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Dec. 11 2000

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MSFT Stock Slammed; Gates Labels AOL-TW 'Dangerous Monopoly'; Poaching Palm Developers; DigitalAnvil Sells Out

With computer sales around the world slowing and a plethora of software and Internet companies reporting reduced profits, Microsoft's earnings forecast was cut by a major analyst. On December 7, Goldman Sachs analyst Rick G. Sherlund downgraded his prediction for Microsoft's Q2 2001 revenue by about $250 million to a mere 6.8 billion dollars. He also downgraded the next two quarters by a similar amount, but did not change his overall rating on Microsoft's stock. Sherlund noted that his downgrade was necessary because Microsoft's management is stingy with data about monthly sales, forcing him to lump it in with the rest of the industry.
The following day Lehman Brothers analyst Michael Stanek lowered his earnings forecast as well, with per-share earnings reduced by a penny to 49 cents. That was followed by a rating change from 'strong buy' to 'buy' from ING Barings. The three advisories and estimate changes combined put a big dent in Microsoft's overall market value, with the company's stock price dropping by more than six percent.
ALSO SEE: ZDNet, C|Net

Always willing to help prevent the formation of monopolies (ones controlled by others, anyway), Microsoft has sent a notice to the US Federal Trade Commission objecting to the merger of America Online and TimeWarner. Microsoft's main complaint is with TimeWarner's control over cable television service across much of the country - and with it control over physical cables that could be used for high speed Internet service. AOLTW got past government objections to its control of the lines by agreeing to give a competitor access to them, in this case Earthlink (the nation's #3 ISP behind AOL and MSN). Microsoft objects to the terms of TW's deal with Earthlink, saying the contract should be more flexible and, of course, allow for a second provider to use the lines now (two other companies will be allowed to use the cables within 90 days of the merger's completion). But, we dare say that Microsoft would have no problems with an exclusive contract if it had won the thing instead of Earthlink. AOL and TimeWarner responded to Microsoft's notice by threatening to drop all outside contracts if the government tried to force it into a deal with the Satan of Software.
ALSO SEE: WinInfo, ZDNet

For years Microsoft has issued its security advisories and bug alerts through e-mail to thousands of subscribers. That changed on December 4, when the company started a new policy of only sending out messages with links to pages on its Web site with the same information. A Microsoft representative said the change is a move towards ending confusion that surrounds differing versions of the same security alert being sent out, and also gives the company more information about who reads the alerts.
Bugtraq mailing list moderator Elias Levy released a statement in response to the change, saying that he would not allow security notices consisting of only links to go out over his list, because notices like that are not archived and could be changed at Microsoft's discretion. (The company has a bad habit of removing security notices after only a few weeks, and has in the past modified notices to make serious security problems appear less damaging.) Levy then started posting text from Microsoft's site on the Bugtraq list, until Microsoft notified him that he was violating their copyrights and would face legal action if the practice continued. But that backfired on Microsoft, since now Bugtraq is still issuing its own advisories about the company's security problems, without the additional information about patches and workarounds that Microsoft's advisories contain.
ALSO SEE: C|Net, The Register

Instead of building better products, Microsoft has decided that the best way to beat Palm in the handheld computer market is to take away some of its better programmers. This tactic was used successfully against Borland and other competitors (many of which have since collapsed), and was one of Microsoft's first innovations in the area of anticompetitive business practice. This time, Microsoft is targeting independent developers who create software for the PalmOS platform. The new initiative is starting with a Microsoft party at the PalmSource convention in Santa Clara, California. The dinner party and reception (during the middle of PalmSource) will be invitation-only for a select number of Palm developers - obviously ones Microsoft considers to be the best and brightest. The Behemoth will be touting supposed advantages of PocketPC and trying to get the Palm developers to sign onto developing for it. A Palm spokesman said his company isn't terribly worried about Microsoft's reception, since most Palm developers have already seen the PocketPC platform and chose to stick with PalmOS.
ALSO SEE: C|Net

While Microsoft talks itself to death promising .NET services in three to five years, competitors are already launching finished products that do more than .NET ever will. The latest is Oracle, announcing the launch of its own Web-based services on December 8. According to the statement, Oracle will now provide Internet hosted versions of its software, along with new online data analysis tools based on the company's 8i and forthcoming 9i databases.
As part of its continuing attempts to appear benevolent and generous, Microsoft declared on December 4 that it will be donating $100 million for Boys and Girls Clubs organization to purchase computers. Unfortunately, the money will be donated over a five-year period, and there are 3.3 million children in the program - boiling down to about $6 per child per year, not even enough to buy one computer for every 100 kids.
Privately held game developer Digital Anvil has been acquired by Microsoft to provide more content for the X-Box when it launches in fall 2001. Digital Anvil's previous game title, Starlancer, was distributed as a Microsoft title. Company founder and CEO Chris Roberts additionally announced his intention to leave Microsoft as soon as the next Digital Anvil game in development is completed.

Gates: We must be more secure!
Gates talks big on small IE6 cookie move
Sun, Microsoft stress commitment to XML
Microsoft cuts two Office 10 features
Microsoft's Y2K security holes - 93 and counting
Lernout & Hauspie bankruptcy leaves future uncertain
Gates sues Caribbean hotel promoter

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