Well, they fought hard until IE6.

Then they took their eyes off the ball - whether it was protecting the Windows fort (why create an app that has all the functionality of an OS that you give away for free - mostly on Windows, some Mac versions, but no Linux support) when people are paying for Windows OR they just diverted the IE devs to some other "hot" product, browser progress stagnated, even with XMLHttpRequest.

Which is kind of a bummer - it'd have helped the standards based web to have an actual powerful entity maintain a distinct implementation. Firefox is on life-support and is basically taking code from Blink wholesale, and Webkit isn't really interested in making a browser thats particularly compliant to web standards.

MS's calculus was obvious - why spend insane amounts of engineering effort to make a browser engine that nobody uses - which is too bad, because if I remember correctly they were not too far behind Chrome in either perf or compatibility for a while.