Browser Wars II? It's much more important than that

AOL may be about to dump Microsoft's Internet Explorer (IE) and use the Netscape web browser when it releases AOL 7.0 later this year. The only eyebrow-raising element of such a move is that it hasn't done so sooner.

The rumours are long-running but gained credibility yesterday following AOL's decision to include Netscape in the new version of CompuServe software. AOL bought CompuServe through a complex deal in 1997 and then when Netscape Communications put up the For Sale sign in 1998 AOL took the browser and Netscape.com portal while Sun Microsystems bought the server-side software.

The point always was that while AOL introduced millions of its subscribers to the IE product (over 30 million and counting), Microsoft introduced millions of its Windows users to a handy AOL icon on their computer desktops (don't ask us how many million).

Now, if you haven't noticed, the giants that are the AOL Time Warner and Microsoft empires aren't the best of friends. In January, AOL said it will sue Microsoft for illegal tactics during the famous browser wars of the late 1990s that saw Microsoft come to dominate that market. Earlier, with the launch of Windows XP, fewer desktops found themselves automatically graced with AOL.

So we're set for Browser Wars II. Like all sequels, it will have a bigger budget, feature more explosions and be a bit predictable. Only the stakes are higher.

Getting users onto the web via IE will help Microsoft roll out its .Net platform for web services, the complex tapestry of software that will connect together all kinds of B2B and B2C interaction, hopefully seamlessly.

Having AOL take users online with non-Microsoft software is an inconvenience for Gates and Co. Other competitors will do other things to harm Microsoft on this front.

The big story here isn't Browser Wars II - it's Web Services Episode I. We've said it before, but it's now it's all kicking off.