Microsoft's Worst Nightmare
By Om Malik

(Business 2.0) – Blake Ross is lounging at his parents' Florida Keys condo, thinking ahead to his first day back at Stanford. His goal for his sophomore year: nothing less than to "take back the Web" from Microsoft.

You might think the shy 19-year-old is outmatched. Think again. Ross, a software prodigy who interned at Netscape at age 14, is the lead architect behind Mozilla's Firefox—a revolutionary new browser that's catching on the way Mosaic did in 1993. In beta for the past four months, Firefox version 1.0 is set to be released in November. With that, Ross will issue the first truly formidable challenge to Internet Explorer that the world has seen in seven years.

"We're hoping for 10 million downloads in 10 days," Ross says proudly.

That's not sophomoric hype. Firefox, a free open-source browser that loads twice as fast as Internet Explorer, has already been downloaded 2.7 million times, and it has siphoned off nearly 2 percent of Microsoft's browser market share, now at 93.7 percent. Along the way, Firefox is fast becoming the browser of choice for anyone fed up with all the nasty things polluting the Web (pop-ups and viruses and spyware, oh my!). Google is rumored to be building its own browser based on the Firefox framework, and entrepreneurs are churning out hundreds of microprograms for it (see "The Spawn of Firefox," below). A minister in Kentucky is even exhorting his flock to switch to Firefox because it blocks those pesky Viagra ads.

It all adds up to a business opportunity for startups, established software companies, and Web giants alike. Though Ross and the nonprofit Mozilla Foundation don't stand to make money, Firefox's open platform gives it enormous potential to hatch a new class of applications that live on the desktop but do business on the Web. Amazon could build a search application into the browser that lets users buy books without visiting its website. Google could make Web-based Gmail accounts behave like desktop applications such as Outlook. Word processing, calendar applications—virtually anything could be programmed right into Firefox.

It's a roundabout way to challenge Microsoft's Windows monopoly—attempting to refashion the Web itself as an operating system where every bit of software is controlled through the browser. If that sounds hauntingly familiar, it's because you've heard it before: Ross's wunderkind forebear, Netscape co-founder Marc Andreessen, boldly predicted in 1995 that his browser would make Windows obsolete. Of course, it didn't quite work out that way, and Microsoft used its lock on the operating system to crush the upstart.

Mozilla was born of the wreckage of that first battle of the browsers. Netscape opened its code in March 1998, reasoning that if open-source programmers could improve the browser, it might retain or even win back market share. But in 1999 Netscape was sold for $10 billion to America Online (which, like this magazine, is owned by Time Warner). Under AOL's watch, the browser got more bloated and even less popular.

Meanwhile, the Mozilla project kept tinkering with the code to make it lighter and nimbler. (One of those tinkerers was Ross, whose bug-fixing skills led to the Netscape internship.) As AOL laid off engineers, volunteers picked up the slack, and from the ashes of Netscape arose a new browser, code-named Phoenix. Less than a year after Phoenix's September 2002 debut, AOL got rid of the remaining Netscapers and gave $2 million to the Mozilla Foundation to keep the project alive. But Ross and a fellow Mozilla coder, David Hyatt, weren't content just to tinker with Phoenix. They were determined to transform it into an IE killer. "It was high school by day and Mozilla at night," Ross recalls.

In its first iterations, Phoenix caught on only with hard-core techies. But hundreds of coders across 24 time zones kept banging on it, making it smarter, faster, and prettier. Its big moment came this June, when yet another Explorer-borne virus outbreak prompted the U.S. Computer Emergency Readiness Team to advise government agencies to stop using the Microsoft browser. Coincidentally, the first truly stable version of Phoenix—now renamed Firefox—had just come out. Bingo.

Firefox got rave reviews from the digerati and began spreading like wildfire to corporate America. "Over the last six months, many Fortune 100 companies have started using Firefox," notes Chris Hoffman, director of engineering for Mozilla. "People are realizing that it's a very stable program."

Companies around the world have also started using Firefox's technology to develop applications. They range from Edvisors Network, a Quincy, Mass., student loan company that developed an application for loan management, to TV New Zealand Interactive, which cobbled together a content management system.

But the biggest opportunities reach far beyond the walls of corporate offices—and most have yet to be discovered. That's why Firefox is likely to inspire countless startups selling programs based on it. One of those, called Cenzic, has built an entire business around Firefox, selling a tool that scans e-commerce and financial firms' networks for security threats. CTO Ambarish Malpani built the prototype on Internet Explorer, but found it hard to work with. "If you run into a problem with Explorer, you have no control," he says.

Microsoft has promised that its next operating system, dubbed Longhorn, will include a framework that lets users build Web applications much the way Firefox does. Though the company declined to discuss specifics, a spokesperson said Microsoft doesn't see Firefox as a threat: "Most people, whether they are end users, IT professionals, or Web developers, still see IE as their best choice." But Longhorn doesn't hit shelves until 2006, and by then it may be too late. As more upstarts like Cenzic flood the market with add-ons, Firefox will only grow more powerful. Just ask San Francisco-based Web developer Chris Pederick, who's created a free tool kit that makes building Web applications in Firefox easy. "There is a lot more at stake here than Microsoft admits," Pederick says. And this time around, there's no rival corporation for Microsoft to crush—just millions of PC users downloading Firefox. That, and a really smart 19-year-old who's just getting started. — OM MALIK