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Original web browsers were applications designed to view static web content. As web sites evolved into dynamic web applications that compose content from multiple web sites, browsers have become multi-principal operating environments with resources shared among mutually distrusting web site principals.
Nevertheless, no existing browsers, including new architectures like IE 8, Google Chrome, and OP, have a multi-principal operating system construction that gives a browser-based OS the exclusive control to manage the protection of all system resources among web site principals.
The battlefield is laid out - and they mean to Google one better!
[If you don't think Chrome is superior, try running some massively huge AJAX apps in other browsers, but I digress.]
I've actually been on the receiving end of major MS FUD more than once in my career and the best thing Google can do is ignore it because they have a leg up, keep giving customers what they want and need, and ignore the noise.
The noise is just intended to slow down the competition.
I tried to read it but I stumbled on a what I know from my own experience to be untrue (like the table claiming IE7 is faster than Chrome), and then it kicked back into gear: this is research by a company well known for IE6 (a plain nightmare for us CSS people) and for its recently released IE8 (that totally ignores CSS3 and therefore will become the next stumbling block for many years in the road to using CSS3 effectively).
So whatever good in there, why don't they focus on fixing their currently deployed browsers first ?
Afther they get IE6 fixed, IE8 supporting as much as possible from CSS3 -at least to the level of other current browsers-, I might be tempted to read how much better their future lab contraption might be, till then: I don't really care, as what they have crafted and is used out there is the cause of more trouble than any other browser in current use.
MS needs to understand that as long as 0-day exploits against its current browser keep emerging quite regularly, its priority should be to disable once and for all any functionality that has to do with "multi principal operating environments" - it was a horrible idea in 1996, and it's still as dumb today.
Today's Excel exploit only being the latest in a series...