Nearly two thirds (64 percent) of under 18s have been contacted by a stranger online, says Microsoft.
Research by the tech giant also revealed that 41 percent of parents don't know if their child has privacy settings enabled on their social networking profile, while 58 percent of kids claim their parents do nothing to limit or monitor what they access on the web.
As a result, Microsoft has joined forces with the Child Exploitation and Online Protection Centre (CEOP) to release a new version of its Internet Explorer 8 web browser that features a number of online safety features for families
Internet Explorer 8 Click Clever Click Safe comes with a web slice in the toolbar that offers kids one-click access to advice on staying safe online, including cyberbullying, viruses and hacking.
The browser also comes with a 'Favourites' bar including links to the CEOP website and Thinkuknow.co.uk, allowing parents to get information on restricting their children's browsing, while the search bar allows users to instantly search the CEOP and its internet safety partners' sites for further safety information.
Microsoft spokesperson Matthew Bishop said: "Internet Explorer 8 Click Clever Click Safe has been designed with the sole purpose of providing young people and parents with easy ways of finding information on how to stay safer online.
"As more and more young people are learning, playing and communicating online, it is vital we provide the appropriate safety information as we know this is one of the most effective ways of helping to protect people."
Internet Explorer 8 Click Safe Click Clever can be downloaded from the CEOP's dedicated web page.
Web users that don't want to download the new version of the browser can opt to download an add-on that contains the CEOP tools.