(FORTUNE Magazine) – The browser wars, which eventually led to antitrust charges against Microsoft, didn't stop when the U.S. government took Bill Gates' company to court. Every six months or so, Microsoft and Netscape still publish new versions of their Internet software. Traditionally, these introductions are exercises in one-upmanship, with trumpeted new features then matched by the competitor in its next version.

But with the introduction of Internet Explorer 5.0, Microsoft has taken a new tack--one I hope it will extend to the company's other software products. Instead of just adding features to its browser, the company has actually subtracted a few! An escalating cycle of features has been the hallmark of the software business ever since young Bill Gates bought DOS and resold it to IBM. In fact, in my last column (FORTUNE, March 29), I grumbled that the latest beta version of Microsoft's Office 2000, which will be introduced later this year, is one more example of bloated software. Well, I'll be the first to admit it: Microsoft has made Internet Explorer leaner, and perhaps better, in version 5.0, which became available March 22. (You can download a copy, or an upgrade to your earlier version, at windowsupdate.microsoft.com).

The big subtraction is the Active Channels, which used to clutter your desktop with icons. The icons are now gone. You have to hand it to Microsoft: It has conceded--quietly, of course--that its version of push technology was as bad an idea as everyone else's. Channels put various news providers right on your desktop. By clicking on an icon, you pulled up a page full of the latest content from that site. But most of the sites called up this way delivered nothing more interesting than what you could get from going to the site in a standard way. Active Channels also happened to slow your PC to a crawl. In IE 5, Microsoft jettisoned this dead weight.

Who pushed Microsoft into believing that light was right? It was not Netscape, but another browser called Opera. Like Linux, the maverick operating system that's all the rage among techies, Opera is a shareware product developed in Scandinavia (is it something in the fjord water?). Opera made a big splash last year among Web aficionados because it was fast and small--images and pages just popped right up on your screen. Enthusiasm cooled a bit when users realized that Opera didn't support Java and lacked some fancy features users took for granted. But clearly the folks in Redmond learned something from the appeal of that nimbler browser.

Of course, you won't mistake IE 5 for a Metro Geo. There are, in fact, a few additions (Microsoft wasn't built in a day). Most are pretty interesting. The most visible addition is to the toolbar, which now has a button for Internet radio. Clicking on it gets you access to many of the radio stations that broadcast over the Net. Of course, the radio button launches Microsoft's media player, not the competition's Real Player, but that doesn't surprise you, does it?

Another neat new feature is the Search Wizard, which helps you pick the right search engine. It's a list of buttons for different searches. If you indicate you want to find a street or e-mail address, IE drops you into Bigfoot, one of the largest collections of addresses on the Internet. It uses Alta Vista (a new Microsoft partner) for Web searches, and you can get a map through ExpediaMaps, from Microsoft's own travel site. (Is there a pattern here?)

To help improve your searches, Microsoft has acquired technology from Alexa, which catalogs "related" sites. When I looked at the Financial Times, I was offered Barrons, the Wall Street Journal, and Forbes--but not FORTUNE (the software obviously needs work).

Tired of retyping URLs you didn't save as bookmarks? Microsoft has added auto correction to IE 5. If you misspell an address, it'll show a list of sites you've visited that are close matches.

Rob Bennett, product manager for Internet Explorer, claims that version 5.0 is up to 75% faster than Netscape's Communicator 4.5, the competitor's most recent version. I found the beta version snappy, if not screaming fast.

While I've been wowed by very few of Microsoft's products, Outlook Express, the e-mail component that comes with Internet Explorer, is an exception. Express was good at the start and continues to get better. Besides giving you a terrific e-mail program, it does a nice job of allowing you to read newsgroups, the thousands of lively discussion sites on the Internet.

Of course, Netscape has not taken all of this lying down. Being acquired by AOL must be distracting, but the company released an updated version of Communicator 4.5 in mid-March. Communicator's features closely parallel those of IE 5. Its What's Related button, which also relies on Alexa, showed me the same sites when I visited the Financial Times. But Communicator 4.5 is not as significant an upgrade as IE 5. Word is that Netscape is switching to a modular design in the next version. It seems that slim is catching on.