GOODIES TO GO! ™
November 8, 1999 — Newsletter #53
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Greetings, Weekend Silicon Warriors,
This newsletter was written on Saturday, Nov. 6, 1999. If any
of the facts have changed over the days before you received
this e-mail, I apologize in advance.
Did you hear…
>Big news! Friday evening, a federal court judge ruled that
Microsoft does indeed enjoy a monopoly in the computer market.
Don’t dance just yet, it isn’t quite over. You’ll find much
more in the newsletter below.
>Did you know there are always embedded programs and internal
jokes in programs? There’s a flight simulator in Excel and if
you enter about:mozilla (then hit Enter) in the location bar
of Netscape Navigator, you’ll get a verse. Well, here’s a new
one that falls in with today’s topic. If you are running
Microsoft Word 97, write this on this page:
I want to see Bill Gates dead.
Then highlight the text and choose Thesaurus from under the
Tools menu. You can also go right to the Thesaurus by the
keystroke Shift and F7. Read the responses. You’ll be amazed.
>Just when you thought the news couldn’t get much worse for
Microsoft, a new Word 97 Macro virus (a la “Melissa”) has been
found. The virus, called W97M.BMH, is wicked because once you
have it, killing it is near impossible without formatting your
entire hard drive. The virus, often referred to as just BMH,
has the ability to save information in your computer’s start-
up registry. If you kill it in one place, rebooting will
simply bring it back.
And now onto today’s topic…
III. MICROSOFT’S POWER IN THE RELEVANT MARKET
33. Microsoft enjoys so much power in the market for Intel-
compatible PC operating systems that if it wished to exercise
this power solely in terms of price, it could charge a price
for Windows substantially above that which could be charged
in a competitive market. Moreover, it could do so for a
significant period of time without losing an unacceptable
amount of business to competitors. In other words, Microsoft
enjoys monopoly power in the relevant market.
The above statement comes from the just-released transcripts
of Civil Action No. 98-1232 (TPJ) MICROSOFT CORPORATION vs.
STATE OF NEW YORK, Attorney General ELIOT SPITZER et al.
(Full transcript available:
http://www.cnn.com/interactive/computing/9911/
microsoft.finding/microsoft.html)
Microsoft Corporation has been found in violation of the
Sherman Antitrust Act, ”1 and 2 and many state statutes
now appear to be in a great deal of financial peril. The
ruling came late Friday and it will take through Monday or
better to see how the financial world will react to the
ruling. Monday’s stock market will be telling.
Through the actual trial itself, many didn’t believe Microsoft
would be found guilty because the stock continued to rise. In
fact, the stock was made part of the famous Dow Jones
industrial average not two weeks ago.
Now, don’t think that this thing is over and break out the
good champagne just yet. Microsoft has been found to enjoy
monopolistic power. That does not mean they’re monopolists.
For that to be proven, the government must prove the remainder
of their lawsuit.
Here’s the deal. You can pretty much guess what a monopoly is
from the board game. One company basically stands above all
others carrying all the power and making it near impossible
for others to compete. That means no price competition and
consumers are left at the mercy of the company.
That’s Microsoft, right? Uhhh, maybe. The law that overrides
monopolies is the Sherman Act (mentioned above). It states,
in so many words, that monopolies are not illegal if the
company receives the monopoly through common business practices
or through market forces that simply elevate the company to
the level of monopoly. The act states monopolies cannot be
gathered through “predatory practices.”
There are, in fact, many legal monopolies in specific markets,
Kodak and IBM just to name a couple.
“So, what’s going to happen to Microsoft?” many ask with
champagne bottles at the ready.
At this point it’s just conjecture because there isn’t a
ruling yet. That could take upward of a month. It appears
the judge would like Microsoft and the lawyers to come up
with some sort of deal between them rather than taking up
more court time. My guess is that that will occur rather
than more trial and more videotape of Bill Gates answering
questions.
“So, um, what’s going to happen?”
I can only write about what I think is going to happen.
Remember that this is only my opinion and cannot be backed up
by anything other than my brain!
