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"It reads like a novel"
Judge Jackson's findings are music to prosecutors' ears -- but Microsoft says it's guilty of nothing more than embodying "the most basic American values."
By Janelle Brown
[11/06/99]

21st Challenge
21st Challenge No. 28
Forward, march! Join the dance of the eternally circulating e-mail.
By Charlie Varon and Jim Rosenau
[11/06/99]

Is Linux the real remedy?
The open-source camp welcomes the findings of fact. But some think that Linux doesn't need the courts to beat Redmond.
By Andrew Leonard
[11/06/99]

Books
The best of all possible worlds
Dow at 36,000! No more cancer! The new techno-optimists gush about a picture-perfect future. Should we believe them?
By Mark Gimein
[11/04/99]

Getting smart, the stupid Web way
AltaVista's new marketing campaign says smart is the new sexy. So why is the search engine coming off so dumb?
By Rose Martelli
[11/03/99]

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It's worth mentioning how weird the motivation that Jackson ascribes to Microsoft really is. There aren't any PC applications that rely wholly on Netscape's APIs. If there were, they would be able to run without changes on any computer with Netscape Navigator installed. "It remains to be seen," Jackson writes in Paragraph 28, "whether there will ever be a sustained stream of full-featured applications written solely to middleware APIs."

So Jackson, writing in 1999, notes that it still remains to be seen whether, in fact, there will ever be applications that actually use middleware like Netscape Navigator to bypass the operating system. And Microsoft was supposed to have been worried about this threat back in 1995. It would be hard to believe ... if it wasn't so obviously true.

Jackson believes that Microsoft believed that the proliferation of Netscape browsers could at some point in the future make its operating system less important. And that, weird as it is, is exactly right.

Here's a quote from one of the many Bill Gates e-mails introduced into evidence: "They [Netscape] are pursuing a multi-platform strategy where they move the key API into the client [browser] to commoditize the underlying operating system." In other words, Gates is saying that by creating its own APIs, Netscape was threatening to make Microsoft's operating system superfluous, and thus turn the enormously lucrative Microsoft operating system into a low-profit commodity product -- like the interchangeable beige boxes made by second-tier PC makers.

Wait a second. It sure sounds like there are a lot of steps from here to there. But that's what Gates wrote.

The reason it should immediately strike us as a little strange that Gates should be so worried is that no matter how many APIs Netscape's software had, we have a lot of trouble imagining Windows owners suddenly being able to get rid of their operating system.

Microsoft's not so shaky monopoly.

In its last fiscal quarter, Microsoft took in $2.25 billion from selling operating systems and upgrades -- a rate of about $9 billion a year. Those huge numbers grow reliably every year because Microsoft effectively exercises a monopoly on desktop operating systems. Jackson concludes this in Paragraph 34, writing that Microsoft's customers "lack a commercially viable alternative to Windows" on Intel-compatible PCs. Arguably, Jackson could have spent more time considering Linux and other flavors of Unix. Arguably, too, talking about "Intel-compatible PCs" is a strange way to define the market; Microsoft would have equal or greater power if its operating system ran on the PowerPC chip. But these are quibbles.

Jackson believes that Microsoft's monopoly is very easy for the company to maintain. The reason for this is what he calls the "applications barrier to entry" in the operating systems market: "Software developers generally write applications first, and often exclusively, for the operating system that is already used by a dominant share of PC owners," he says in Paragraph 30.

The "applications barrier to entry" is for Jackson the fulcrum on which the whole case rests. The term, and much of the theory of the case, comes from Franklin Fisher, the government's star economist.

A much simpler way of saying this is that no one will use an operating system unless there is plenty of software, and no developers will write software unless there are plenty of users. Jackson's premise is that the "applications barrier to entry" in operating systems is so big that no one can successfully introduce a new operating system. Ergo, the Microsoft monopoly.

If only. There's nothing wrong with Jackson's theory, though some observers will probably argue that he has to go through some hoops to explain why the Mac operating system's 12,000 applications are not enough to overcome the applications barrier to entry. The problem is that it's clearly incomplete. There's a lot more buttressing Microsoft's monopoly than this.

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