IDC Study Reveals U.S. Browser Market Share Shifts as Microsoft Makes Gains, AOL Remains Stable, and Netscape Drops

FRAMINGHAM, Mass., Sept. 28, 1998 — Although still the market leader, Netscape lost nine points of market share in the U.S. browser market in the first half of 1998, according to a new report published by International Data Corporation (IDC). Microsoft's branded product gained just under five points of market share in the same period. America Online (AOL) remained stable from the end of 1997 to mid-1998 in the home segment.

"The results of this third IDC survey tracking Web browser market share show a dramatic shift toward Microsoft Internet Explorer by midyear 1998," said Joan-Carol Brigham, a research manager in IDC's Internet and eCommerce Strategies research program. "It appears that Microsoft's current battle with the U.S. government and Netscape's software giveaway have had little effect in keeping Netscape's market share from eroding."

This research bulletin reveals Microsoft continues to make steady progress in each user segment, although its greatest challenge still is within medium-sized and large businesses. AOL has made good progress in small businesses, apparently

picking up where Netscape lags. Six months ago, Netscape continued to lead and made gains with small business users. As of June 1998, the company has lost almost 10 percent share with this population. And although Netscape has stated in its most recent fiscal quarterly report that it continues to gain large business customers, medium-sized and large business segment usage of Navigator has dropped almost nine percent in the last six months, according to IDC research.

"Microsoft's weakness remains in the medium-sized and large business segments where it has made minimal gains," said Brigham. "This is clearly a Netscape opportunity."

AOL remains steady within the home user segment and has made gains with small business users. The company had a banner year from fiscal 1997 to fiscal 1998 (year ending in June), increasing its revenue 54 percent to $2.6 billion. It

increased its total membership by 3.9 million members in the same period, adding 665,000 new users in 4Q98 alone. AOL also launched its 4.0 product, which integrates Microsoft Internet Explorer 4.0. Quite a few AOL users had upgraded to the beta 4.0 version at the time of this research.

This bulletin, U.S. WWW Browser Market Share and Forecast Tracking, Midyear 1998 (IDC #17098) provides an overview of the five population segments (home, small businesses, medium and large businesses, government, and education) combined to provide an overall picture of Web browser market share. It also includes U.S. overall installed base browser share by product and technology for 1996, 1997, and mid-year 1998. The bulletin provides a forecast of U.S. browser shipments and installed base from 1996 through 2002. A subsequent report (available October 1998) will provide a greater level of detail on market share within each segment, as well as an updated forecast.

To purchase a copy, please contact Cheryl Toffel at 508-935-4389 or ctoffel@idc.com. For additional information about IDC's Internet research, please contact Beth Freedman at 508-935-4764 or bfreedman@idc.com.

About IDC

Headquartered in Framingham, Mass., International Data Corporation provides IT market research and consulting to more than 3,900 high-technology customers around the world. With a global network of 375 analysts in more than 40 countries, IDC is the industry's most comprehensive resource on worldwide IT markets, products, vendors, and geographies.

IDC/LINK, an IDC subsidiary, researches and analyzes the home computing market, leading-edge technologies in telecommunications and new media, and the convergence of computing and consumer electronics.

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