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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.

Maybe this alternate product would be have tons of collaborative features and be given away for free. It would probably be called Something Docs.... like "Google Docs" for example...

They wanted control of the browser because it (potentially) shaped the direction of the entire industry.

It does control the shape of the industry. HTML 5 is pretty huge and there are lots of 'Apps' and web services which are essentially complex HTML+Javascript pages. The catch is that the standards finally did catch on and rather than lose out to Netscape, they lost out to standards compliant sites.

Sadly, Microsoft has been by far the slowest company to adopt standards and they've deliberately left 40% of their users out of the upgrade cycle.
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