They were a little late, but did have the dominant browser for most of the 2000's. To say they "missed the boat" is a bit much. There was a dark period from 1999 to 2004 or so where IE was basically the only usable browser.
By offering it for "free" as part of the OS. Which they could only do because they never intended to pay the developers who wrote it.
In a classic Microsoft move they fucked over their competition, their partners and the entire ecosystem for well over a decade.
Plus during this time there was little competition on the desktop market in general. iPhone and smart phones, and the Apple resurgence, was yet to come.
Netscape 4.x crashed every 20 minutes. Mozilla (before Firefox) was barely usable. Chrome was no where to be seen yet.