MSBC NewsSource is currently being produced in a shorter format to give our writers and editors a well-deserved break. To make up for fewer reports, we are including an above-average number of links to reports on other sites that will make up the difference. Standard NewsSource production will resume on January 10, 2000.

COURT NOTES: Just as he promised last month [see NewsSource, Oct. 25], Judge Thomas Penfield Jackson handed down the first of three judgments in the Microsoft antitrust case at 6:30PM eastern time on a Friday. This particular Friday, November 5, will long be remembered in Redmond as a very dark day.
In his detailed 207-page finding-of-fact ruling, Judge Jackson sliced through Microsoft's defense, siding with the Department of Justice on nearly every point presented during the lengthy trial. In order, Jackson ruled that Microsoft does indeed hold a monopoly over PC operating systems, used that monopoly to exclude competitors like Netscape through software bundling, bullied Intel to stay out of the software market, polluted Sun's Java programming language, and threatened Apple, Compaq and IBM (among others) to get its own way. Jackson went on, saying innovations benefitting consumers "never occur for the sole reason that they do not coincide with Microsoft's self-interest." Most injurious, the judge found that Microsoft even reduced the quality of its own products just to hurt competitors - bundling a Web browser into Windows 98 did not benefit consumers, but in fact slowed down the operating system, decreased system stability and made it easier for "malicious viruses" on the Internet to attack computers. So much for the defense.
Microsoft reacted in their customary way, ignoring the facts in favor of attacking motives behind the case. In a special Saturday morning press conference, Bill Gates told a large gathering of sleepy reporters that the Department of Justice was only interested in "punishing a successful American company" that has continued to "improve products for the benefit of its consumers." The world's richest man went on to explain how Microsoft has, since its creation, struggled to make computers more affordable and easier to use through pure innovation. However, Gates added that "Microsoft is committed to resolving this case in a fair and responsible manner," leading many to wonder if Bill will now entertain the possibility of settling the entire matter before the judge hands down his next ruling.
That ruling, determining what laws were broken by Microsoft's behavior, will come shortly after the two sides present their own interpretation of the law in relation to Friday's ruling. The deadline for that part of the case is January 31, but if both parties complete their presentations it could come earlier. Following that decision, the sides will come back and present their proposed punishments for any laws Microsoft is found guilty of breaking. Judge Jackson would use those presentations to make a ruling about punishment, which Microsoft will immediately appeal. Unless the Department of Justice can speed up the appeals process, it could then be as long as five years before the case is finally finished - most likely in front of the United States Supreme Court. But by that time, none of the original charges will make an impact on Microsoft's business anyway.

Judge Jackson's complete Finding of Fact document is available online at the Department of Justice Web site

A negative judgment against Microsoft was expected to make an impact on the stock market, but that effect will likely be much bigger than anticipated because of a bad decision by the Wall Street Journal to add Microsoft, Intel and two non-tech stocks to its 103-year old Dow Jones Industrial Average stock index. The changes were announced in mid-October and took place on November 1, four days before the first antitrust trial ruling was handed down [see story above]. With Microsoft shares dropping better than 3 points in aftermarket trading following the decision, the stock is bound to fall by at least another 5 to 10 points after today's opening bell. That drop will affect the Dow index, making it appear that the entire market went down on the news - even though Microsoft competitors like Apple and AOL may well soar.

On October 19th Microsoft announced that its Most Valuable Professional program to provide free technical support in Usenet groups would be shut down on December 1. The news shocked the program's 600+ volunteer staffers, all of whom were to be replaced on Usenet by paid Microsoft Support crews. The program's termination would also eliminate the volunteer's primary forms of compensation - free subscriptions to Microsoft's Technet and MSDN, along with certificates for purchasing discounted software. The announcement was made without explanation, leaving many to wonder why Microsoft chose to end the successful (and inexpensive) five year-old program.
Even stranger than the decision to end the program was another announcement one week later saying it would remain in place after all with no changes beyond a new oversight committee. Microsoft claimed that the reversal was prompted by "thousands" of e-mails from upset MVP volunteers, but that would be impossible since The Behemoth previously said there are only 600 MVP volunteers in existence. More likely, the MVP's that do exist were so angered by the decision Microsoft decided it was better to lose face than alienate another group of certified professionals.

On November 3rd a federal judge ruled against Microsoft's motion for a summary judgment in Caldera's antitrust lawsuit against it, meaning a jury trial will begin on January 17 in Salt Lake City. In 1996 Caldera filed suit against Microsoft for using its desktop operating system monopoly to undermine Caldera's DR-DOS.
Banyan Worldwide announced plans late last month to discontinue its once-popular Vines networking software, a competitor to NT Server. Not coincidentally, Banyan was the recipient of a generous investment from Microsoft earlier this year [see NewsSource, Jan. 18]. The company will now reportedly refocus on its e-business services division.
As expected for some time, estranged Microsoft executive Brad Silverberg last week handed in his resignation. Silverberg, who has been on a 'leave of absence' since 1997, is generally credited with the development of Windows 3.1, 95, and Internet Explorer after Microsoft hired him away from Borland in 1989. The 45 year-old executive joins CTO Nathan Myhrvold and MSN head Pete Higgins on a lengthy list of high-level Microsoft executives that jumped ship in the last 18 months.

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