Microsoft might face reckoning

Sunday, October 18, 1998

BY CHARLES BREWER
The Cincinnati Enquirer

Perhaps Bill Gates is as lucky as he is smart.

Microsoft's antitrust trial, scheduled to start Monday, was big news until our attention turned to sex in the Oval Office. After reading the X-rated Starr report, most people have forgotten about Microsoft.

After all, it's just about browser software, right?

Actually, it's about more than browsers. The browser thing was settled, more or less, last June when Microsoft was allowed to release Windows 98, complete with integrated browser.

The latest charges are a double-barreled shotgun blast alleging that Microsoft has used the Windows operating system to bully PC manufacturers, steal from software competitors and even attempt to control the Internet.

The war began a year ago when the Justice Department wanted Microsoft to remove Internet Explorer from Windows 95. Then Justice attempted to block the release of Windows 98. In both cases, courts ruled in Microsoft's favor.

Competitors weigh in

Since then, the Justice Department's suit has been expanded, as more than a few of Gates' competitors weighed in with evidence.

Sun Microsystems claims Microsoft tried to control or kill the Java programming language. Apple Computer claims Microsoft tried to usurp its QuickTime multimedia software. Intel says that Microsoft killed Intel's plans to incorporate parts of the computer operating system into future chip designs.

And smaller companies, even one run by a former Microsoft executive, claim Microsoft tried to steal their technology.

Just in time for the trial, several books have appeared which provide the scorecard for the trial. The newest is The Microsoft File: The Secret Case Against Bill Gates by Wendy Goldman Rohm.

Ms. Rohm paints a very disagreeable picture of Gates' business practices, which seem to be right from the robber baron era. In her version of history, Microsoft bullied or ripped off just about every major player in the industry.

In Barbarians Led by Bill Gates: Microsoft from the Inside, Jennifer Edstrom and Marlin Eller explore Microsoft's competitive and paranoid corporate culture, an environment where Darwinism is taken to a new level: Survival of the most ruthless.

Gates reacts quickly

Both books lay down a basic premise: Bill isn't so smart, and isn't so lucky. He can't predict the future. He just sticks his finger into every pie and quickly reacts to what's the New Hot Thing in computing.

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It's how Microsoft goes after business that concerns the Justice Department. Take the browser issue: Microsoft saw that the browser would be must-have software. To give its product leverage in the marketplace, it incorporated it into Windows.

But look at it another way: Netscape was originally charging for its browser software, while Microsoft gave it away as part of Windows. Isn't that a good thing for consumers?

That's Microsoft's position, but the other side points out that this is the hallmark of monopolistic behavior. Just as Andrew Carnegie (who also once held the moniker "World's Richest Man") sold his steel cheaper than anyone else to wipe out his competition.

In a response last week to the Justice Department's suit, Microsoft wrote, "History has shown that high market shares in computer software are vulnerable and susceptible to rapid deterioration ... Market entry costs are very low and profit opportunities vast ... leading to constant efforts to unseat the incumbent leader ... Once a software program is developed, replication costs are very low, so a market entrant can quickly and easily produce enough copies ... to immediately satisfy all demand."

So what does the future hold for Microsoft?

It could become like IBM, which became a target of antitrust actions in the 1950s and 1960s. IBM battled one suit for 13 years before the government's efforts fizzled.

Fighting the government was a tremendous drain on IBM, so perhaps Microsoft will capitulate and disband into a bunch of "Baby Softs" like the phone company did in the 1980s.

If history is any guide, Microsoft may be headed for the surgeon's knife. Bill Gates, the world's richest geek, is too easy to dislike. And Microsoft has grown too large and powerful.

Send e-mail to Charles Brewer at CBrewer@enquirer.com.

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