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Technology Stocks : Microsoft Corp. (MSFT)
MSFT 497.83-0.1%Jul 7 3:59 PM EDT

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From: QwikSand1/4/2005 3:10:31 AM
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One of the 5 things in a WSJ "Five Tech Things To Watch in 2005". Subscription required.

--QS

online.wsj.com

...Microsoft will get pushed (a bit) off the desktop.
Since the late 90s, Microsoft has been trying to get a bigger piece of the Web and online commerce. Its results have been mixed, and two recent signs point to a tough 2005. First, auctioneer eBay said it would stop supporting Microsoft's Passport e-commerce sign-in system, meant to speed up online purchases by saving consumer information. While embarrassing, the eBay move was hardly landscape-changing: There hasn't been a lot of momentum behind Passport in recent years, and Microsoft has treaded lightly after it settled government charges that it misled consumers about the security and privacy of the system. But it underlines how Microsoft has found it tough going in its efforts to establish itself as a major e-commerce middleman.

Second – and more important -- momentum is fast growing for alternatives to Microsoft's Internet Explorer browser, the world's preferred petri dish for viruses, spyware and assorted Web muck. Just as Google came from nowhere to unseat the incumbent search engines – largely by word of mouth -- alternative browsers are poised to make a serious run at Microsoft this year. Walt Mossberg gave the nod to the Firefox browser in last week's column (also praising Safari and Netcaptor), noting that Firefox is "more secure and more modern" than Explorer. He's hardly alone in seeing strong challenges to Explorer. In his 2005 crystal ball, writer/blogger John Battelle predicts that Firefox will get 15% market share this year. Jace just switched over; plenty of others may follow.

It will be interesting to see if an eroding market share for Internet Explorer drives a reverse halo effect – the "forked-tail effect," if you will. Much of the exodus from Internet Explorer has been spurred by worries about viruses and spyware: If people abandon IE and find their Web experiences are improved, that might make them more likely to consider an alternative to Windows itself. One thing is clear: With computer security having become the stuff of anxiety and frustration for more and more users, 2005 will be a critical year for Microsoft's reputation.
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