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To: Benkea who wrote (37031)	1/8/2000 12:10:00 PM
From: Les H	Read Replies (2) \| Respond to of 99985

Microsoft Berra Berra Good for Economy: The New Deal A Chicken In Every Pot; An Internet Toaster-Oven in Every Kitchen Microsoft Stung by Rebate Deal Updated 4:25 PM ET January 7, 2000 SEATTLE (AP) - For a brief, shining moment, Bill Gates was buying hundreds of people in California and Oregon a new TV. Or VCR. Or breadmaker. Customers lined up outside Best Buy stores and other retailers in those two states for hours on Thursday to take advantage of a poorly worded contract that allowed them to get a $400 rebate on any purchase for signing up with Microsoft's MSN Internet service. What Microsoft learned to its dismay was that the contract also allowed customers to then cancel the service whenever they liked, and still be able to keep the rebate. "It doesn't feel immoral," said Jenny Ives, a 20-year-old college student in California who used her rebate to buy a breadmaker and a combination television-videocassette recorder. Once consumers started making a run on the stores, Microsoft realized what was happening and suspended the offer Friday morning. "This is just a shame, because this simply offered consumers an inexpensive way to get wired to the Internet," said Microsoft spokesman Tom Pilla. While the program was suspended in California and Oregon for now, Pilla said the company is reviewing the program in order to close the loophole and continue the rebates. At the Best Buy store in West Los Angeles, hundreds of people stood in line for more than three hours with televisions, computers, DVD players and other electronics. The queue stretched to the back of the store and snaked again to the front. "There wasn't a DVD player left. There were very few TVs left," said Becky McConnell, 23, of Los Angeles. "The shelves were really bare." Microsoft offered the rebate nationwide, reaching agreements with different retailers depending on the products they carry. In most states, anyone who cancels service in less than three years has to return the rebate, usually on a pro-rated basis. But Microsoft officials said provisions in state laws prevented them from adopting that provision in California and Oregon. California officials said the law was designed to prevent car dealers and mortgage lenders from forcing people to buy insurance from them in order to get financing. However, Microsoft officials feared the rebate program could be considered an illegal loan forced upon people wanting the $21.95-a-month Internet connection. "We wanted to do the right thing and stay within the bounds of the law," Pilla said. "If anything, we were interpreting the law far too conservatively." Officials in California have said they would not have gone after Microsoft for linking its rebate to an ISP contract. CompuServe, the other major online service that offers rebates, said it is having great success with its $400 rebate deal, which is also linked to a three-year contract for Internet service, and is not facing similar problems. "We researched this when we first offered the program, and went back and looked at it again this week," said Tricia Primrose, a spokeswoman for America Online, which owns CompuServe. "We believe it's completely legal, and it's been tremendously popular with consumers." While Microsoft has suspended the program, it will let people who canceled keep their rebates. It is expected Microsoft will reintroduce its rebate program - with stricter language closing the loophole - within the next week. Pilla would not comment on how many people took advantage of the offer, how many people canceled or how much money Microsoft lost. Still, some people seemed to have reservations about taking advantage of the Redmond, Wash.-based software giant. "I think there might be negative karma involved if I don't honor the deal," said Laura Howard, who also picked up a 27-inch TV at a Best Buy in Los Angeles by signing up for MSN. "I'm going to meditate on this tonight."