Microsoft goes private in browser wars

Has Microsoft found a new way of combating Google's dominance of online advertising?

Last Updated: 31 Aug 2010

Software giant Microsoft has just released a ‘beta’ test version of Internet Explorer 8, the latest incarnation of its all-powerful web browser. Much of the media attention has centred on a feature called ‘InPrivate’, which allows users to surf the internet without leaving a trace of their presence – dubbed ‘porn mode’ (for obvious reasons), this will make it harder for online advertisers like Google to target specific users. And it’s a lot cheaper than buying Yahoo…

The InPrivate feature works by allow users to (selectively) prevent websites from installing ‘cookies’, the small data files that allow them to monitor web usage. It also prevents other parts of your online footprint, like temporary internet files and browsing history, being stored on your hard drive. This will go down well with privacy campaigners – but it will also make life difficult for the advertisers who rely on this information to produce targeted display ads. And as the biggest beast in the jungle, Microsoft’s arch-rival Google has the most to lose.

You might argue that that after failing to persuade Yahoo to accept a $44bn takeover bid earlier this year, Microsoft has no choice but to think of other ways to eat into Google’s online dominance – particularly since its own ad market share actually dropped in July, according to research group Nielsen Online. Display still forms a relatively small part of Google’s advertising revenues, but this focus on privacy will make it harder for the search giant to build this part of its business (it’ll make it harder for Microsoft too, but perhaps this is a price it’s willing to pay).

And it’s not the only crafty anti-Google feature on the new browser. There’s also a search box on the toolbar that allows users to search a list of specific sites, while any street addresses will link straight through to Live Maps (a Google Maps equivalent). So it’s clear that Microsoft sees IE8 as a key plank in its competitive strategy. And no wonder – as the most widely-used browser (albeit controversially), it’s one of the main areas in which it can claim prominence online.

We’re not convinced this will actually derail Google (we’re sure they’ll work out some way round it), but it’s got to be a welcome development as far as users are concerned. Of course the Firefox browser already has some sophisticated anti-privacy features, but this move by Microsoft will give the debate even greater prominence. Which has to be good news for those of us who aren’t entirely comfortable with Google and co monitoring everything we do online...

In today's bulletin:
House price falls hit double figures
M&S whistleblower hauled across the coals
Microsoft goes private in browser wars
UK firms lacking bouncebackability
Jordan is Britain's top entrepreneur

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