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Negotiating Lessons From the Browser Wars

Many negotiators focus too intently on the parties, interests and options that are immediately evident “at the table.” The struggle involving Netscape, Microsoft and AOL over Internet browsers reveals why successful negotiators must take a much broader view both of “the other side” and of their own deeply held assumptions.” In 1996, the Web-browser wars became headline news. The conflict involved three of the most important companies of the early Internet era, Netscape, Microsoft and America Online. At stake was AOL’s choice of a browser for its online service: Netscape’s Navigator or Microsoft’s Internet Explorer. Microsoft’s apparent victory in this battle has inspired important books on antitrust, legal and business-strategy issues, but one area has gone mostly unnoticed: the negotiation among the players.

All negotiations can be examined in terms of a core of common elements, contends negotiation expert James K. Sebenius, but a select few shed special light on the process itself. The negotiation over Web browsers offers one such case. Drawing on the copious public record, the author provides thumbnail sketches of the players and a brief description of the dramatic process dynamics. He then draws a series of broader negotiation lessons suggested by this experience — about the need to assess the full set of parties, issues and no-deal options; about the benefits of crafting sustainable value-creating deals rather than value-claiming ones; about the risks of arrogance and biases; and about changing the game away from the table, not just playing it well at the table.

Netscape’s fall from dominance involved far more than faulty negotiation, and there’s no guarantee that a broader view of the negotiating process would have changed the company’s ultimate fate. But executives who find themselves in similarly thorny situations may be able to do themselves and their companies a great deal of good by looking beyond the mythical table that too often limits the possibilities inherent in any negotiation.

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