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Recently in Salon Technology

Column
Software outlaw roams the streets!
So Microsoft broke the law. But while the judges argue among themselves, the company remains free to stalk new markets.
By Scott Rosenberg
[04/03/00]

Judge to Microsoft: Guilty!
Thomas Penfield Jackson slams Microsoft for abuses of monopoly power.
By Lydia Lee
[04/03/00]

Technology: View from the top
We're here, we're queer, we're media moguls
Is PlanetOut CEO Megan Smith building the gay and lesbian AOL Time Warner?
By Lydia Lee
[04/03/00]

A sense of Well being
A most influential online community celebrates its 15th anniversary.
By Jon Carroll, Farai Chideya, Mary Mackey, Susan McCarthy, Steve Silberman and Mary Elizabeth Williams
[03/31/00]

Column
Napster -- friend or foe?
Fans have already embraced new music-distribution technologies. Musicians can fight them or join them.
By Scott Rosenberg
[03/30/00]

Complete archives for Technology

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When people ask me about this case, I tell them three things: I tell them that the right of appeal [a cell phone goes off] and the right to a cell phone is a fundamental tenet of the American legal system, and that until the appeal is over nothing is settled. We've learned that from experience.

I tell them I couldn't be more proud of this great company, its incredible employees and its breakthrough products. And I tell them I believe in this company more today than I ever have. I believe in our people, our technology and our vision. We need to stay very focused in on that.

It's important for us to all think about what today's ruling means and what it does not mean. The ruling does not change the challenges and opportunities before us. Windows 2000 is the foundation for a whole new generation of products and services that will make the dream of next-generation Windows services on the Internet a powerful reality. The combined power of amazing software, the Internet and wireless technologies will free our products from the desktop and servers and take them into literally every corner and walk of life. If you take a look at devices like pocket PCs, smart kitchen appliances, the My Pad that Bill had a chance to unveil last month, it's really quite amazing.

And the boundaries of innovation are really being expanded as never before, and it's those incredible opportunities and challenges that will shape the destiny of Microsoft and our industry.

At the same time, we do recognize that we have a special responsibility to set a positive example in our industry. We've spent the past 25 years thinking of ourselves as a small aggressive company playing catch-up to industry giants, even though at some point along the way we became a large company. Our success has really come from the opportunity that Microsoft and that Windows have created for consumers and for thousands and thousands of companies even while we competed with a few of those companies.

We have failed to adequately demonstrate all of that opportunity for consumers and business alike. Our intense focus on moving forward has at times been seen as threatening and our passion for being the best has been misinterpreted. We can do better. But that doesn't mean innovating any less or delivering any less value to consumers. It does mean that the values we hold dear -- opportunity for everyone, integrity, innovation, customer focus and partnership -- have been called into question today. We continue to cherish those values as we always have.

In the coming weeks, I intend to speak directly to many key customers and partners to assure them that today's ruling will not cause us to slow our efforts to provide the products and services they need to run their businesses. I had an opportunity today to talk to a wonderful software developer building on our platform, and the list and range of new things that they want to see in the basic platform was daunting. But we're dedicated to delivering on the kind of things that folks like that want.

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Ralph Nader
Consumer advocate

The remedies are what it's all about, and based on the findings of fact, and today's legal findings, it seems to me that [Judge Thomas Penfield Jackson] has to order the breakup of Microsoft -- at least separating the operating system business from their applications business, and also requiring Microsoft to divest itself of its browser. They need to spin it off.

That's what would be the structural remedy. If he goes the other way and orders a behavioral remedy, saying, "You have to stop entering anti-competitive contracts and prohibitive agreements," well, that requires year after year of monitoring. And they could never keep up with Microsoft. Unless there's a huge federal police force watching Microsoft, they'll evade. It's been a defiant company for years: It defied the judge, it even misled the judge on several occasions. So to end up with "You should do this and you shouldn't do that" is quite readily evadable by a company like Microsoft. But what they can't evade is a breakup of the company. A breakup is the best thing to allow competition by innovative competitors, which will then benefit consumers.

The only real innovation Microsoft has shown the world is how to crush its competitors with monopolistic, anti-competitive behaviors. This is not a company that's used to innovation -- it's the great imitator.

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Ron Chernow
Historian, author of "Titan, the Life of John D. Rockefeller, Sr."

If you go back to the spring of 1998, we got this giant federal antitrust suit because of the breakdown of negotiations that spring -- their desperate last-minute efforts to stop the case failed. A major antitrust case always suggests a failure of prior negotiations, because the federal government is reluctant to enter these cases -- they are expensive and drag on for years.

Here is a case where Microsoft had shown very little willingness to compromise before -- the case was a violation of a previous consent decree. It was clear that this was going to be an unusually tough and uncompromising company to deal with, consistent with its reputation in the industry for a no-holds-barred approach to the competition.

If you go back to spring and summer of 1998, it started out as a much more narrowly focused case on the bundling of the browser with the operating system; it wasn't really a great deal more than that. But what happened, as the case proceeded, a lot of Microsoft's enemies came out of the woodwork; the lineup of the people testifying against Microsoft got larger and more impressive and the nature of allegations became larger and more sweeping. The government had a brilliant prosecutor in David Boies, and his showmanship encouraged a lot of people to join the case. A lot of momentum built up.

They kept raising the stakes, and when the moment came for negotiation, the bar had been set very, very high; the Justice Department and many state attorneys general had a very triumphant feeling, and they felt that the power was on their side. They suddenly were demanding very major concessions and many of them wanted to go beyond conduct remedies to the structural remedies, including the breakup of the company.

I'm not sure that Gates is being blasé about this -- I watched the 6 p.m. press conference and I was struck by the fact that Gates was very heavily made up. He's usually not. Someone must have said to him, "Bill, you look pale and need to be touched up," which suggests that he had a much stronger reaction than he was letting on. We know from various press reports that he's been table-pounding furious, and feels this tremendous sense of injustice and of being under siege. I feel that the press conference he had was more of a studied attempt to project a self-confident and even cheerful image, even if it wasn't entirely convincing.

I've said about Gates before that the essence of his commercial success has been because he is so uncompromising. The same thing that he's been successful with in business is the same reason it's hard for his personality to cope with an antitrust trial. His unrelenting drive and character, which are so advantageous in business -- those characteristics work against you in the political sphere, which requires compromise and the ability to negotiate. When the case was filed in 1998, Microsoft had been in business for 25 years, and it was clear that Gates was a successful but relentless businessman; he would have had to reinvent himself to become a subtle negotiator. It wasn't in his nature.

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