Microsoft throws in the towel

Software giant capitulates to government, sets new course.

By Salon staff report
Published April 1, 1998 12:17PM (EST)

Microsoft has decided to capitulate to the U.S. Justice Department and "unbundle" its Internet Explorer browser from Windows 95, Windows 98 and all future version of the Windows operating system, Bill Gates said today.

The surprise announcement stunned the technology press, gathered earlier today in a crowded Redmond, Wash., auditorium festooned with flying Windows banners on one side of the hall and Explorer logos covering the other.

"They're right and we're wrong," Gates said. "A browser's just a browser. It's not part of an operating system and it doesn't need to be. I don't know why we ever thought otherwise."

In a brief question-and-answer session after the announcement, Microsoft's chairman was asked to explain the sudden reversal of the company's hard-fought stance in its battle with government antitrust lawyers.

"That's the stupidest question I've ever heard!" Gates shouted at the questioner. Then, after a pause in which his body seemed to convulse, he apologized -- and proceeded to suggest that Microsoft executives' sense of judgment may have been impaired by years of overwork and sleep deprivation.

"I think we just burned out," he added.

Gates announced a number of other new Microsoft initiatives to accompany the antitrust settlement.

On May 1, Microsoft -- taking a page from the playbook of its rival Netscape -- will publicly release the source code to Windows 95, Windows NT and a beta of Windows 98, as well as Microsoft Office 97, Internet Explorer, Microsoft Office 98 for Macintosh, Microsoft Money and Microsoft Bob. From that date onward, software developers will be free to adapt and modify the programs' code any way they like.

"We decided we're never going to fix all the bugs in all our products no matter how many revs we do -- it's just never going to happen, unless every developer in the world has a chance to contribute. So it's time to open the kimono and let the party begin," Gates declared.

At the same time, Microsoft announced, all of its 5,000 temp workers will be offered full-time staff jobs with the company, including a full benefits package and stock options. "We've been very bottom-line oriented in the past, but the truth is, there's always room in the Microsoft family for a few more heads," said Gates. Meanwhile, Microsoft will also shut down its efforts to fight software piracy and renounce all of its patents.

While Microsoft has made much in recent weeks of its plans to turn its home page into a new all-purpose "portal" to the Web known as, Gates today said that those plans have been ditched. Instead, Microsoft will revamp the project as -- a Web site advocating coffee breaks, massages, sensory deprivation tanks and other relaxation techniques. The company will no longer use the Rolling Stones' "Start Me Up" as its theme song; instead, it will adopt the Supremes' "Stop! In the Name of Love."

"Our slogan used to be 'Windows Everywhere,' but now it might better be described as 'Windows Nowhere.' We've learned that to strive to be everywhere at once is, truly, to wind up no place at all," Gates explained. "We were so busy asking, 'Where do you want to go today?' that we never left any time to just be somewhere."

In other Microsoft announcements during the bombshell-filled day, Steve Ballmer, the company's legendarily competitive executive vice president, said he would leave Microsoft to join the New Life Monastery in Taos, N.M., where he plans to take up baking and eschatology.

Meanwhile, Gates said he would take a leave of absence from Microsoft to finish his B.A. at Harvard and expand his recent diary in Slate magazine to book length.

The company's chief financial officer, Greg Maffei, warned that together, these moves would result in a catastrophic decline in earnings for Microsoft in every foreseeable future quarter: "We're going to take a big, big hit, no question about it."

However, Wall Street shrugged off the forecasts, and Microsoft stock rose 8 and 7/8ths today to close at a new high of 104.

Salon staff report

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