MIT Sloan Management Review

Corporate Strategy, Leadership and Organizational Studies

 

Negotiating Lessons From the Browser Wars

By James K. Sebenius

July 15, 2002

Many negotiators focus too intently on the parties, interests and options that are immediately evident “at the table.” The struggle involving Netscape, Microsoft and AOL over Internet browsers reveals why successful negotiators must take a much broader view both of “the other side” and of their own deeply held assumptions.

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In 1996, the browser wars became headline news. The conflict involved three of the most important companies of the early Internet era: Netscape, Microsoft and America Online. At stake was AOL’s choice of a browser for its online service, either Netscape’s Navigator or Microsoft’s Internet Explorer. Microsoft’s apparent victory in this battle has inspired important books on antitrust, legal and business strategy issues, but the war seems endless. As recently as January 2002, AOL and Netscape filed suit yet again against Microsoft.1

For all the analysis that this triangular struggle has generated, one area has gone mostly unnoticed: the negotiation among the players. All negotiations can be examined in terms of a core of common elements — parties, interests, no-deal options, the possibilities for creating and claiming value, perceptions and psychological dynamics — but a select few shed special light on the process itself.2 The negotiation over Web browsers offers one such case. Drawing only on the copious public record, I will provide thumbnail sketches of the players and a brief description of the dramatic process dynamics — characterized by the Wall Street Journal as akin to TV’s “Melrose Place, where no bed goes unslept and no back unstabbed.” Then I will draw a series of broader negotiation lessons suggested by these process dynamics.

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