Microsoft Losing More Ground To Google, Apple

Internet Explorer is slowly losing market share to its biggest rivals, Apple and Google, for reasons as disparate as they are significant.If you compare browser market share data from Net Applications for IE, Chrome and Safari for September 2009 versus September 2008 (as illustrated by the Atlantic's Daniel Indiviglio), it's pretty clear that Microsoft has given up nine points of market share to Firefox (+4 basis points), Chrome (+3), and Safari (+2).

Why is this significant? Well, imagine if Google's search share had fallen from around 65% last year to 56% now; people would say the sky was falling, and they'd be right. In fact, it would be a lot worse for Google, as search share is directly related to the company's only significant revenue stream, which is online advertising.

But this nine-point decline isn't less significant for being an indirect indicator of the direction in which Microsoft is headed: down. It's not as if Opera, for instance, were catching fire with the hip crowd (which would be a lot better sign than what's actually going on).

Let's start with the 2-point gain for Safari. One thing is clear: this isn't about PC users switching to Safari; it's about the general hysteria around the iPhone 3GS lifting all things Apple, while potential PC users waited for Microsoft to introduce Windows 7 before deciding whether or not to buy a new PC.

And the 3-point gain for Chrome is about the growing netbook phenomenon, and the agnosticism of netbook makers for both operating systems and Web browsers -- including the eponymous Chrome operating system which, whether Steve Ballmer likes it or not, is Microsoft's first real rival in the netbook market.

Microsoft is expecting a bounce in those numbers once the effect of Windows 7 has manifested itself at retail, but the howls of pain felt by Vista users trying to upgrade to Windows 7 has probably dampened any consumer enthusiasm Microsoft might have drummed up with it's "Windows 7 was my idea" ad campaign.

Yes, there's lots of noise today about Windows 7 market share growing rapidly in percentage terms, but that's based on a small comparative and comes at the expense of Vista rather than OSX or anything else. The browser numbers, on the other hand, reflect significant sample sizes and timelines against which trends can be compared.

Microsoft is lucky it still has business users in the thrall of its enterprise license agreements, because the trend among consumers is growing clearer by the day, and where browsers are concerned it's not good for Microsoft. It's not so much Mac that Microsoft should fear as much as Chrome, which is built for the Web, allows retailers to sell netbooks at lower prices while maintaining margins, and has a much prettier logo. Think esthetics don't matter?

Just look at the success of everything Apple, then imagine it ten times less expensive.