true in the near term: "Why M$ has won" (I@week)

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>>> this echos my feelings on what actions Gates will take
    in the near term. frankly, the sooner he does it, the
    better off we will be --this needs to be done before
    the special master makes his recommendations in May and
    Gate$' actions will hopefully incense enough people that
    they will ask for his head on a platter. --the issue in
    my mind is that the wheels of justice turn too slowly.

Why Bill Gates won
By Tom Steinert-Threlkeld
December 12, 1997 5:11 PM PST
Inter@ctive Week Online

Netscape Communications Corp.'s stock finished up 6 percent
Friday and Microsoft Corp.'s fell 1.7 percent.

While still early in the game, it may be that Netscape's
shareholders are applauding U.S.  District Court Judge
Thomas Penfield Jackson too soon.  In the meantime,
Microsoft's owners may be the ones that should be shaking
his hand.

Best as these eyes can tell, nothing in the 19-page ruling
issued late Thursday says Microsoft can't bundle its
Internet Explorer browser with its Windows operating system.
Nor does anything in the ruling say Microsoft can't
integrate its browser into its operating system.

Instead, it says it can't use licensing tactics to achieve a
dominance in browsers.

"Whether or not the government has correctly defined
Microsoft's intentions, the probability that Microsoft will
not only continue to reinforce its operating system monopoly
by its licensing practices, but might also acquire yet
another monopoly in the Internet browser market, is simply
too great to tolerate indefinitely until the issue is
finally resolved."

So, it can't coerce computer makers to license the IE
browser as a condition of licensing the Windows operating
system, forcing them to install both onto the machines they
sell to the public.

If "licensing practices'' turns out to be the crux of all
this, big deal.  That simply gives Jim Barksdale and his
jubilant troops a few months in which to try and work new
deals with computer makers before Microsoft gets really
aggressive.

After all, what Judge Jackson has done is given Microsoft a
better view of the playing field before it.  It clearly will
not be able to argue effectively that a product that it also
sells as a stand-alone product to PC users can be considered
an "integral element'' of the machine's operating system.
Duh.

So, now, if you're in Bill Gates' typically ultra-aggressive
shoes, does this slow you down?  No, it could speed you up.
You simply come out with your fully integrated operating
system, where the features of the browser are built-in
essentials.  You dissipate demand for the browser as a
separate product.

Of course, this puts, as SoftLetter publisher Jeffrey Tarter
puts it, "tremendous pressure on them [Microsoft] to
integrate the products fully, so there's no question that IE
is not a separate product.''

But, if you're Mr.  Bill with a 90 percent share of the
desktop operating system market, isn't that the goal anyway?

As soon as you release Windows 98, you simply stop selling
IE as an independent product.  Cede, for a while anyway, the
Unix and Mac markets to Netscape.  And then see whether the
market does marginalize the market for an independent
product called a browser - where there already are no
margins today.

Then, to keep up with Netscape's "high-performance'' browser
(which you start to call a "utility"), you simply update
your operating system more often.  Windows June, perhaps?

Microsoft simply achieves, over a longer period of time, the
dominance it sought anyway.  Only the clock starts ticking
sooner than if it had left IE as an independent product.
Computer makers are not going to stop providing their
customers with an operating system.

The Department of Justice and Microsoft's Silicon Valley
opponents, of course, will try to push the point that
browsers must stay separate.  But it's unclear how strong
the legal lineage is behind the idea that once a product is
an independent product, it always must stay an independent
product.

If you're Bill Gates, do you sit back and wait to see how
this issue resolves itself in court?  Or do you push down
the pedal in the marketplace.

You'd have to believe he's shown his inclination many times
in the past.  And his shareholders count themselves the
beneficiaries.


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Of course one point that most people seem to overlook (conveniently for
their arguments perhaps) is that when comparisons are being drawn
between Microsoft and prior trust busting such as IBM, Standard Oil etc,
is that in the case of Microsoft, the consumer is getting more for less
money. Not so with IBM or Standard Oil or the ridiculous comparison I
read in today's Mercury News about the village peddler that says "if you
want to buy my butter you have to buy my eggs". A more accurate
comparison would be "free eggs if you buy butter".

Last time I checked, IE is free. You pay for Win9x but get the IE
without paying a penny more.

In my case, I just ignore IE and install Netscape which I prefer.

I guess the IE takes up some disk space, but since disks are so cheap
now, I simply don't worry about any of that.

In the meantime all I hear is a lot of belly aching by Microsoft
wannabes.

The Microsoft wannabes remind me a lot of Micron Technology. Micron
complains about the Taiwanese and Koreans selling DRAMs and SRAMs in the
us below their manufacturing cost. But when I go to Taiwan (monthly) I
hear that the guys bombing the price of DRAM are none other than Micron. 

Appleton (Micron's CEO) raised holy hell about the Korean bailout,
citing the issue that our tax dollars are used to prop up his
competitors. Well I have news for Appleton: the fact is that the low
price of DRAM and SRAM is good for American industry as a whole, and who
the hell cares if Micron is suffering, if Compaq, Dell, Gateway, Sun,
IBM, HP, SGI, etc all can sell a better box for less money using cheap
DRAM?

Like Micron, the Netscapes, Suns, Oracles etc of the world want to use
the courts to solve a problem that stems from the fundamental fact that
they simply cannot get their act together enough to be competitive in
the market.
rdc