COURT NOTES: At 10 AM Eastern Time on September 26, the US Supreme Court announced that it would not review Microsoft's appeal of the antitrust case ruling. That refusal handed the appeal to a lower court, which has sided with Microsoft previously in several related cases. The Department of Justice used a 1974 law to 'fast track' the case past those lower courts, but 8 of the 9 supreme court justices declined to hear it. The one dissenting judge, Justice Stephen Breyer, wanted to review the trial because the case "significantly affects an important sector of the economy." The rest - including Chief Justice William Rehnquist, whose son represents a law firm handling a separate Microsoft case - saw no compelling reason to handle the appeal.
After the Supremes announced their decision, but before it had even been officially registered, the overeager U.S. Court of Appeals for the DC Circuit immediately took complete jurisdiction over the case and ordered Microsoft to submit a proposed appeals schedule by October 2nd. Microsoft did as ordered, with a plan requesting that the word-count limit for briefs be quadrupled and asking for a 60 day break just to prepare the first brief, followed by another 30 days of delay. That, combined with holiday vacations, would drag the case well into late summer 2001.
The next day, four earlier than required, the government replied with its own schedule, ripping into Microsoft's "excessive" plans to "delay resolution" of the appeal. As they correctly pointed out, the appeal is not a 'retrial' that would require collecting piles of new evidence - Microsoft doesn't need two months to gather evidence and testimony it has already used. The DoJ's own schedule would have the case ready to start by mid-December, instead of the early-April date required by Microsoft's plan.
Microsoft's rebuttal to that schedule accused the government of trying to "short-circuit the appellate process" by not giving it enough time to set up a proper defense. The rebuttal also then accused the government of wasting more time than anyone with its failed attempts to go directly to the supreme court - a move that admittedly consumed a fairly large piece of time that could have been used preparing for the appeals court. Nonetheless, the appeals court is expected to set a finalized schedule for the appeal soon, probably splitting the difference between both sides.
ALSO SEE: Wired News, C|Net, The Standard, The Register

On Monday October 2, after the market closed, Corel announced the formation of an alliance with old adversary Microsoft. The deal involved Microsoft paying $135 million for 24 million non-voting shares of Corel stock - slightly less than a quarter of the company. Under the terms of that agreement, Microsoft and Corel will work together on several Web sites and some .NET functionality for Corel products. In other words, Microsoft paid $135 million to eventually lock Corel customers into the same proprietary Internet that its own customers will soon be tied to. That could be Microsoft's solution to pushing .NET on Linux users, as Corel has a number of popular Linux products. Or did - Linux users may now abandon Corel en masse to avoid using anything associated with Ms. Either way, this will eliminate any chances of the rumored Microsoft Office for Linux ever being completed [see NewsSource, Sep. 04].
Corel's Derek J. Burney, serving as interim CEO since Michael Cowpland's resignation on August 15, explained the investment as a strategic alliance to help Corel get more of its products on the Internet. But it's also a desperate step towards keeping Corel solvent for a few more quarters, as the company has been constantly losing money (and employees) for several years and recently abandoned a merger with Borland/Inprise. The Microsoft-Corel agreement also resolves several legal issues between the two companies, just like Microsoft's similar deal with Apple in 1997.
ALSO SEE: The Register, ZDNet

Microsoft co-founder Paul G. Allen has announced that he will step down from his position on the company's board of directors during the annual board meeting on November 9th. Allen, who did all the hard work for Bill Gates in the company's early days, served on the board from 1981 to 1984. In '84, after several explosive arguments with Gates, Allen supposedly left the company because of parkinsons disease. In 1990, with the incurable disease apparently gone, Allen rejoined Microsoft's board and has served there ever since. In the meanwhile, Paul Allen used his Microsoft profits to buy up almost everything of value in Seattle and Portland, including most of the professional sports teams. He also invested into some 140 different companies (AOL, Netscape, and Oracle included) and bought a majority of the country's cable television providers.
Allen released a statement explaining that he chose to leave Microsoft because the board meetings use up valuable time that he doesn't have enough of, what with hundreds of other investments that need to be supervised. But Microsoft's board meets on average only six times a year, so you have to wonder exactly how much of his time they actually consume. It's more likely that Mr. Allen has some issues with the direction Microsoft is heading and chose to cash in his chips rather than get into a new round of unwinnable arguments with Gates. And board members are held legally responsible for corporate actions, so it's little wonder that Allen would want to get away from the possible liability of being associated with a monopolistic law-breaking monolith. Either way, a Microsoft press release said Allen will remain with the company as a "senior strategic advisor" - little more than a name on the figurehead. Microsoft has no plans to refill the seats held by Allen or the departing Richard Hackborn, leaving the company's board with only six members.
ALSO SEE: MarketWatch, C|Net, The Register

