IE9 on the Trainwreck Track

It's tacky to say I told you so. But it now seems as if our previous predictions that IE9 cannot achieve enough market share to defend Internet Explorer's overall market leadership were spot-on. One week into the automatic IE9 update process, IE9's market share remains insignificant.

According to StatCounter, IE9 stands at a 2.89% market share (more than five weeks after launch), up from about 2.41% one week ago. This week's gains are mainly due to the activation ofIE9 on the Windows Update Channel that pushes the browser as an update to Windows 7 and Windows Vista (SP2) users. It appears that our forecast that IE9 would quickly gain market share among Windows 7 users was too optimistic. StatCounter currently indicates that Windows 7 has a 32.59% global market share: If we assume that the majority of IE9 installations take place on Windows 7 systems, then IE9 has a market share -- in a best-case scenario -- of about 7.4% on Windows 7 systems. Given the marketing behind IE9, that seems to be a bit low.

In comparison, Firefox 4 is quickly gaining traction and has surpassed IE7 over the past few days. Although it was slightly behind IE7 one week ago, Mozilla's browser is now almost 1.7 points ahead and estimated at an 8.25% market share (after one month of availability). Mozilla has an automated update mechanism that tells users there's a new browser available, but Mozilla doesn't have the power and reach of Microsoft's (Nasdaq: MSFT  ) Windows Update system. Mozilla announced that it will launch more campaigns to market and promote Firefox 4 within the coming weeks and that we should see market adoption of Firefox 4 quickly approach that of Firefox 3.6, which is right now at 18.34%, according to StatCounter.

IE9 is not performing as well as IE8 did two years ago. One month after launch, IE8 had captured a 3.74% market share -- without extensive marketing campaigns that supported IE9. IE8 was launched without any big announcements, and I have to admit that I even missed the launch day back in March 2009.

IE8 gained market share over the following two years and topped out somewhere in the range of 30% to 35%, depending on which Internet analysis firm you believe. StatCounter currently estimates IE8's share at 30.03%, which is about flat from last month. It's rather unlikely that IE9 can grow as much as IE8 did, as the browser is limited to Windows 7 and Windows Vista SP2. Compared to two years ago, IE is also dealing with much more aggressive competition, as Google (Nasdaq: GOOG  ) actively pursues an opportunity to capture market share from IE. It would surprise us if IE9 would end up with more than 25% of the browser market in the long run. It may even be tough to hit 20%, since we know that IE10 is already under development and possibly targeted for a March 2012 release.

This failure could have dramatic impact on Microsoft, as IE9 needs to limit Chrome's market share on one hand and build a foundation for Microsoft's cloud services on the other. Chrome is critical for Google to lock users into using the company's search engine to generate advertising revenues (and keep those users from using Microsoft's Bing, as well as Yahoo! Search).

IE9 may not be enough for that job, and it may not be enough to build a user base to support the coming app store in Windows 8 and services such as Office 365, which would require a large number of IE9 users to increase Microsoft's chances for success. If Google can push Chrome to more and more users, it will be able to push proprietary services such as its SPDY technology and make the case for its cloud services, while binding users to its advertising engine.

Microsoft cannot afford to lose this battle. However, the company is in a tough spot right now. It's time to bring out the big guns, Steve.

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Read/Post Comments (5) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 23, 2011, at 7:27 PM, darthurwhittle wrote:

    not only all that--but yahoo prompted me to upgrade to ie9--and now my little system is moving even SLOWER than ever before---dang is this a ripoff==even being a free upgrade--jeeezzz

  • Report this Comment On April 23, 2011, at 11:03 PM, email321 wrote:

    I think you might be jumping the gun. Any time IE is pushed out via Windows Update it doesn't show up for everyone at the same time. I would bet the rollout is staged over a couple of months.

    I have been running IE 9 and I love it. It is fast, stable and has more security features than any other browser out there.

  • Report this Comment On April 24, 2011, at 4:33 AM, louchios50 wrote:

    MSFT will always rule. Even if there was a cheaper and faster product.Because companys would have to change everything to run them.

  • Report this Comment On April 24, 2011, at 2:01 PM, Manlobbi wrote:

    @louchios The word *always* is the critical part. 'Always' assumes Windows will remain the dominant OS for the average page hit. Mac and Linux as operating systems have moved from about 3% five years ago to 13% now (http://www.w3schools.com/browsers/browsers_os.asp). Still small, but the trend is important. That is page hits by OS. However share by browser has a faster momentum with Chrome projected to pass IE as the dominant browser by late 2014 just by following the trend conservatively, late 2013 if current trend continues.

  • Report this Comment On April 27, 2011, at 5:10 PM, SysQuests wrote:

    RE: 04-27-2011 Worst MS release in decades (IE9)

    RE: IE9 on the Trainwreck Track

    By Wolfgang Gruener, Conceivably Tech

    April 23, 2011

    http://www.fool.com/investing/general/2011/04/23/ie9-on-the-...

    About 6 mos or so back IE8 started accumulating problems which wanted to report to MS. The about a month or so ago pop-ups started which said IE9 was ready.

    If one is old enough it seems every version of a MS product comes out and you discover over time you are paying support fees for flaws. Every new MS version is a cluster of solutions since the last version -- then you get to pay a hiked up price for buying the new version. Then about 10+ years ago MS and other SW and HW companies started dropping the 1 yr to the 90 day coverage, i.e., support. Then they started just dropping that version of HW or SW and only supporting the new release -- for about 30 - 90 days! Against this, MS since Windows 95 to Windows 2000 and beyond started re-writing the machine language so the disgrunted affiliate/partners/contributers/virus-writers could not disrupt/protest MS -- not Apple HW and SW.

    Over time, MS, Intel, HP, Samsung and such just outlasted or bought out competitors like National Semiconductor,...while U.S. Attorney General took MS to court.

    Through it all, we consumers, businesses, etc. kept buying unfinished new releases, and newer releases, and newer releases,...and newer releases -- corrected versions.

    Wouldn't it be nice if we could buy or accept a HW or SW which worked. Well in that vein, IE9 appears to be the worst release and no correction seems possible -- feasible -- and MS is not reachable or responding. But, with IE8 under constant attack, don't upgrade or download IE9 less you want to see all you IE9 information to date trapped in a non-functional version, with many other disjunctions. And surprise, don't import anything from your dysfunctional IE9 into any other browser less you want to see sets of dysfunctions you just won't belief -- and can't fix less you want to dump years/decades of browser input and go back to IE7.

    It’s not that this is depressing -- its beyond that -- so, I thought you might want to know.....

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