Lawyers representing seven former Microsoft employees have filed a lawsuit against the company, claiming that their clients were discriminated against because of their race. The $5 billion suit, which amends an earlier case filed against Microsoft by one of the employees, accuses the company of denying promotions to black employees and for firing several of them without reason. The amended filing also attempts to have the lawsuit reclassified as a class-action that could potentially represent millions of Microsoft's past and present minority employees. According to the document, only 2.6 percent of the company's 21,5000 workers in 1999 were black - and of those, only 83 were part of the 5,000 member management team.
Microsoft had no comment about the individual charges, only releasing a statement that said the company does not discriminate against anyone and has made many recent moves to increase the number of minorities on its staff. The statement was accompanied by statistics showing 22.2 percent of Microsoft's current 44,000 employees are from a minority - although not necessarily black. Strangely enough, this lawsuit is being judged by none other than Thomas Penfield Jackson, the same official who declared Microsoft a monopoly, ordered it split in half, and has recently been describing the company as arrogant and childish [see story below]. Microsoft's first defensive move in this case will most likely be to have Jackson replaced by someone without a pre-existing opinion of the company.
ALSO SEE: InfoWorld, The Standard, C|Net

COURT NOTES: On the morning of Friday, January 12, the government filed a brief with the appeals court encouraging it to let Judge Thomas Penfield Jackson's breakup order in the original antitrust trial stand. The document mostly rehashed previous arguments, along with a strong defense of the judge and his behavior in the trial since that's what Microsoft's lawyers intend to focus their defense on. The government brief was a response to one filed by Microsoft in November that did little but attack Jackson, attempting to make his final ruling appear biased and invalid [see Dec. 04, 2000 ]. Jackson hasn't made things any easier by commenting to the press about the trial since its completion, but as the government filing said, Jackson's statements "aren't really biased, because if a judge hears all the evidence and concludes one party is a liar and says one party is a liar, that's not bias." Very well said, but the panel of judges in the appeals court may not feel that way. Microsoft will get a chance to respond to this filing on January 29, and then both sides will get a few days of oral arguments around the end of February. That will, we hope, be about the end of this thing, but Microsoft will probably find some reason to drag it on out a few more months and make the decision even less relevant to its current position.
ALSO SEE: InfoWorld, The Register, The Standard, Court Site

Meanwhile outside the courtroom, Judge Jackson made things harder for the government by giving yet another interview about the case and his opinions of Bill Gates, Microsoft's lawyers, and other issues surrounding the landmark antitrust trial. In the January 8 edition of The New Yorker, Jackson compared Gates' self perspective to Napoleon's, someone with "an arrogance that derives from power and unalloyed success, with no leavening hard experience." He then went on to attack other company executives who "don't act like grownups," such as chief lawyer William Neukom whom Jackson described as being not very smart. On the other hand, Jackson saved rare praise for government attorney David Boies, apparently one of the best the judge has ever seen. While his opinions may be valid (they're similar to ours), Jackson could end up destroying the government case by appearing to be biased against Microsoft. Even if it is a bias he picked up during the case, the appeals court may not see it that way and toss out the entire trial.
ALSO SEE: Wired News, InfoWorld

In a Maryland courtroom, another judge dismissed 38 class action lawsuits filed by individual consumers who accuse Microsoft of violating the law by overcharging for Windows. More than 130 private antitrust suits were filed against Microsoft shortly after Judge Jackson ruled it a monopoly [see Nov. 29, 1999], but with the latest decision all but 24 of them have now been dismissed. In Maryland, like other states before it, the cases were dismissed because of archaic laws preventing indirect purchasers from suing a manufacturer - essentially, the consumers have no legal recourse against Microsoft because they bought Windows from a reseller instead of direct from the company. The remaining 24 cases are proceeding in states like California where the law is more flexible about indirect pricing.
ALSO SEE: InfoWorld, The Register

At the end of his keynote address for the Consumer Electronics Show in Las Vegas on January 6, Bill Gates officially unveiled Microsoft's Next Big Thing: the X-Box game console. Gates released technical specs for the device, then demonstrated some of its capabilities with some unbelievably clear games (especially unbelievable when you consider that the X-Box is based on Windows and some mid-level PC hardware). After the presentation, Gates went on the road to talk about the product on television, assisted by a professional wrestler calling himself The Rock. (It's only natural that Microsoft would tie itself to professional wrestling, since both are built on illusions and skilled acting.)
Despite the promotional tour and unrealistic drool-inducing demonstrations, Microsoft X-Box is still far from completion - the only ones produced so far have been test mules, the platform still has no finished game titles, and the fall 2001 launch date is so far away you can't even preorder one. The odds are better that your new PlayStation 2 will arrive before the X-Box ever hits store shelves, and the PS2 already has a pile of games (not to mention a better reputation than any Microsoft product). If you live outside North America the wait will be even longer since Microsoft has no plans to sell its console in Europe or Asia until at least spring 2002. The official reason for that delay is manufacturing capacity, but it's more likely that Microsoft isn't going to focus its Trojan Horse console on those markets because they're already saturated with TV-top gaming and Internet access devices.
ALSO SEE: C|Net, The Register, The Register

