Bill Gates could lose to the Internet company Netscape. What strategy helped the founder of Microsoft to destroy a competitor

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“Business is a battle. Your opponent is hungry, determined, scandalous. How are you going to defeat him? ” – Asks in the book “The Art of Business War” business journalist David Brown. To find the answer, the author collected cases of fierce competition between companies that needed a market monopoly rather than market share.

The book on the “battles” of Brown’s companies was inspired by the work of Chinese General Sun Tzu “The Art of War.” This warrior was most interested not in battle. Sun Tzu focused on alternatives – avoidance, alliance, intimidation and deception, Brown explains.

To win over an opponent, it is important to choose a winning strategy. Billionaire Bill Gates did just that. In 1995, he was concerned about the presence in the market of a powerful player – Netscape Communications – which attracted more users than Microsoft products. One of the richest people in the world managed to win the battle thanks to his own vision, audacity and planning.

Forbes publishes an excerpt from Brown’s book The Art of Business War. Lessons from Past Conflicts for Entrepreneurs and Leaders “, published by Laboratory in 2021.

Netscape vs. Microsoft

A new battlefield means new rules. In a note on the tidal wave, Gates said he was most concerned about competition from one particular Internet-born browser: Networks will become popular… Internet fans are discussing one scary possibility – whether they should come together and create something much cheaper than a personal computer, and powerful enough to browse the Web.

Gates was worried not only that he might miss the Internet. He prophetically suggested that one day this primitive technology could displace all of Microsoft’s flagship products, even the Windows operating system itself.

To defeat Netscape, Internet Explorer needed priority: “We need to match their proposals and overcome them.” This was not easy: by the summer of 1995, Netscape was synonymous with browsing.

The program had 10 million users, one in five online in the world at the time. And all this when less than half of Americans have heard of the World Wide Web. Gates could only imagine what Netscape would be like when the Internet became ubiquitous.

Gates’ first plan was to swallow Netscape completely. At a four-hour meeting at Netscape’s headquarters, Microsoft offered to invest in Netscape and make it the default browser in all previous versions of Windows.

In response, Netscape had to give way to the next Windows 95 and all subsequent versions of this operating system in favor of Internet Explorer. In fact, there were many more computers with previous versions of Windows, but everyone understood that Windows 95 represented the future of the company. By agreeing to this agreement, Netscape would lose its own future.