Microsoft rolled out a test version of its upgraded Internet Explorer browser Tuesday, marking the biggest change to IE in more than half a decade and sending a message to competitors that the software giant isn’t ignoring the browser market.

rolled out a test version of its upgraded Internet Explorer browser Tuesday, marking the biggest change to IE in more than half a decade and sending a message to competitors that the software giant isn’t ignoring the browser market.

In the latest version, the Redmond giant built in a search box, enhanced the browser’s security, and introduced new features like tabbed browsing, which allows users to better manage simultaneous surfing of a number of web sites.

With the release of the second beta version of the IE browser “IE7” to developers, Microsoft is seeking feedback on the software’s stability and compatibility with various web sites (see IE Beta Code Leaks onto Net). The first beta version of the browser was released to selected technical members of the Microsoft community last summer.

IE Beta Code Leaks onto Net

Microsoft’s Internet Explorer browser is the industry leader and has about 85 percent of the market share. But it faces growing competition from upstarts like Opera and Firefox (see Opera Adds Free Cell Phone Browser and Firefox Upgrades its Browser).

Firefox Upgrades its Browser

Among the other changes Microsoft has made to its upgrade, one feature will make it easier for users to read RSS (Really Simple Syndication) feeds by clicking on an icon on the browser that will automatically add the feeds to the favorites folder on the browser.

“We really think it’s one of the biggest updates to IE in the past decade,” said Margaret Cobb, group product manager for Internet Explorer. “[We] really listened to what our customers were saying and focused on three areas: security, making the tasks they do easier, and improving the platform for developers.”

IE’s Big Step

With IE7, Microsoft has also taken steps to enhance the security of its browser. The company has incorporated a filter that will protect users from phishing, which are fraudulent emails. The company has also enhanced the tools to stop malware.

On the design front, it has also revamped the user interface to make IE7 sleeker and easier to navigate.

“A lot of the features are under the cover so users really won’t see them but they will see the alerts that will inform them that they are being protected,” said Ms. Cobb.

Microsoft said it plans to ship IE7 along with Vista, its upgrade to the current Windows XP operating system, in the second half of the year (see Microsoft Upgrades Vista). It originally planned to create the IE7 browser just for the Vista operating system, but now will release a version for the Windows XP SP2 version of its operating system.

Ms. Cobb said development on IE and the latest release shows Microsoft is determined to retain its position as the market leader among browsers.

“Microsoft believes that the Internet is part of the future,” she said. “We are investing heavily in Internet Explorer and see it as an important part of our strategy.”

Impact on Firefox

Except for security updates, Microsoft left its IE browser unchanged for nearly four years. The current version of Internet Explorer dates back to 2001, when Microsoft released the last major overhaul to IE.

IE’s stagnation has provided a significant market opportunity for alternative browsers like Firefox and Opera.

“IE has been frozen for a number of years largely at the request of large corporations that didn’t want to upgrade and impact the stability of their systems,” said Rob Enderle, principal analyst with the Enderle Group, a San Jose, California-based technology consulting and advisory firm. “The result was that new browsers were able to spring up and begin taking market share.”

Most significant among those browsers is Firefox, distributed by the Mozilla Corporation. Firefox, which was first released during 2002, now has more than 10 percent of the market share, a significant feat considering Microsoft’s stranglehold on consumer software and its strategy to bundle the browser with its widely used operating system.

The re-emergence of Microsoft in the browser market will mean that alternatives like Firefox will have to work harder to entice users to move away from IE.

“Firefox has been the browser to watch with broad inroads into the overall market but they now will have to step up to the game,” said Mr. Enderle. “Microsoft is signaling that this is just the beginning of another round of the game.”

Firefox executives were not available for comment.