Out of curiosity, though, why is browser share so important? Both IE and Firefox, as well as the other competing browsers of which I'm aware, are given away free (and in the case of IE included free on every PC sold). Why would either care about market share of a product that earns no revenues? I think if I were MS I'd leave very simple browser functionality in Windows. It could be limited to viewing HTML in a My Computer window or something, that would be secured because it wouldn't support Java, ActiveX, or anything else that could contain malicious code. Get rid of IE, reassign the employees on the IE project to areas that generate revenue, and let other people make advanced web browsers for free.
Microsoft is worried about it because if you decide to shift from the built-in Microsoft product to Firefox, you might decide you like it better. And if you like Firefox better for the critical task of web browsing, you're more likely to give OpenOffice or something else a try for your word processing and spreadsheet needs, and not Microsoft Office.
Microsoft makes almost nothing off Windows, and a lot of money off of Office.
It wouldn't matter if all browsers seamlessly conformed to open standards. However, when some browsers (cough IE cough) do not play well with others in that regard, then web site developers need specialized tools to insure that their sites render correctly. Those tools aren't given away free.
For obvious reasons, this only works as a revenue model if your browser has a near-monopoly on the market -- if most people aren't aware that there are other browsers, failure to render is perceived a problem with the web site that didn't buy IE support; if most people have heard of alternatives, failure to render is (more accurately) perceived as a problem with the browser.
That's what does it for me. The security and popup protection is a bonus.
I use ~25 extensions that make my Firefox a joy to use. Maybe IE 20 will have what I need. By then I'll be fertilizer.
Because Microsoft has a lot of its future tied up in browser based applications. If you look at the Outlook web client, you will see the future according to Microsoft. Web based applications that have the look and feel of apps running on your PC.