Microsoft makes note of browser rival

In its annual report, Microsoft has for the first time taken note of the competitive threat posed by the open source Firefox browser.

The mention came in a section on competition for the Client unit. In that section, Microsoft noted not only its traditional operating system rivals such as Unix and Linux, but also rivals for various components that are a part of Windows, such as its media player.

"Competitors such as Mozilla offer software that competes with the Internet Explorer Web browsing capabilities of our Windows operating system products," Microsoft said in the report, which was filed Friday with the Securities and Exchange Commission.

The company sounded an upbeat note nonetheless, saying that it believes both current and future versions of Windows will "continue to compete effectively with non-Microsoft browsers, media players, and other non-Microsoft programs."

"We believe our operating system products compete effectively by delivering innovative software, an easy-to-use interface, compatibility with a broad range of hardware and software applications, and the largest support network for any operating system," Microsoft said.

The Mozilla mention was spotted earlier by Seattle Post-Intelligencer writer Todd Bishop in his Microsoft blog. Bishop also noted some new language in the security section.

Microsoft has long warned that flaws are a risk, but Bishop points out some new language that suggests perhaps Microsoft may be concerned about the legal liabilities on that front.

"While our license agreements typically contain provisions that eliminate or limit our exposure to such liability claims, there is no assurance these provisions will be held effective under applicable laws and judicial decisions," Microsoft said in the filing.

The user licenses used by Microsoft and others have created an uphill battle for anyone wanting to sue software makers over flaws.