Microsoft was surprisingly prescient in attempting to move to the walled garden and attempting to control the stack from top to bottom. Although it never panned out, the original vision for IE and MSN was that Microsoft would get a piece of all sales that took place on the platform, be it physical or digital. IE being the standard browser also pushed adoption of things like FrontPage, IIS, and BackOffice, and all of the proprietary vendor lock-in features they carried with them. I'm not sure to what extent Microsoft ever really feared that web browsers threatened their OS monopoly, but viewed it more as a chance to carry their dominance into a new lucrative market.