MSBC NewsSource

May 01 2000

MSFT $69.19 B.G. $51.3B
05.12.00. Thanks to BillG Networth.

ABCNews Tech BetaNews.Com CNN Computing Infoworld LinuxNews MacOS Rumors NewsNow UK News.com The Register Slashdot SJ Mercury Techweb Wired News ZDNet News

SPONSORED BY:

Government Asks for a Split; Distributed Vaporware Tradeshow; Larry Passes Bill's Billions; US Military Points at PowerPoint

COURT NOTES: On Friday, April 28, after weeks of speculation, attorneys representing the US Department of Justice and 19 individual state governments delivered a 17-page remedy proposal to Judge Thomas Penfield Jackson. The plan, an apparent compromise between states with different remedy proposals, calls for Microsoft to be split into two separate companies, one with control of operating systems and the other retaining the rights to everything else - Office to MSN and everything between. The remedy plan also calls for restrictions on Microsoft's future developments, licensing deals, and exclusionary contracts. The plan would additionally limit Gates and other executives to owning stock in only one of the two groups.
Microsoft reacted in the usual way, accusing the government of demanding too much and claiming that such an "extreme" split would destroy Microsoft and the entire economy, a claim we find highly doubtful. Microsoft's non-stop protest of a split may be little more than a ruse to make the judge and prosecution favor that remedy, when it would in fact be beneficial to the company. Not only would the two groups be worth more apart than they are together, it would disarm Microsoft opponents into thinking of the companies as harmless. That may be far from the truth, as even a split Microsoft would still be quite powerful with retained monopolies in the office suite and operating system markets. And with the company's current executives still inside both groups, collusion is certainly possible, as most of them have been friends for decades (Bill Gates and Steve Ballmer went to college together, as an example).
But this deal is far from done. The government plan is just a proposal, and Judge Jackson is in no way committed to it. Microsoft still has a remedy plan of its own to present later this month, and Jackson may choose to take pieces of it as the solution, or he may go out on his own and use something completely unexpected. Considering the small amount of time set for the remedy process, he may be preparing for something far less complex than a split - opening the Windows source, as an example. We can definitely expect a few more surprises before this thing is done. That not withstanding, Microsoft has until May 17 to file its own remedy proposal, with a court hearing on both proposals scheduled for May 24th.

The entire text of Plaintiff's Proposed Final Judgment is available on the Department of Justice site.

Transforming WinHEC from a PC hardware developers convention into a handheld and connected device orgy, Microsoft descended on New Orleans last week to promote its own brand of bottled miracle-cure distributed computing. Making a big stink about piles of nothing, most of the products on display at this year's convention were vaporware, making promises that Microsoft has no intention of ever fulfilling. Since the whole show was geared towards distributed computing, naturally one would expect to see Microsoft's distributed Jini-killer Universal Plug n Play displayed prominently. But not surprisingly, all the devices that should have been using UPnP weren't - a fact Microsoft blames on its many recent reorganizations. To fix that made-up problem, Microsoft announced that all of its non-PC development efforts would be combined into a single group that may or may not be tossed aside in the future when the threat from real distributed computing devices goes away.

Also at WinHEC, Microsoft gave its first official preview of Whistler. The Windows 2000 replacement, tentatively scheduled to ship on April 15, 2001, has already been leaked several times in the past month, but those alpha-quality builds failed to show Microsoft's full plans for the system. Along with the expected hype about UPnP and Internet integration, Windows general manager Carl Stork displayed one of Whistler's most interesting aspects: componentization. According to Stork, future versions of Windows will be componentized to allow for different levels of complexity with the same system. For example, the same system core could be used for a high end server and an embedded system by simply adding and removing different layers of code. The presenter failed to mention that other systems, particularly BSD and Linux, have been this way for years and were built for componentization from the beginning. That notwithstanding, Microsoft would do well to actually produce a system with such flexibility - assuming that the promise isn't just more vaporware.

With Microsoft stock price battered by predictions of reduced sales and the multiple significant lawsuits stacked against it, the company's shares has lost nearly 50% of their value in the first half of year 2000. As a result, Bill Gates too has lost value, dropping from a networth of nearly $100 billion to current levels in the mid-fifties (counting only his Microsoft holdings, of course). Meanwhile, Oracle stock has soared by some 500 percent since this time last year - propelling Oracle CEO and majority shareholder Larry Ellison slightly beyond Gates, giving him the coveted title of world's richest human being. But their valuations are so close that the positions are reversed almost every day; Gates and Ellison have already traded the moniker several times in the last week. But if momentum is any sign, Gates will continue to drop while Ellison grows wealthier.

Last week Microsoft invested an undisclosed amount into ContentGuard, an Xerox subsidiary that handles digital rights management. The investment solidifies a four-way deal between Microsoft, Xerox, ContentGuard and Reciprocal, another rights management group Microsoft has invested in. The four will eventually share patents and work together on new technologies. Xerox may also eventually take ContentGuard public with an IPO, generating a nice wad of cash for itself and Microsoft. To solidify support for the company, Steve Ballmer then promised that ContentGuard software will be present in Microsoft's forthcoming eBook Reader and future versions of Windows Media Player and Office.

In the year 2000, the US military has moved beyond merely fighting wars with foreign countries. Instead, the Pentagon has declared war on a larger threat - Microsoft PowerPoint. According to a Wall Street Journal report, several influential military leaders have ordered their subordinates to stop wasting precious time and bandwidth on confusing 200-slide PowerPoint presentations, and instead return to traditional typed briefings. Microsoft has refused to comment on the report.
Last week a panel of federal judges combined 27 private lawsuits against Microsoft into one monster civil case. The move is good for both Microsoft and the suing parties, since it reduces the overhead needed for defense, and gives the plaintiffs a stronger case. Unfortunately for Microsoft, there are still an estimated 120 OTHER independent cases.

Is that your final offer?
Observers skeptical of Win 2000 Kerberos plan
Microsoft's woes strike mutual funds, pensions
Paul Allen nearly divested of M$ stock

Saturday, 16-Nov-2002 17:22:42 EST