To: stockman_scott who wrote (165434 ) 5/18/2001 4:26:54 PM From: Brian Sullivan Read Replies (1) | Respond to of 176387 Microsoft Rivals Turn Up Political Heat newsfactor.com Rivals of software giant Microsoft (Nasdaq: MSFT - news) are turning up the political heat, accusing the company of plotting to monopolize the Internet through its new .Net strategy in the same way that it came to dominate desktops through its software. ProComp, a group funded by Microsoft competitors , is charging that the Redmond, Washington-based company is planning to use its new Windows XP operating system and .Net strategy to dominate the Web. The group claims that Microsoft will use its dominant Windows operating system and Internet Explorer browser to force consumers to adopt its .Net Internet platform. "This is happening under the nose of the Bush administration," Procomp president Mike Pettit told NewsFactor Network. Seeks Tough Penalties Pettit said a federal appeals court is still reviewing a landmark antitrust ruling against Microsoft. His group wants the government to seek tough penalties -- more than the "wrist-slap" settlement they fear is in the works. "Microsoft is continuing in its predatory ways, despite the ruling against its software business," Pettit said. Antitrust attorneys expect the federal appeals court to overturn a large part of a sweeping lower court ruling against Microsoft, including an order splitting the company in two. It appears likely that the Justice Department will settle the case, with Microsoft agreeing to a set of restrictions on its future business behavior. Microsoft's Future Is .Net Microsoft is committing much of its resources to the strategy. Chairman Bill Gates (news - web sites) on March 19th said the future of the company depends on the outcome of .Net, dubbed Hailstorm by the company. The company plans to convert its consumer software and some other services, such as online calendars and instant messaging, into fee-based Web services. Microsoft spokesman Jim Cullinan dismissed ProComp's charges, saying the group is recycling old allegations.Analysts Not Worried Analysts who cover Microsoft are not very concerned by the group's accusations."Microsoft is moving quickly to get in front of the competition," analyst Melissa Eisenstat of CIBC World Markets Corporation told NewsFactor."The company is working as hard on this project as it has on anything else in its past." Rick Sherlun, an analyst with Goldman Sachs, told NewsFactor: "Microsoft will be able to take advantage of 160 million Passport users to launch its initiative, and that is its competitive edge." Investors also appear to be happy with Microsoft's direction. Its stock is nearing a 52-week high of US$83 a share, after hitting a low of $40 at the beginning of the year. But Procomp persists, saying, "When consumers start Windows XP, they will have one browser, one e-mail product, one media player, one instant-messaging program." 'Eight-Headed Siamese Twin' "All of these are tied every which way you can imagine, like a big eight-headed Siamese twin," Pettit said. Most industry observers think the war of words against Microsoft is being fueled mainly by AOL Time Warner (NYSE: AOL - news), which is preparing for a battle with the software giant for leadership in Internet services. Earlier this week, Sony announced a partnership with AOL to provide Net access for its PlayStation 2 (news - web sites) game console. The alliance was established in part to help the companies fight their battle against Microsoft's upcoming Xbox (news - web sites) game console, and against the .Net initiative. The Sony-AOL deal will incorporate AOL's Instant Messenger, Netscape Navigator and Net access software into PlayStation 2 in time for holiday shopping.