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Microsoft on Tuesday officially released Internet Explorer 9, the latest version of its Web browser, with new privacy features. The software giant declined to confirm reports that it will soon discontinue its lukewarm-selling Zune music and video player.

For more than a decade from the mid-1990s through 2006, IE commanded an 80%-plus market share, and Microsoft did very little to improve it. But Mozilla Firefox, Google Chrome, Apple Safari and Europe’s Opera browser have been steadily eroding that dominance.

And as of Tuesday, you can download Mozilla’s Firefox 4 “release candidate” software, the latest version of the popular open source Web browser, which is nearing its official release.

IE still holds a 54.3% market share, followed by Firefox (17.8%), Chrome (9%) and Safari (5%), according to Net Applications. It remains to be seen whether IE9 — which only works on Windows 7 PCs; Windows XP users must stick with IE8 — can stem IE’s steady market share decline.

“In the long term, IE9 will help stabilize Microsoft’s share in browsers, assuming they can keep up with the fast pace of research and development coming from the open-source crowd,” says IDC software applications analyst Al Hilwa.

Hilwa also notes that one of IE9’s distinguishing capabilities is the inclusion of a “Do Not Track” privacy mechanism that’s similar to a privacy feature introduced by Chrome. Microsoft and Google have taken steps to block some advertising networks from monitoring everywhere you go on the Internet, referred to as “click-stream tracking.”

Instead of trying to block ad networks, Mozilla is putting finishing touches on a mechanism that notifies every website you visit not to track you. However, a new federal law probably is needed to compel advertisers to honor such notices.

By contrast, IE9 and Chrome aim to strengthen a blocking system set up years ago by a group of advertisers calling themselves the Network Advertising Initiative. But their respective tools block only a selected list of advertisers.

In a separate development, Microsoft declined to confirm reports that it plans to discontinue Zune this year. “We’ll share more information about the evolution of the Zune entertainment service and Zune hardware as future plans develop,” says Zune spokesman Peter Johnson.

Zune music and videos will likely continue on Xbox Live and Windows Phone 7 smartphones.

 

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