“For both software companies, a deal with America Online, which had five million subscribers at the time, could mean a big surge in browser use and market share.
Netscape seemed the natural partner for America Online, since both companies were Microsoft rivals. On March 11, America Online did announce that it would buy Netscape technology, but it was a standard licensing deal based on a payment-for-use formula. The next day, America Online announced a more significant deal with Microsoft making its browser the default technology — the browser America Online subscribers would use unless they specifically asked for Netscape’s Navigator.
To win the deal, Microsoft offered to give America Online a start-up icon on the Windows desktop — precisely the kind of equal treatment on the main Windows screen that Case had asked the Justice Department to require of Microsoft. “After we agreed to its Internet Explorer browser, Microsoft allowed us to be bundled on the Windows desktop,” Case said. “It was an example of Microsoft’s pragmatic side.”
–From Michael Parekh, writing on how AOL may have failed to do an equity acquisition deal with Google or Yahoo or Microsoft, and so might dump Google adwords to team up with Microsoft against the big G–and recalling 1998’s browser bait and switch games.