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Microsoft to update retail IE

The giant is readying a new retail version of its browser, a CD-ROM package with third-party software called "Internet Explorer Plus."

Despite the availability of both major browsers for free, Microsoft (MSFT) and Netscape Communications (NSCP) will let you pay for them if you want.

Microsoft is preparing a new retail version of its browser, a CD-ROM package called "Internet Explorer Plus." The $50 product first shipped last October. It contains the same browser available for free on the company's Web site but adds a host of additional software from Microsoft and third parties.

It also offers free trial Internet access and subscriptions to Microsoft financial and gaming services. Users get $20 back if they mail in a rebate certificate.

The new version is due by the end of the month, according to testimony during last week's Microsoft-Sun Microsystems court hearing.

Internet Explorer representatives declined to comment on release dates, features, or pricing, but sources close to the company confirmed the release date.

The current version of IE Plus includes McAfee's WebScanX antivirus software, Cyber Patrol's filtering software, Net.Medic system diagnosis software, and two months' worth of free Internet access through AT&T WorldNet and the Microsoft Network.

The new upgrade will incorporate the recent Macintosh, Unix, and Windows 3.1 versions of IE, according to sources. It also will undergo the same bug fixes and accessibility features that were incorporated last fall into IE 4.01, a Web-only release that came only two months after the ballyhooed launch of IE 4.0.

Netscape in January decided to give away the standard versions of its Navigator and Communicator client software, but the company continues to sell retail versions in the $20 to $50 range, including mail-in rebates. (See related story)

Similar to Microsoft, Netscape adds enticements such as third-party software and discounted Internet access to its packages.

Despite Microsoft's arguments that the browser is simply a part of the operating system, the giant continues to sell the retail CD-ROM version, a move that may raise eyebrows considering the mounting pressure from the Justice Department and several states' attorneys general.

Opponents including the DOJ claim the browser is separate from the operating system and that Microsoft's attempts to integrate the two violate antitrust agreements Microsoft signed in 1995. Meanwhile, the upcoming Windows 98 OS is the culmination of that integration strategy, with Internet Explorer built right into the system.

Except for the third-party software bundled on the IE Plus pack, it is unclear why users would shell out $30 for the product, given that the browser is updated and posted to the company's Web site. Also, Windows 98 will have the most up-to-date version of IE before it ships to customers, according to Windows product manager Stacey Breyfogle.

Nonetheless, customers continue to pay for browsers off the shelf.

"Buying habits change slowly," said Chris LeTocq, principal analyst with market research firm Dataquest. "People like to own things and have something tangible."