If they would have succeeded in this strategy, we would have a rich web experience with "web 2.0" applications, however, the protocols would all be proprietary and you would only be able to access them on an x86 computer running Windows and IE. Their strategy of embrace and extend was hugely successful, and you can see the aftermath all around you. Look at the extraordinary lengths developers have to take to support older versions of IE. Up until the justice department rulings in the early part of the 2000s Microsoft was still making subtle tweaks to try and break standard IETF protocols. They had a willful disregard for RFCs and always tried to add Microsoft only extensions on top.
The article is interesting in that he highlights the end result is that innovation trumps monopoly, however, he ignores the damage this caused to both users and entire companies that were literally wiped out by these anti-competitive practices. WordPerfect, Novell, Netscape, and countless other innovative companies were extinguished by this.
Microsoft wasn't doing anything that Netscape wasn't doing. Both of them were introducing their own HTML extensions left and right. Each was free to implement the extensions the other introduced.
> They first tried to create a monopoly on browser market share. By bundling IE with Windows 98 as the default browser, they succeeded in gaining 90%+ of marketshare just by default, which pretty much destroyed Netscape overnight.
That's not correct. What destroyed Netscape was the fact that IE was a better browser. IE did a better job of implementing standard HTML, and it did a good job of implementing Netscape's non-standard HTML extensions, and it performed better.
It's easy to say Microsoft won by bundling, but if you look at sales numbers from before bundling, when the competition between IE and Netscape boxes on the shelves at Egghead and CompUSA and the like, you'll find that IE dominated. I don't remember the exact numbers, but I remember them being massively in IE's favor. (My employer had retail software for sale, so we subscribed to a report from a company that had an arrangement with all the major software retailers to get sales numbers, and they produced a nifty monthly report showing pretty much ever item available at those stores and how many units were sold every month. Browsers were one of the items I watched monthly on those reports).
I will admit that when IE 4 finally came out it was better than Netscape 4 (minus the active desktop crap that bogged down the 64MB RAM systems of the era), however, previous versions of IE were far inferior to Netscape.
Proprietary tags in Netscape? Yeah, I guess if you consider the <blink> tag proprietary, sure. They can be counted on both hands. IE had entire proprietary APIs, not just a few tags. There's a huge difference.
My guess after working at organisations under enhanced regulatory scrutiny, the distraction was probably felt most seriously in the upper cadres of the company as they would have had to critically evaluate acquisitions, new products as well as coordinate the legal and PR.
The decrease in ravenous embrace and extend activities left large numbers of smaller businesses with viable business models, and ensured that the Internet remained fairly neutral for non-Microsoft software (although I still struggle to this day with intranets coded with VBScript for basic things like timewriting: if this had happened on the free Internet, it would have been significantly harder for the Firefox and Web 2.0 people to get any kind of traction...)
Another important part of the history is Microsoft's June 1997 $150m investment lifeline to Apple when Apple was worth less than $4B. That investment predates US v Microsoft but at the time it was widely believed that part of Microsoft's motivation was ensuring Apple didn't go completely broke and thus invite even more monopoly scrutiny to the PC business.