Microsoft thus made no direct revenues on IE and was liable to pay Spyglass only the minimum quarterly fee.

[1] The user interface notably changes, with much larger buttons, with more intricate icons, and with a light gray design behind it.

[1] The competition between Netscape and Microsoft heated up, with some saying the Internet community "became polarized on the issue of which web browser had the most features.

"[10] Other new features included ActiveMovie multimedia API, HTML Layout Control,[11] Quick Links toolbar, VRML.

[12] Microsoft announced on July 29, 1996 that it would develop a native version of IE for "Solaris and other popular variants of UNIX" to be available "by the end of 1996" which would have "equivalent functionality as that provided in Microsoft Internet Explorer 3.0", thus "delivering on its commitment to provide full-featured Web browser support on all major operating system platforms" as well as "supporting and promoting open standards, including HTML, ActiveX and Java".

[17]) Now well behind schedule, the 3.0 branch was apparently scrapped in favor of 4.0 (that was released for Windows half a year earlier), which used the new MSHTML (Trident) rendering engine.

Backwards compatibility was handled by allowing Users who upgraded to IE3 to still use the last IE, because the installation converted the previous version to a separate directory.

[1] The Princeton Word Macro Virus Loophole was discovered on August 22, 1996, nine days after Internet Explorer 3's release, which could allow Webmasters to cause an end-user's computer to initiate downloads without their consent via a backdoor.

This release added support for HTML version 3.2, CSS,[21] Java applets and ActiveX controls.

Keith Mitchell of Macworld noted in November 1996, when discussing the IE mac version, "With the near-simultaneous release of Netscape Navigator 3.0 (415/528-2555, http://www.netscape.com) and Microsoft Internet Explorer 3.0 (206/882-8080, http://www.microsoft.com), both companies are tripping over each other to entice Web users to their products.

[24] MacUser's review noted "While Netscape Navigator 3.0 is more feature-laden and consequently bigger and slower than previous incarnations, Microsoft Internet Explorer has been refined and optimised into a Web browser that has almost as many features, but is both smaller and faster than its rival.

Because of a legal battle between Sun Microsystems (the developer of Java), Microsoft stopped offering it in 2001, although it was supported for several years after this (until the end of 2007).

[32] The last patch versions of Internet Explorer 3 supported 40-bit and 128-bit encryption, using Server Gated Cryptography (SGC).