Microsoft’s (MS) Internet Explorer (IE) Web browser lost ground consistently to Mozilla’s Firefox and Apple’s Safari last year.

Year-end figures from research firm Net Applications also showed that Google’s new Chrome browser, launched last fall, made steady gains but remained well back of the IE’s two principle challengers.

Specifically… IE started the measurement period, last March, at 70.8 per cent of the browser market by actual usage and ended up, at the ends of last month, at 67.5 per cent. By contrast, Firefox rose more than 3.5 per cent in overall popularity and Safari use increased almost 2.5 per cent over the same period.

Opera use remained more or less stable in 2008, at around 0.7 per cent of the market, according to the Net Applications figures.

While MS still controls the lion’s share of the market, the report confirms that challengers continue to erode what was once a virtual IE monopoly on the browser scene. While MS may feel its grip on the market slipping, industry observers say the presence of strong competition is healthy: Real competition will not only keep MS on its toes but will also ensure the availablity of viable alternatives should the MS monster stumble.

The danger of relying on a single source for vital products and services was brought home abruptly last weekend to millions of Internet users when search giant Google temporatily branded all Web sites appearing in its search results as possibly malicious and dangerous to visit. It was a small problem with big repercussions, ultimately put down to human error. But it caused widespread confusion — in some cases, panic — among users and Web site proprietors.