One of the most important outposts that Microsoft (MSFT) has on the internet is its browser, Internet Explorer. The huge majority of people who visit sites online use the Redmond product for access and movement around the web. The lists of consumer “favorites” on IE comes pre-loaded with web destinations from Microsoft and its partners. Internet Explorer is where online security is set by consumers and where “cookies” which track web behavior can be viewed and deleted. The software also stores the user’s history of sites visited.

Microsoft’s main browser competitor, Mozilla, is coming out with a new version of its product, and it could help drives its 18% share of the market even higher.

According to The New York Times “With tasks like e-mail and word processing now migrating from the PC to the Internet, analysts and industry players think the browser will soon become even more valuable and strategically important.”

Mozilla’s new product will be faster at accessing websites and will use less PC processing power.

Microsoft has already lost the search engine war to Google (GOOG). It web portal, MSN, is behind Time Warner’s (TWX) AOL and Yahoo! (YHOO) in its audience for a number of key content segments like money and finance.

What the world’s largest software company does not need is more online competition. But, things aren’t working out that way.

Douglas A. McIntyre