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

To: Brian Malloy who wrote (6663)	5/7/1998 8:46:00 PM
From: Mick Mørmøny	Respond to of 74651

"Media trial" of MSFT is unjustified. BN 5/7 Microsoft's Control of Desktop Is Focus of Probe (Update2) Washington, May 7 (Bloomberg) -- The U.S. Justice Department is training its sights on Microsoft Corp.'s control of the images a user sees after turning on a personal computer, according to documents filed in a federal appeals court in Washington. In a civil subpoena sent to Microsoft in January, federal antitrust enforcers demanded information on the restrictions the company places on computer manufacturers ''relating to the modification of the Windows startup sequence, desktop screen, or 'Windows Experience.'' The subpoena, attached to a Microsoft brief, also seeks information about the company's dealings with Internet service providers and software vendors as well as Microsoft's plans to release its Windows 98 operating system with a tightly integrated Internet Explorer browser. The document provides new details as the Justice Department and 13 state attorneys general decide whether to launch a broad antitrust suit against the software giant in the next few days. Federal investigators sought a wide range of information that could support a claim that Microsoft is trying to buttress and extend its monopoly in the market for PC operating systems. Shares of Redmond, Washington-based Microsoft fell 3 points to 83 3/8. Desktop Control Microsoft's control of the desktop and startup sequence has drawn fire from critics who say computer makers, not Microsoft, should control what appears on screen. Some PC makers have told the Justice Department privately that they want more control, the Washington Post reported last month. The desktop is the first screen from which users can launch applications after they turn on a computer. Microsoft requires that the Windows desktop feature icons providing direct access to a variety of Microsoft products, including its Internet Explorer browser and the company's online service Microsoft Network. The Justice Department could seek to allow computer makers to remove Microsoft's icons, possibly substituting icons for rival applications. ''That's important to Microsoft because it's their way of advertising,'' said Giga Information Group analyst Rob Enderle. ''If you sell products, you would like your product to be seen before anybody else's products are seen.'' A Microsoft spokesman wasn't available for comment. The company previously said it doesn't bar PC makers from adding icons to the desktop as long as they offer the complete Windows package, including the Microsoft icons. In the latest versions of the Microsoft operating system and Internet browser, the desktop also features the Active Channel bar, which allows computer users direct access to a variety of Internet sites, including several run by Microsoft. Microsoft critics say this gives the company the unfair advantage of controlling not only the pathway, but also the destinations to which it leads. Microsoft recently gave computer makers the option of removing the Active Channel bar. Financial Incentives The startup sequence includes the images that users see while the computer boots up, before the desktop appears. On Windows computers, the startup sequence now must include Microsoft's well-known Windows logo, although many computers first show the manufacturer's logo. The Justice Department could seek freedom for computer makers to feature their own logos for the entire sequence or to sell the space to other companies as a form of advertising. Microsoft also provides computer makers with a variety of financial incentives to ensure that Microsoft products are featured prominently in Windows, Enderle said. The Justice Department and state officials are expected to announce their next move before Microsoft ships Windows 98 to computer makers on May 15. The operating system is scheduled to be available in retail stores on June 25. The Justice Department, meanwhile, opposed Microsoft's motion to exempt Windows 98 from a Dec. 11, 1997, injunction. The court order, which Microsoft is appealing, orders the company to give PC makers the option of installing a version of Windows 95 without the Internet Explorer browser. The Justice Department said the federal district judge who issued the preliminary injunction, not the appeals court, could consider Microsoft's petition. ''The impending release of Windows 98 provides no basis for circumventing the district court,'' the Justice Department said. In the U.S. Senate today, Sen. Patty Murray, a Democrat from Washington, called on the Justice Department to end its ''media trial'' of Microsoft. ''I question if the Justice Department is indeed playing fair,'' Murray said, accusing prosecutors of leaking Microsoft developments to reporters. ''Today, I have again asked the attorney general to explain her failure to resolve this matter.''