Since the controversial results of last year's US presidential election, the mainstream media and certain political types have been demanding a new way to vote. Several companies have jumped on the opportunities created by that situation, trying to develop a uniform method that will ideally be centrally organized and free of confusion. One of those companies is Unisys, generally known for its mainframe computers. In its quest to create the 'modern' voting system, Unisys has recruited two companies generally not associated with simplicity OR reliability: Microsoft and Dell. In its announcement of the partnership, Unisys said that Dell will provide hardware, Microsoft will develop the voting software, and it will work with both companies to integrate their technologies. IBM and several smaller groups are working on similar systems, so the Unisys/Dell/Microsoft coalition isn't guaranteed success - but if it wins out, we can look forward to a future filled with vote-related security problems, constant crashes, and a level of confusion among the computer illiterate that will make the process in 2000 look like a well-oiled machine in comparison.
ALSO SEE: C|Net

Retreating slightly from previous statements, at the annual Macworld Expo in San Francisco Microsoft announced its intentions to ship a version of Office designed for Mac OS X later this year. Earlier this year the company expressed very little interest in developing a version of Office for that Unix-based platform, but with the Macintosh community poised to adopt the operating system en masse, any applications not designed for OS X will soon be lagging behind. (Plus Microsoft would be violating the secret deal it apparently has with Apple that keeps Internet Explorer and Outlook Express bundled with every Mac sold.) Microsoft's Macworld representatives said that the OS X release of Office will ship sometime in the fall, only one year after the previous version of Office for the Mac was introduced - and six to seven months after Mac OS X goes on sale in late March.
ALSO SEE: Wired News, WinInfo

The latest addition to Whistler, Microsoft's replacement for Windows 2000, is a serial number based system to prevent privacy. (Ok, Microsoft officially claims that it prevents PIRACY, but the end result is the same.) As we understand it, the 'Windows Product Activation' system basically assigns an internal ID number to each copy of the OS when the CD is first run. Then when Whistler is installed it calls Microsoft and checks if the ID number is valid, comparing it to a database of previously used numbers. If the number has already been used on another computer, installation stops. If the number is unique the installation continues and the database records it so the same CD can never be used again. Testers are telling us that Microsoft also has plans to add the same system to future releases of Office and VisualStudio.
Whistler has also added a few other changes, including more adjustable appearance themes, psychedelic fading icons, and a new location for the Recycling Bin that, coincidentally, happens to be exactly the same one used by the Mac OS. In the first half of January, unreleased Internet Explorer 6 also made its Whistler debut, amid rumors that the product is about to be discontinued or radically modified in favor of its inbred sibling MSN Explorer, or replaced by the NetDocs interface. Apparently some Windows developers want to use MSN Explorer as the default interface for computer illiterate types who will be using the consumer system, while others want to use the businessy NetDocs interface instead of Explorer, and a third camp wants to stick with IE. The conclusion of this disagreement could result in yet another round of executive departures, something Microsoft can't afford much more of.
ALSO SEE: ZDNet, The Register, C|Net

Stock prices for embattled 'reverse auction' site Priceline.com soared by nearly 25 percent after it was announced that Microsoft and Expedia have settled a lawsuit the company filed against them. The 1999 suit accused Microsoft and its Expedia subsidiary (since spun off as a separate company) of violating a patent and breaking the law by misusing confidential information about Priceline's business model [see Oct. 25, 1999]. Apparently Expedia will pay Priceline a royalty for using its patent, but no other details of the settlement were revealed since both sides agreed to a confidentiality agreement - which generally means Microsoft paid through the nose to avoid embarrassment and future liability.
ALSO SEE: InfoWorld

Not content with its lock on selling to the computer illiterate and the slow, Microsoft is now targeting its products to the lazy as well. Microsoft and the La-Z-Boy furniture company are marketing the 'Explorer E-cliner', an overstuffed reclining chair integrated with a WebTV system. The $1000+ seat has a built in wireless keyboard and mouse designed to work with a Sony-built WebTV box and two months 'free' WebTV Plus service. For fashion-conscious slobs, the device is upholstered in cloth or vinyl and leather, and is available in a variety of colors.
ALSO SEE: C|Net, PC Pro

With Windows 2000 sales well below what Microsoft expected, the head of Win2K marketing has decided to retire from the company. 12-year Microsoft veteran Jim Ewel, once responsible for marketing NT Server and Backoffice, gave his notice in November and will work his last day on January 15. Platform Group VP Jim Allchin, back from a lengthy vacation, will take over Ewel's duties for the foreseeable future.
Following up a story we've mentioned before, on January 11 the FCC approved America Online's 'merger' with TimeWarner. The deal was approved with several restrictions, primarily one that forces the company to open its instant messaging services to competitors - a change Microsoft requested [see Dec. 25, 2000].
Desperate to appear relevant, MSN released a report claiming that its Internet Access unit now has 4 million subscribers, who spent an approximate $3.6 billion online during the 4th quarter of 2000. But that would add up to nearly $900 per user, as compared to the $170 average spent by AOLers who are generally considered to be the biggest online spenders. When pressed about the issue, an MSN spokesman admitted that the figure includes anything bought through a link or ad from an MSN Web site - purchases that probably would have been made anyway.
According to sources inside the company, Microsoft R&D is working on a Napster-like distributed file sharing system code named Farsite. There are apparently no plans to use the software, but if file sharing becomes more accepted by the music industry, Microsoft could integrate it with MediaPlayer and/or MSN Messenger to make those products more appealing and cut off the air supply to a few more competitors.

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