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Good thing they spent all that money on IE then

There was a point at which they feared the browser becoming an operating platform which could use any generic software a layer up. So Word, Excel, etc. wouldn't need to run on Windows, word processing or spreadsheet or whatever would run on a browser - and would be platform independent.

That would kill the "ecosystem" (to use a word in vogue today) that Microsoft built up between its OS and softwares, and make switching costs and friction fall to near zero.

They wanted control of the browser because it (potentially) shaped the direction of the entire industry. It didn't pan out that way, but it might have. Once they had hegemony and the network effect of proprietary formats, it became much harder to move in with a Google Docs or other freeware competitor.
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