COURT NOTES: With settlement discussions apparently heading nowhere, Microsoft last Tuesday filed its 'proposed conclusions of law' document with antitrust trial judge Thomas Penfield Jackson. The filing, rebuttal to a similar document handed in last month by the government, is intended to give Judge Jackson Microsoft's perspective about laws it could have violated with the activity he ruled about late last year in a 'finding of fact' decision [see NewsSource, Nov. 08].
The filing started with Microsoft accusing the government of simply rehashing Jackson's decision in its own filing - then moved on to do exactly the same thing, essentially recapping arguments made earlier in the trial. Microsoft has apparently decided to play its entire case in preparation for appeal since the filing went so far as attacking Jackson's earlier ruling, saying that it was "unsupported by the record." While that certainly will not make the judge feel any favor towards Microsoft, it could eventually influence an appeals judge to give the case a second look - again helping Microsoft by delaying this case's unavoidable outcome. The government will now file a rebuttal to Microsoft's document, followed by Microsoft's rebuttal to that rebuttal (legal tennis anyone?). After those are completed, oral arguments on the conclusions of law will commence on February 22.

January 18th Microsoft reported its results for the 4th quarter of 1999. Excluding a three-cent charge for the Caldera settlement [see NewsSource, Jan. 17], Microsoft earned 47 cents per share last quarter - once again beating estimates by exactly five cents. Microsoft claimed Office 2000 sales were stronger than anyone had anticipated, diffusing the effect of an operating system sales slump in anticipation of Windows 2000 and Y2K - but that claim is questionable in light of Microsoft's cookie jar accounting techniques. Just as they always do, Microsoft then issued a warning about future earnings, citing the sales slump that always occurs during the first quarter of a year. Despite the good news, Microsoft's failure to sustain 50% annual growth apparently had a negative impact on investors, causing MSFT shares to hold and then abruptly drop after the report came out.

The week after Christmas when Linux developer Michael Chaney re-registered the passport.com domain name for Microsoft [see NewsSource, Jan. 10], he never expected to have the $35 registration fee repaid. After a big media stir Microsoft finally sent Chaney a check for $500, but instead of cashing it in the Tennessean decided to auction the check on eBay. He promised to give any proceeds to charity and agreed to match the donation with his own money, not expecting the bids to reach more than the check's face value. Unfortunately for Chaney, the last time we looked bidding had hit $5,100 with four days remaining. Our advice: next time cash the check and buy RedHat stock.

Finally putting policy in line with its antitrust case, the US Department of Justice last week signed a three-year contract with Corel to put the Canadian software company's products on some 55,000 staff computers. Unfortunately the product being purchased is not Corel Linux but WordPerfect Office for Windows, although that is a good place to start.
When Windows 2000 finally ships next month, it will include a built-in feature that was against US law until last week - 128-bit encryption. According to Microsoft's Brian Valentine, that took a special arrangement with the government, so we can naturally assume that they included a backdoor for the NSA just like the one discovered back in September [see NewsSource, Sep. 13 '99].

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