Mozilla Outfoxing Microsoft

Firefox is catching fire -- pardon the pun -- and for good reason. Web surfers looking for a reliable alternative to Microsoft's (NASDAQ:MSFT) Internet Explorer have been busy over the last month downloading the new version of the Web browser. The Mozilla Foundation, a network of programmers jointly developing open-source technology, reports more than 8 million people have downloaded the program since early November.

The vulnerabilities of Internet Explorer have opened the door for competitors. Mozilla inherited much of the underlying software code from Netscape, which was purchased by Time Warner's (NYSE:TWX) America Online in 1998. The popular Web browser was instrumental in the Internet's growth in the 1990s. Could Firefox gain a similar popularity?

One estimate, by WebSideStory (NASDAQ:WSSI), found that Internet Explorer's share has dropped 5% in the past few months. OneStat.com, a Netherlands-based research group, predicts Firefox is well on its way to the stated goal of taking 10% of the browser market within a year.

Soon Firefox won't just be available for download off the Net. The program will start showing up in retail stores as a preinstalled browser on PCs from Linspire. It is being bundled alongside the OpenOffice.org office productivity suite, which is considered an open-source alternative to Microsoft Office. Retailers such as Wal-Mart (NYSE:WMT) and Staples (NASDAQ:SPLS) carry Linspire machines.

The competition isn't with only Mozilla. Rumor has it that Google (NASDAQ:GOOG) is pondering a browser too. As fellow Fool Alyce Lomax reported, Google jumped in the mix by acquiring the domain name "Gbrowser.com," plus some experienced browser programmers from Microsoft. This poses a unique challenge to Microsoft. The company can't claim infringement of its software codes. The software giant's next major upgrade for Windows -- including Internet Explorer-- won't come until 2006, thus giving extra time to the other browser wannabes. Firefox isn't anywhere close to leading the browser race, but the gap is ever so slowly shrinking one user at a time. I wonder whether the big M is taking notice here.

The Mozilla Foundation is a nonprofit corporation; users can make donations to help fund continued software development. In this way users become investors -- not in the traditional sense of a publicly traded company but instead investing directly into new technologies that given rise to something other than a security-plagued program. The returns from these investments don't show up yet as earnings but in the final product more and more people are using every day. I can't wait to see what comes next.

For more Foolish talk and browsing ideas, check out Crazy Like a Firefox.

Fool contributor Kelvin Taylor has a few bright ideas but does not own shares of any of the companies mentioned.