On September 26, 8 months after Windows 2000 went on sale, Microsoft released the final flavor of that operating system - Windows 2000 Datacenter Server. Datacenter, originally scheduled for sale in June of this year [see NewsSource, May 29], is designed to handle high volumes of data and support up to 32 processors on one computer. Like Unix, Datacenter is only available as a preload on high-end systems with tightly controlled hardware components. Unfortunately for Microsoft, that's where similarities between this product and Unix stop - remember that Datacenter is really just a stripped-down version of Windows 2000 Server with a higher cap on processor support. All that for a bare minumum of $10,000 per server.
Accompanying the main announcement, Microsoft also bragged about having its 7000+ support technicians trained to help deploy the new system, along with thousands of additional consultants and technicians at IBM, Compaq and other partners. Microsoft additionally released new applications to run on Datacenter, including SQL Server 2000 and Exchange 2000, two products that have been on hold for over a year because of delays in the development of Datacenter. At the same time, Microsoft had to announce that several other highly anticipated products like BizTalk would be delayed by almost another year because of their own development delays.
ALSO SEE: InfoWorld, WinInfo, ZDNet, C|Net

For fiscal year 2001, which began in June, Microsoft is using new categories to report some of its quarterly and yearly financial results. The new categorization, which will be used for reporting the results of last quarter, defines Microsoft's revenues inline with the most recent internal reorganization. In other words, the money Microsoft makes is now being reported by market category instead of product category. Previously, the five categories were Windows Platforms, Productivity Applications & Developer, Consumer, and Other. Now the categories are Desktop Software, Enterprise Software & Services, Consumer Software Services & Devices, Consumer Commerce Investments, and Other. Just like the internal reorganization, this financial rearrangement is more or less just a move to make the company harder to split apart, if the government should ever reach a final decision to do so. But so far as overall financial figures are concerned, it's about the equivalent of rearranging deck chairs on the Titanic.
ALSO SEE: The Register, C|Net, The Register

As Microsoft prepares to release MSN Explorer, the MSN-specific version of IE, complaints about the betas of that software are starting to flood in. The first problem is MSNE's requirement that users transfer their MSN Internet Access e-mail accounts to Hotmail - with the same address but now only available through the Hotmail site. Users who would prefer to get their e-mail via POP3 and then read and reply to it offline are being shut out, just so Microsoft can send them a few more ads. A Microsoft spokesman said that a method to switch the account back will be made available once MSNE is officially released - a claim we will believe only when we see it.
The other issue is with what MSN Explorer does once a user chooses it as the default e-mail program. When the product imports an Outlook contact list, its default option is to send an announcement of the switch to every address on that list. That announcement message is little more than poorly-disguised spam, with eight lines promoting MSN and MSN Explorer, preceded by a single line announcing the new e-mail address. Microsoft dismisses the concerns of spam opponents and privacy advocates by pointing out that the announcement message is just an option, but said the message may be changed in future releases "so as not to confuse consumers."
ALSO SEE: C|Net, ZDNet, The Register

Ex-Microsoftie Monique Donaldson, a black woman, is suing her onetime employer for racial and gender discrimination. The former Ms product manager says that the company's employee evaluations are set up in a manner that allows department managers to discriminate against anyone they dislike by withholding promotions amd benefits. In her suit, Mrs. Donaldson is asking for unspecified damages and an order preventing future discrimination. A Microsoft spokesman said he had no knowledge of the issue and refused to make a comment.
In a deal similar to the one in Japan we covered last issue [see NewsSource, Sep. 25], Microsoft has made an agreement with Germany's Blaupunkt to jointly develop automotive software for Windows CE. Blaupunkt is the world's second-largest producer of vehicle navigation and entertainment systems.

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