changing fast. Microsoft’s lock on the desktop operating system market is no longer ironclad as Apple gains market share and Linux creeps towards mainstream relevance. Could it be possible that they now have more to gain by complying with standards than by flouting them?

The motivation for their famous policy of “embrace and extend” (adding proprietary extensions to standards) was to lock customers into a specific platform. If I developed my app for Windows or Internet Explorer and took advantage of some special Microsoft goodness, it would be that much more difficult for me to port to another environment. With Firefox now at 20% global market share and Safari coming on strong (thanks to growth in Mac usage), this approach is no longer viable on the web. No one in their right mind is going to deploy a web application that only runs on IE. I’m inclined to believe that Microsoft initially opted for IE7 compatibility in IE8 for exactly the reason they claimed: to avoid breaking existing web pages. Move along conspiracy theorists. Nothing to see here.

The advantage of standards compliance is two-fold. First of all, you increase the chance that developers will take maximum advantage of your platform. I’m more likely to add fancy new features to my website if they are going to work across all popular browsers than I am to use some special Microsoft goo that only works in IE. Secondly, and most importantly, people care about and understand the implications of being a good web citizen more than ever in the past, thanks to agitation by Mozilla, Opera and many others. Doing the right thing is a huge public relations win, something that even Microsoft has to be very mindful of nowadays. And that’s the real reason they changed their minds.

Update: Mike Shaver is thinking along the same lines. A commenter to his post points out that Microsoft is not always as cooperative on standards-related issues, to which Mike responds:

Indeed, Microsoft is a big company, and can act in multifarious and conflicting ways, but since I was willing to blame “Microsoft” for bad behaviour by the IE team, it only seems fair to credit “Microsoft” for the good behaviour. You’re probably right that the IE team is more enlightened here than some other parts of the company; working on the web has that effect on people sometimes.

Absolutely. That’s why we love the web: it is open by nature and is pushing the whole software industry in the right direction.

Examining Opera’s Assumptions

Håkon is upfront regarding Opera’s motivation for approaching the European Commission:

In the area of web browsers, Opera Software has proposed a specific kind of remedy – that Microsoft only be allowed to distribute standards-compliant browsers. Microsoft’s IE is bug-ridden and the company, despite its vast resources, has shown little interest in fixing problems that cost web designers time and sleep. IE dominates the web due to its being bundled with Windows. This forces web designers to prioritize coding for IE. Coding for standards-compliant browsers becomes a secondary consideration

In other words, Opera is having trouble growing its market share, and they feel that websites that don’t support their browser’s standards-compliant implementation are to blame. But does this claim hold water? Let’s examine some of Håkon’s assumptions in more detail.

Opera would have significantly more success if more websites were compatible with their browser

Obviously this wouldn’t hurt. After spending a week using Opera as my primary browser, I was definitely turned off by the fact that the time tracking website we use did not work correctly. SlimTimer makes this clear on its homepage: “First, you should know that SlimTimer only supports FireFox 1.5+, IE 6+ and Safari.” This alone would be enough reason for me not to adopt Opera permanently, so it is easy to see why they are annoyed by the current state of affairs.

Nonetheless, it beggars belief that Opera would gain real market traction purely as a result of broader website support. Being as good as the other guys isn’t enough when you’re faced with formidable competition like IE, Safari and Firefox. Surely the market power of Microsoft and Apple, as well as the huge market traction currently enjoyed by Firefox, are much more important factors in Opera’s failure to expand its market share.

It is possible to designate certain web specifications as “standards”

To his credit, Håkon does suggest a definition for what should be considered a web standard:

If two or more major web browsers, in official shipping versions, add standards-related functionality that’s generally considered useful to the progress of the web, and described in a publicly available specification, Microsoft must add the same functionality.

Unfortunately, this characterization is riddled with imprecision and ambiguity. First of all, what exactly is a “major web browser”? And more pointedly, does Opera even qualify? After all, it only has 0.67% of the market (according to TheCounter.com). What does it mean for functionality to be “generally considered useful to the progress of the web”? Considered by whom? It seems inevitable that any such regulation would quickly descend into pointless bickering about what really constitutes a standard.

