Microsoft built the first versions of Internet Explorer on Mosaic browser technology it licensed in 1995 from Spyglass Inc., under a deal giving Spyglass a quarterly fee plus a percentage of Microsoft's browser revenue. Microsoft then bundled Internet Explorer into Windows for free — generating essentially no direct browser revenue and so paying Spyglass only the minimum quarterly fee, a fraction of what the smaller firm had expected. After Spyglass complained and threatened an audit, Microsoft agreed in January 1997 to convert the arrangement into a fully paid-up license for an additional $8 million. The episode became a textbook example of how Microsoft used the leverage of free bundling to undercut a partner, foreshadowing the browser tactics at the heart of its antitrust case.