Why itemize it at all, if it were just part of the system?
Inventory purposes. Even though your invoice price said zero, the inventory software removed one MS-Office from Gateway inventory, and wrote the cost to Cost of Goods Sold.
Even if the OEMs did pay for MS Office and distributed it to every computer buyer, the effect is the same as predatory pricing. Their competition is just about dead.
I agree 100%.
Here is the way things have worked: The second desktop computer I purchased, I bought from Dell in Nov. 1995, a few months after Win95 was released. The package I wanted came with MS-Office; but like you, I didn't want it, because I already had Novell PerfectOffice 5.0, and I wanted to keep using that. So I asked that they remove MS-Office from the package, and reduce the price. Dell was at that time a pure "custom computer maker", so they removed MS-Office, and gave my system a $65 credit. In the intervening years, Microsoft evidently got the PC mfrs to sign "exclusionary" contracts, the same kind that they have always used with selling Win9x: Ship it on ALL computers that go out the door, and get it for this low price, pick and choose which PCs it goes out the door on, and pay more per unit. That's how MS has always sold Win95, and they evidently moved that model to MS-Office, because last year I shopped around, and neither Gateway or Dell would remove MS-Office, nor would they give a credit. The truth is though, that the DOJ doesn't care much about that, except to briefly mention the episode with IBM and SmartSuite.
But this practice of exclusionary contracts wrt Win9x and MS-Office may not be illegal by itself, except that, when looked at along with everything else that Microsoft has done through the years that had the same "I want to be the only one in the sandbox" taint...That's why Judge Jackson threw the book at them.
If you read the Conclusions of Law though, its mostly about Netscape and Sun being the poor victims, and practically nobody else. In that respect, the Judges findings come off sounding a lot like whining on behalf of Netscape and Sun.
There is definitely a part of me that feels that MS is reaping what they have sowed. Sadly, there are 100s if not more companies out there who have had the squeeze put on them by Microsoft; i.e. "do this or we'll crush you" type of bargaining. The best company is one that treats its vendors with the same respect that it treats its customers, and unfortunately MS falls off the cliff in that regard.
There are going to be 100s more civil lawsuits, in addition to the possible prospect of "disgorgement of profits" as penalty administered by the DOJ. IMO, Microsoft is entering a bear market which will last at least nine months, in which it will trade in a "cheap" range. The limited potential is not worth it for me to take another long position during this time. I'm looking at other stocks now. |
