Microsoft is fighting to gain lost ground on the Net. Joseph Gallivan reports
Ten days ago Bill Gates took to the lectern in Seattle, armed with steel glasses and fake spontaneity. The air was thick with sycophantic laughter but his message was clear. Mea culpa, he said. I have failed to realise the importance of the Internet. I now repent and I am going to blow those of sons of a gun at Netscape out of the solar system. "The sleeping giant has been awakened," he said.

Behind the broadsides was a barrage of accurate sniper fire. Together, it amounted to an extremely impressive series of upgrades to Microsoft's software designed to help it catch up in what Gates himself calls the "Internet gold rush".

The most high-profile software in the Net is the World Wide Web browser, which displays all those pretty graphics. As more than 70 per cent of browsers are Navigators produced by the upstart Netscape, Microsoft's own Internet Explorer has come to be seen as second-rate. Version 2.0, however, as demonstrated in Seattle, supports marqueed (moving) text, different colours and fonts, and three types of secure transaction. Through fictitious homepages, we were shown how the Web could look, when it is all-singing and dancing, full of 3-D animation, sound and video. The "Looks Better When Viewed With Explorer 2.0" is a button you should see appearing on many homepages.

The place to get and use Internet Explorer is the Microsoft Network. This nice-looking, but cumbersome online service has now acknowledged the dominance of the Net and put part of its content on the Web for free access. Currently in test form is a customisable MSN welcome page, on which you can fill in your name, preferred news services and topics (sport, weather, entertainment etc), and so be greeted with stock quotes, headlines or TV listings for your area. This is the closest anyone has come to the fabled electronic newspaper for the mass market, and seems straight out of the pages of Gates's book, The Road Ahead (or Nicholas Negroponte's Being Digital, for that matter.)

Microsoft's strength is its huge installed base of Windows and Windows NT users. When another company brings out something new, only the early adopters are likely to go out and get it. Microsoft can rely on a huge take-up, which is why it can attempt great leaps in technology.

One of its more radical plans is to abolish the distinction between Local Area Networks - office computer networks - and the Internet. Users of its Word for Windows 95 wordprocessor will be able to click on a word within a document and leap to another document, just as they can on a Web page. But they will not know whether they are going to another part of the LAN, or into the Net. This sort of seamlessness is bound to have mass appeal.

Demonstrations made Word, and the Microsoft Office suite it comes with, look positively futuristic. Spreadsheets were presented as 3-D skyscrapers over a map of California; the perspective moved all the time. Two workers were shown working on the same document simultaneously, with different coloured cursors, over a network. Later, it became clear you no longer need to hire a geek to get your personal Netpages out - you can write your dreary diary and precious poems in Word, laying them out with all the style and flair you desire, then use Internet Assistant 2.0 to save them automatically as Web pages.

Netscape was on everyone's mind. But whatever its share price, it works in a narrow field of Web software and cannot do much when the giant stirs, except run for its life. As Bill Gates said, talking about the inevitable convergence of Netscape's browser and his own, "Everything gets cloned in the end."

After 17 demonstrations it was obvious that Microsoft has many fingers, and that the Net is just another pie it can put them into. From the looks of things, it is ready to pull out a few plums.