Browser Wars = Brand Wars

VS.

In its early days, internet browsing was a painful, bland experience. Many of us can remember (and feel like dinosaurs doing so) pay-by-the-minute pricing plans and that wretched screech as your 28.8 modem murdered—er, connected to—your phone line.

And in the beginning, there was WorldWideWeb, and it was good. Actually, it wasn’t all that great. In the coming years, WorldWideWeb became the de facto standard. Mosaic was developed by NCSA, becoming first in the category of World Wide Web browsers.

According to Mosaic's Wikipedia entry, “Marc Andreessen, the leader of the team that developed Mosaic, left NCSA and, with Jim Clark, one of the founders of Silicon Graphics, Inc. (SGI), and four other former students and staff of the University of Illinois, started Mosaic Communications Corporation. Mosaic Communications eventually became Netscape Communications Corporation, producing Netscape Navigator.”

In its glory, circa 1996, Netscape Navigator was the browser of choice for nearly 80% of all internet users.

Rival Spyglass licensed the technology and trademarks from NCSA for producing their own web browser.

In 1995, Bill Gates was quoted as saying that using the internet for personal reasons was a passing fad. Obviously, he has since recanted such a belief. In 1996, Microsoft bought Spyglass, and soon thereafter released Internet Explorer.

According to Wikipedia:

“By the end of the decade, Netscape's web browser had unquestionably lost its former dominance on the Windows platform. Even on other platforms it was threatened, both by the gradual rise of open source browsers and by the August 1997 agreement that resulted in an investment of $150,000,000 by Microsoft in Apple, which included a requirement that Apple switch the default browser in new installations of Mac OS from Netscape to Internet Explorer.

“Of greatest significance, though, was Microsoft's massive and ultimately successful campaign to get ISPs and PC vendors to distribute Internet Explorer to their customers instead of Netscape. This was helped in part by Microsoft's investment in making IE brandable, such that it was a quick operation to create a customized version of IE. Also, web developers increasingly used proprietary, browser-specific extensions in the web pages they wrote. Both Microsoft and Netscape were guilty of this behavior, having added substantial proprietary HTML tags of their own into their browsers, the result of which was that users were forced to choose between two competing, almost entirely incompatible web browsers.”

Microsoft force-fed America its version of the internet. But IE has never been a moneymaker for Microsoft. In all reality, it has been a huge drain on Microsoft’s bank account. Said John C. Dvorak of PC Magazine, “If you were to put together a comprehensive profit-and-loss statement for IE, there would be a zero in the profits column and billions in the losses column—billions.”

What is it costing Microsoft to keep their number one position? What does it truly benefit them?

Microsoft stands for the operating system category, not the web browser category. They are wasting time and effort by the truckload in order to keep their product in front of its competitors.

A poorly branded product may attain short-term success, but in the long run, it is the narrowly focused brand that wins. Netscape failed largely because they lacked quality. But also because Microsoft bullied their way (at a magnanimous loss) into the web browser category. Very few companies are forced to deal with a competitor who will sacrifice their own resources, taking losses in the billions, to try and dominate a category.

The truth of the matter is this: no matter how much quality exists in Microsoft's Internet Explorer, is doomed in the web browser category.

As long as they pump money into a losing brand, they will suffer losses, the likes of which the average company could not weather. But Microsoft is not your average company–they are Big Brother Part II.

IBM could not be all things to all people. And nor can Microsoft.

Antitrust lawsuits are needless. People are self-regulating. In a free enterprise society, no product will ever achieve a 100% market share. It's time for the people's champion.

Enter: the contender–Mozilla…

Home Depot vs. Focus

The Home Depot–the playground for a man's man. They are the leader in the category of "home improvement warehouse." Approximately 18% of the $700 billion annual market is shared between Home Depot and category number two, Lowe's.

But there is trouble in paradise. On January 2, 2007, then-CEO Robert Nardelli (dubbed "America's Most Overpaid CEO") was given the heave-ho to the tune of $210 million. This came after he had eroded the company's strong focus, giving rival Lowe's a foothold to gain on Home Depot.

The problem was, according to branding experts, one of focus. Nardelli stretched the company into areas which it did not dominate. He had a vision to expand the core, extend the business, and expand the market. To that, I say, "what?"

Aggressively, he purchased some 25 wholesale suppliers for $6 billion. That just doesn't make sense. What does a home improvement warehouse know about running a wholesale supplier?

When Nardelli took the helm at Home Depot, sales were 2.4 times that of Lowe's. Upon his corporate demise, sales were only up 1.9 times. That is unacceptable. Leaders lead. The gap between the number one and number two brands in a category should not shrink.

Al Ries, the world's foremost branding authority, wrote in Ad Age, "Why did Home Depot fail to keep pace with its smaller rival? I believe it’s because the chain violated one of the fundamental laws of marketing. The law of focus."

The Law of Focus states: the most powerful concept in marketing (or branding) is owning a word in the prospect's mind. Crest owns cavities. FedEx owns overnight. Lexus owns luxury. Sometimes one word won't do. In those cases, two words will also suffice. Domino's owns home delivery. Home Depot owns home improvement.

(Still, it is easier–and far better–to own one word than two. We are already inundated with bright ads, chirping cell phones, and overtime work shifts. The less clutter a brand offers, the more likely it will be remembered.)

If, then, Home Depot owns home improvement, why would they extend their brand into the wholesale supplier category? What does a home improvement warehouse know about wholesale supplying?

In the movie City Slickers, Jack Palance asks Billy Crystal, "Do you know what the secret to life is?"

Crystal responds, "No, what?"

"One thing, just one thing. You stick to that and everything else don't mean sh*t."

"That's great, but what's the one thing?"

"That's what you've got to figure out."

Home Depot has begun to realize the error of their ways. On June 19, 2007, they sold their supply company, HD Supply, for a pretty $10.3 billion dollars. Home Depot's board also approved a $22.5 billion share repurchase.

It appears that Home Depot is refocusing their business on their core strength. According to the Washington Post, "The struggling retailer now plans to focus on improving its stores to keep up with its high-performing rival, Lowe's."

What once made Home Depot great was its unparalleled customer service. “Mr. Nardelli moved to cut back on higher-paid full-time employees with experience as plumbers or handymen,” reported The Wall Street Journal, “and to rely more on part-time workers with less experience answering home-improvement questions from customers.”

A narrow focus can often times mean taking a hit in the short term. Home Depot is already planning to shell out $2 billion to improve its customer service, which will be done by putting more experts in stores and enhancing inventory.

Home Depot is no stranger to a wandering focus. In 1991, they developed Expo Design Center. This is a high-priced kitchen and bath-based store. Today there are only 34 stores in existence. In 1995, they introduced Home Depot CrossRoads. These stores tried to function as a tractor-and-tire hub for rural areas. In 1999, they rolled out Villager's Hardware, a me-too retailer that tried to go up against Ace and True Value.

A company should not look to extend their brand, they should look to deepen its penetration. Home Depot should focus on how it can take a greater share of the category, one, and two, make the $700 billion annual category even bigger. Being the leader, they will get the heftiest chunk of that expansion.