CNET también está disponible en español.

Ir a español

Don't show this again

Tech Industry

Commentary: Real prize is online presence

AOL Time Warner's lawsuit seems to be about Microsoft's competitive practices in the Netscape-Internet Explorer browser wars. But the real fight may be over higher stakes.

    AOL Time Warner's lawsuit seems to be about Microsoft's competitive practices in the Netscape-Internet Explorer browser wars. But the real fight is over far higher stakes: control of Internet users' online presence.

    Both the online content provider and the software developer are determined to be the trusted party that Internet users rely on to store all kinds of information--such as addresses, bookmarks, passwords and credit card numbers. This "presence information" will eventually turn most online transactions into a "one-click," experience, and whoever controls it will hold a huge competitive advantage.

    See news story:
    Netscape pushing for penalties

    This is especially important to Microsoft and AOL Time Warner because their products--software and content, respectively--lend themselves naturally to subscription-based sales models. If either company can become the default holder of presence information, it will have access to significant and recurring revenue.

    In their attempts to become the default presence provider, AOL Time Warner and Microsoft have integrated instant messaging into their respective browsers. This makes browser placement on the desktop--technically the focus of the lawsuit--the cornerstone of any successful presence strategy.

    AOL Time Warner has decided that Microsoft, which has been judged in violation of antitrust law, is now highly vulnerable. If it is correct and wins the lawsuit it has just brought, the content company undoubtedly will seek to have Internet Explorer removed from the Windows operating system. In addition, it will argue that its "bundling presence," taking the form of instant messaging, the Windows Media Player and other transaction-enabling technologies, also is anti-competitive and must be stopped.

    Microsoft was correct about the threat that Netscape posed as an alternative platform to Windows. By killing that browser early in its life, Microsoft eliminated the threat of Netscape as an application platform. Few could have anticipated, however, that the high ground in this battle would become presence, an area where AOL Time Warner has a nearly insurmountable market advantage and the force of law behind it.

    Given the stakes, and the spin machines that both companies have at their command, the fireworks around the AOL Time Warner suit hold the potential to eclipse those of the government trial. But then, no one ever accused AOL Time Warner--or Microsoft--of not offering spectacular entertainment.

    (For a related commentary on the increasingly adversarial relationship between AOL Time Warner and Microsoft, see

    Entire contents, Copyright © 2002 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.