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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Charles T. Russell who wrote (33498)	11/9/1999 5:42:00 PM
From: John F. Dowd	Read Replies (2) \| Respond to of 74651

Charles: You sound like the judge. MSFT is guilty at once of too much innovation and at the same time not enough. Which is it? JFD

To: Charles T. Russell who wrote (33498)	11/10/1999 3:12:00 PM
From: RTev	Respond to of 74651

So the monopoly was good for the industry and the consumer in the short run. But as the OS begins to resemble a commodity perhaps the monopoly power of Microsoft places the real equilibrium price of the OS at too high a level. The consumer really isn't paying for innovation anymore. They're paying rent. That's yet another very important point that many on this thread and elsewhere are missing. The market has changed and is changing. What was good for the market seven or eight years ago might not be good today. The DOJ suit looks at a brief and uncommon period in Microsoft's history. From its start through '95, Microsoft had been ahead of the market. It doesn't matter whether they really innovated or just managed to embrace and execute better on the particular technology, Microsoft was picking the winners. GUI, CD-ROM, extensible API's, plug-and-play. Microsoft was able to move ahead of the market and pull others in its direction. I don't deny for a moment that Microsoft's leadership was vital to the industry in that epochal period. But this suit focuses on a short period in '95 to'97 when Microsoft took a wrong turn. When Bill Gates looked at the Road Ahead, he didn't see an open-standards internet as vital to the future of computing. In Microsoft's future world, that was to be a peripheral technology that would interact with a rich proprietary network. Just as he had recognized the value in Apple's GUI, so too, Gates recognized the value in AOL's closed graphic network offering. (And he recognized it when most folks dismissed it as a slow toy.) Unfortunately, he was wrong in this case. The extraordinary advance was coming instead from Jim Clark's new company. That was a problem. Even though Netscape blithely ignored or extended open standards, they had a good story. In its benevolent standards-setting phase, Microsoft had always depended as much on the story as they did on the technical implementation of a standard. The "story" came before the technical execution. It provided a roadmap for its own developments, and came to provide the map for others as well. [By the way. One could argue that Microsoft actually lost the battle they waged for the "platform" during this period since they were forced to give up much of their proprietary control of the platform to standards bodies.] But what to do about it? Since the fluid layered market has moved on to other concerns, it does no good for anyone to go back to that now ancient history. Even if Microsoft abused monopoly power in '95 and '96, it is possible that the filing of this suit was enough in and of itself to stabalize the market and bring it into competitive equilibrium. In a great article on the theory behind this case, a writer compared it to a dog chasing a fire truck. The DOJ dog had no choice but to give chase, but the question is always: What are you going to do when you catch it? It's an interesting possiblity that the chase alone might have been enough. It might have forced the Redmond fire engine to brake to avoid hitting the dog often enough to change its course.