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372. In summary, the estimates on which Microsoft and AOL relied and the measurements made by AdKnowledge and the University of Illinois provide an adequate basis for two findings: First, from early 1996 to the late summer of 1998, Navigator''s share of all browser usage fell from above seventy percent to around fifty percent, while Internet Explorer''s share rose from about five percent to around fifty percent; second, by 1998, Navigator''s share of incremental browser usage had fallen below forty percent while Internet Explorer''s share had risen above sixty percent. All signs point to the fact that Internet Explorer''s share has continued to rise --- and Navigator''s has continued to decline --- since the late summer of 1998. It is safe to conclude, then, that Internet Explorer''s share of all browser usage now exceeds fifty percent, and that Navigator''s share has fallen below that mark.

373. These trends will continue. In February 1998, Kumar Mehta, the Microsoft employee responsible for tracking browser share, told Brad Chase that Microsoft''s best model projected that Internet Explorer''s usage share in early 2001 would stand between sixty and sixty? eight percent. This comports with the forecast on which AOL relied in deciding to purchase Netscape: The report presented to AOL''s board of directors prior to their vote on the transaction predicted that Navigator''s usage share would fall to between thirty?five and forty percent by late

2000. The most reasonable prediction, then, is that by January 2001, Internet Explorer''s usage share will exceed sixty percent while Navigator''s share will have fallen below forty percent.

374. Navigator''s large and continuing decline in usage share has demonstrated to developers the product''s failure to mature as the standard software used to browse the Web. Internet Explorer''s success in gaining usage share, together with the lack of contenders other than Navigator, has simultaneously sent the clear message to developers that no platform for network? centric applications can compete for ubiquity with the 32?bit Windows API set.

2. The Cause of the Change in Usage Shares

375. The changes in usage share described above would likely not have occurred had Microsoft not improved its browsing software to the point that, by late 1996, the average user could not discern a significant difference in quality and features between the latest versions of Internet Explorer and Navigator. As Microsoft''s top executives predicted, however, Internet Explorer''s quality and features have never surpassed Navigator''s to such a degree as to compel a significant part of Navigator''s installed base to switch to Internet Explorer. An internal Microsoft presentation concluded in February 1998 that ``[m]any customers see MS and NS as parity products; no strong reason to switch,'''' and another internal review three months later reported, ``IE4 is fundamentally not compelling'''' and ``[n]ot differentiated from Netscape v[ersion]4 --- seen as a commodity.'''' For a time, even among new users, Navigator was likely to win most choices between comparable browser software, because most people associated the Internet and cutting?edge browsing technology with Netscape rather than with Microsoft. So, if Microsoft had taken no action other than improving the quality and features of its browser, Internet Explorer''s share of usage would have risen far less and far more slowly than it actually did.

While Internet Explorer''s increase in usage share accelerated and began to cut deeply into Navigator''s share after Microsoft released the first version of Internet Explorer (3.0) to offer quality and features approaching those of Navigator, the acceleration occurred months before Microsoft released the first version of Internet Explorer (4.0) to win a significant number of head?to?head product reviews against Navigator. This indicates that superior quality was not responsible for the dramatic rise Internet Explorer''s usage share.