On August 16, 1995, Microsoft first launched its web browser, Internet Explorer. Codenamed O’Hare (after the airport), it was officially named after Windows Explorer and, well, the internet.
But this wasn’t just any ol’ release. Not only did its launch signal what Microsoft’s plans were with the growing internet, but the way in which it proceeded with Internet Explorer landed it in hot water with the Department of Justice (DOJ), almost forcing it to split into two companies. And a lot has changed since 1995. So by the time it was retired and replaced with Microsoft Edge in Windows 11, Internet Explorer was reduced to being known as a Google Chrome installer.
It started with Spyglass
Internet Explorer has a reputation for being a proprietary browser from an anticompetitive tech giant, but it actually started its life as a licensed browser from an anticompetitive tech giant. It was just a rebranded browser from Spyglass.
Microsoft worked out a pretty sweet deal for itself too. It paid Spyglass $2 million upfront, with a plan to pay an additional fee for every copy of Internet Explorer that it sold. Unfortunately, it didn’t actually tell Spyglass that it never had any plans to sell its new browser. Internet Explorer would always be free and eventually bundled with Windows 95 and Windows 98.
Unfortunately, Microsoft didn’t actually tell Spyglass that it never had any plans to sell its new browser.
As to be expected, Spyglass ended up suing Microsoft for this and got an additional $8 million out of the deal. Weirdly, that was just for the Windows 95 version. The company had to renegotiate anyway to make it available for Windows 3.1 and Mac.
It wasn’t until several versions later that Internet Explorer actually became a browser that was built by Microsoft from the ground up.
The Internet Tidal Wave
However, earlier that year, CEO Bill Gates penned one of the most famous Microsoft company memos in its history. It’s called The Internet Tidal Wave, and it’s where Gates declared, after several years of ignoring it, that the internet was, indeed, the future — not just for the company but for everyone. And a lot of that philosophy was brought into creating and releasing Internet Explorer, especially in regard to what Gates declared as Microsoft’s biggest competition. The memo stated that Netscape was to be considered a major competitor.
Yes, Microsoft famously got in a lot of trouble for bundling Internet Explorer with Windows, but it wasn’t just for bundling software. The DOJ had to prove that Microsoft didn’t do it for its customers’ benefit but to harm a competitor, and it was. There were tons of documents that proved it — including the memo. Frankly, Microsoft was so filled with its own hubris that it was never shy about what it was doing. It was even in the Windows licensing agreement for PC manufacturers that they were not allowed to bundle Netscape with their PCs. Internet Explorer was the only browser allowed to come with Windows.
The DOJ had to prove that Microsoft didn’t do it for its customers’ benefit but to harm a competitor, and it was.
But Microsoft also wanted the internet to somehow make its way into all of its products, even software like Office. The company wanted to “embrace and extend” open web technologies, a practice that’s now known as “embrace, extend, extinguish” with Microsoft’s anticompetitive behavior in hindsight. One of these places was with Java, which it licensed from Sun Microsystems. At the time, Java was going to be the next big thing on the internet, and next to Netscape, it was the other big thing that Microsoft saw as a competitor. Java was meant to allow developers to create one app that could run anywhere, something that threatened the Windows-only mentality.
That said, this licensing agreement only added to Microsoft’s troubles when it started being investigated for monopolistic practices.
Bundling Internet Explorer with Windows
So how did Microsoft’s Internet Explorer plans pan out? Well, version 1.0 wasn’t ready in time for the Windows 95 RTM, so the plan of bundling the browser with the OS wasn’t realized just yet. It took a little time for Windows versions to come with Internet Explorer, and then there was a separate version that was made for Windows NT. (Remember, regular DOS-based Windows and Windows NT were sold in parallel until the release of Windows XP in 2001.)
Internet Explorer 1 and 2 were pretty much universally hated, and 3.0 was the one that totally dropped Spyglass. By that point, Internet Explorer was getting licensing deals to be included with products like AOL, and the team that was once half a dozen people now numbered in the thousands. Not only did Microsoft have the power to make Internet Explorer available to more users, but it was technologically superior by the time IE 4.0 shipped. The writing was on the wall for Netscape, and Microsoft had caught the eye of the DOJ.
After an antitrust trial, it was ruled that Microsoft was operating as a monopoly, and it was ordered to split up into two companies, one that makes operating systems and another that makes other software. This was overturned on an appeal. Later on, Microsoft was forced to show a browser choice screen to users in Europe, and eventually, Internet Explorer fell significantly behind in popularity as more users adopted Google Chrome.