It is impossible to compete in the browser market because of Microsoft’s operating system monopoly

To quote Ars Technica:

The one shortcoming with Opera’s antitrust complaint is that Firefox has made significant headway against Microsoft. From its 1.0 release in November 2004 to the present, Firefox has gained over 125 million users worldwide, and as of last month, Firefox held over 40 percent of the market in several EU member nations. Firefox has managed a huge surge in popularity where Opera has failed over the last 10 years, demonstrating that it is possible to supplant [IE].

Microsoft is Opera’s main competitor

It is generally accepted that most IE users are technically unsophisticated and adopt whatever browser is pre-installed on their computer. This is certainly a plausible argument for making sure that all vendors get a fair shot at having their browser bundled with Windows. But in the current state of affairs, Opera is competing for users who decide to switch from their default browser, so their principle adversary is obviously Firefox, not IE. And if regulators finally do away with Microsoft’s predatory bundling tactics once and for all (please!), Firefox, with its dominant brand and market share, is much more likely to benefit than Opera.

Microsoft needs to play ball if website support for Opera is to improve

Yes, Opera would face a more level playing field if it had the broad website compatibility of more popular browsers. But the number of public websites that don’t support Firefox has plummeted since it began to make its mark a few years ago. Mozilla is just as committed to promoting web standards as Opera is, and the soon-to-be-released Firefox 3 marks huge progress in this regard. Websites are going to support Firefox 3, so they’ll automatically support Opera as well. Right? Why do we care about Microsoft again?

The European Commission is the right body to enforce standards adoption by browser vendors

Of all Opera’s assumptions, this is the wackiest. I’ve lived in Europe for 15 years, and I love it. We have great food, culture, architecture, rich linguistic diversity and a strong currency to boot (zing!). But I’ve never heard anyone claim that the EC is particularly democratic, transparent or efficient. In fact, its patent lack of all of the above is one of the most frequently voiced criticisms of the European political system.

At the same time, the United States has a huge lead in technological innovation largely because of its lack of overbearing regulation. The last thing we want is to put a bunch of bureaucrats in charge of which features must be implemented by which software product. As one of the few shining examples of internationally prominent consumer software firms born and raised in Europe, it is frankly shocking that Opera would even suggest this course of action.

Conclusion

I like Opera’s product. I like the openness and independent spirit that the company stands for. I like the fact that it is a successful European software company challenging America’s technological hegemony. I like Håkon. But this just makes it all the more vexing to see Opera embark on such a misguided quest to put the government (or, more correctly, a non-democratically elected supranational body) in charge of technological innovation. It is hard not to conclude that Opera is getting pretty desperate in the face of its dwindling market share.

Guys, there has to be a better solution. The browser space is firming up, and unfortunately Opera doesn’t have a strong competitive position. This isn’t the fault of Microsoft or anyone else. It’s just the way that markets work; they tend to coalesce around a small number of perceived leaders as they mature. On the other hand, Opera has great technology, a great brand and a great team. Rather than resorting to political remedies, they should be (and hopefully are) thinking about how to leverage these considerable assets to reinvent and revitalize their company.

Similarly, many users have asked for Firefox to be preinstalled on Dell machines, including Windows boxes. As the submitter points out, “Most people only use IE because they aren’t aware of other browsers – they think Internet Explorer is the Internet!” It seems logical that all the advantages gained by shipping with Linux (customer choice, greater appeal to tech-savvy buyers and simply offering a better product) apply to Firefox as well. And yet, one year later all we’ve seen is a vague rumor of a limited trial in the UK that I wasn’t able to confirm after extensive googling. In fact, I’m not aware of any major PC manufacturer shipping Firefox (or Opera, for that matter) with any of their Windows machines.

What gives? The only explanation I can see is that Microsoft is still putting the squeeze on OEMs, who are getting price breaks (and/or avoiding some sort of sanctions) for not supplying a competing browser. This is just speculation on my part, but if I’m wrong then I’d be most keen to find out the true reason. If not, then you have to wonder: didn’t we go through a decade or so of antitrust proceedings in the United States and Europe exactly to put an end to this kind of tactics?