The classical debate in economics has been whether the market always produces the "best" outcome. Best can be defined in different ways. In one stream of the debate, "best" has been defined as "technologically superior" (again, a term that can be defined differently). So, does the market always lead the "technologically superior" outcome, or can economic actors take actions to influence the market outcome so that a "technologically inferior" outcome arises?
We conclude that while both technological progress (measured by releases of newer and better versions of browsers: version 1, version 1.1, version 2, etc.) and strategic actions (distribution browsers with PC purchases) increase the rate of diffusion of browsers into the population, the strategic actions (distribution or restrictions on distribution in the case of Netscape) are twice as important as technical progress.
Channels vs. Superior Product
From an interesting interview with Pai-Ling Yin, assistant professor in the Strategy unit at Harvard Business School, we learn about the relative importance of distribution channels vs. technology progress in the larger context of technology diffusion. Simply put, distribution channels are twice as important as "technological superiority". Here's an excerpt:
Read on by following this link and also learn about the importance of first- vs. second-mover advantage. It looks like there is little hope for non-IE browsers (e.g. FireFox), yet I do not want to take such conclusion for granted.