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To: GST who wrote (102093)	4/25/2000 7:57:00 AM
From: Eric Wells	Read Replies (2) \| Respond to of 164684

GST - you're showing yourself to be an economist, and yet, a neophyte when it comes to software development. I fail to see the reasoning behind your arguments that Microsoft products are "derivative products" (your words) and are therefore not innovative - employing your logic, every software product is a derivative product. But whether or not Microsoft products are "derivative" has no bearing on whether or not Microsoft should be broken up, the true issue at hand. Your words make it appear that you are are well-schooled in economic theory. Yet, economics - well, it's a theoretical science (if science is even the correct term). You seem to think that breaking up Microsoft will foster competition in the operating system market - yet your only basis for this is the following premise: if you reduce the power of Microsoft, that will allow other entrants into the operating system market and thereby foster competition, and as a result, be a benefit to the IT economy as a whole. This is a great theoretical concept - but I would argue that even if you broke up Microsoft, even if there was a separate company that makes only one product, Windows, that there is a good chance that this won't achieve the effect you desire. Why? Because I see the barriers to entry as being too high for most companies to take on the risk of investing the billions of dollars that would be required to develop and market a desktop operating system to compete with Windows on the PC. You continue to advocate the break-up of the company, yet you're writing as an economist, not as a legal expert. To suggest that a remedy is appropriate, more than economic theory must be taken into consideration - specifically law and precedent. It would be great if you would even just acknowledge this much. But somehow these points seem to escape you - or perhaps you are just ignoring them. I'm open to discussing with you whether or not Microsoft should be broken up. However, I'm not going to spend time debating with you the issue of the innovative nature of Microsoft products - your statements on the issue have been based solely on opinion, and nothing more, and they show a lack of understanding of the software industry on your part. And they have no bearing on the real issue at hand (whether Microsoft should be broken up). And do me a favor and answer me one question: do your arguments for break-up have any basis in legal precedent - or do they derive solely from economic theory? -Eric