The big problem is not the operating system itself, but I
believe that will come into play. It’s that pesky Internet
Explorer browser that has everyone in a bind. What to do with
it is the real question.
There will not be a recall as I have heard suggested. The
logistics of it are just mind-boggling. There will not be a
free updated version of Windows sent to every household and
business already running the operating platform. Again, mind-
boggling.
I believe that Microsoft will agree to stop forcing the MSIE
browser into packages being sold to computer manufacturers. I
can also see a Microsoft Web page offering software patches
and programs that allow consumers to yank MSIE off of their
computer if they want.
I would sooner believe that aliens would land in my front yard
then believe that Microsoft would carry rival software in
their operating system. Can you imagine getting a new computer
and Netscape, Opera, and Cello are already on the machine?
Whether you think it’s a good idea or not, I believe, is
immaterial. Microsoft will never allow that and would tie up
the idea in the courts for an eternity.
If Netscape were still a company unto itself I would suggest
a large cash settlement. Now that it’s been sold, I don’t see
that happening. I could see cash payment to companies that
were “forced” to carry the MSIE browser, but I don’t think it
would be fair. IBM, Compaq, Dell, and the like are huge
companies now. Offering them cash payments would be saying
that carrying the MSIE browser somehow harmed their business.
I can see Microsoft being forced to flat-line their prices,
though. They shouldn’t be allowed to sell software for a
lower price to those companies they like for one reason or
another. That would even the playing field. I could also see
all company contracts with Microsoft becoming null and void.
It would then be up to each company whether to resign or go
with another system. I’ll bet money that the majority simply
sign back up with Microsoft. It has been successful thus far.
The lawyers sure can’t tell Microsoft to give money to charity.
If I’m not mistaken, Bill Gates is about to become the greatest
philanthropist in history.
What I hope does NOT happen, and from what I’ve read I’m not
alone, is that Microsoft itself is broken up into smaller
companies in order to create competition. We have already seen
this fail in American history. Remember when Ma Bell (the phone
company) was broken up into multiple Baby Bells? It just
created many smaller monopolies.
If Microsoft is broken up, what will that do to stocks? What
will it mean to operating systems? There would have to be
many different Windows systems. That might get confusing, don’t
you think (condescending tone added for impact)? Plus, if many
companies are creating operating systems, Microsoft might have
to make many of their trade secrets public. It’s up to you
whether or not you think that’s good or bad.
I don’t see Microsoft being broken up. However, if it is, can
we call each company a “Baby Bill?”
Hey! Speaking of Bill, what does he think of all of this? Ever
the businessman, he said that Microsoft was evaluating the
findings. He went on to say that this would be part of a long
process. It appears as if Bill Gates is going to fight this
to the bitter end. He has deep, deep pockets.
We should hear either a ruling or a deal within a month. I
think that’s what all sides really want. Microsoft especially
would like this all to go away, but not without a deal Bill
feels is fair to him and his company. If the American
government asks for too much, this will become a real fight
that will drag on and on.
I don’t know that Microsoft really wants that, even with Bill
Gates’s statements. If it goes further into trial, questions
will need to be answered:
– Did Microsoft really try to muscle Netscape into a deal where
Netscape could have the Mac and UNIX market if they left IBM
for Microsoft?
– Did Microsoft prop up Apple with the full intent of trying
to get them to embrace MSIE?
– Did Microsoft muscle IBM to drop their O/S operating system
through huge price hikes?
– Does Bobby love Jenny?
– Will Mary get back together with Phil?
– Is Ramon really Joey’s evil twin brother?
These and other question will probably never be answered in
this century’s version of Microsoft Soap.
>>>>>>>>>>>>>>>>>>>
And that’s that. Thanks for reading.
Joe Burns, Ph.D.
And Remember: I just bought a pool table. It’ll be delivered
by the time you read this. Do you know where the term “pool”
table came from? A pool hall once meant a place where many
people could place a bet, usually on horse races. Since there
was time to kill between races, billiard tables were installed
to pass the time. The term “pool” just stuck to the table.