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

To: Tung Ly who wrote (7104)	5/14/1998 4:16:00 AM
From: Dwight E. Karlsen	Read Replies (1) \| Respond to of 74651

Some new interesting articles, discussing coming govt action (I've clipped the more interesting parts below): States close in on Microsoft case Justice Dept. also reportedly ready to charge By Brenon Daly, CBS MarketWatch Wed May 13 21:01:00 1998 cbs.marketwatch.com "However, one top state official familiar with the broad-based action told CBS.MarketWatch.com that the state attorneys general would announce their case at midday Eastern time. But arriving at any decision in the Microsoft case will be a long time in coming. A similar government antitrust investigation into IBM dragged from 1969 to 1982 before the government gave up. "The (first) thing you can bet the farm on is that the case isn't going to be decided quickly," said Joe Sims, a partner at the Washington, D.C. law firm of Jones, Day, Reavis & Pogue. "The second thing is that this will not be solved by litigation. We're not going to see some Perry Mason-style resolution." "It's a hard case, with tough standards and the sides are inclined to fight to the bitter end," added Sims, who worked for the Justice Department when it brought its antitrust suit against AT&T. That case lingered from late 1974 to early 1982 before the telephone giant abandoned its effort. The Brookings Institute's Crandall points out that "by the time the (IBM antitrust) case was settled, it wasn't producing any of the products anyway." That could also be a concern in the Microsoft, which typically rolls out new product upgrades every two or three years. --------- And another good article Breaking up is hard to do Lawyers debate splitting up Microsoft Also: (links)ÿ New suit likely against Microsoft Sales projections for Windows 98 By Rex Nutting, CBS MarketWatch Wed May 13 20:06:30 1998 cbs.marketwatch.com "Realistically, it's highly unlikely that the Justice Department will ask for Microsoft to be split up. CBS.MarketWatch.com talked to two influential attorneys about breaking up Microsoft. In Microsoft's corner, Charles "Rick" Rule, former chief of the antitrust division at Justice, said no legal argument could justify breaking up Microsoft, what he called the "thermonuclear weapon" of antitrust law. In the opposing camp, Gary Reback, a Silicon Valley lawyer famed for tilting at Windows, said Microsoft should be broken up into as many as seven companies just as John D. Rockefeller's Standard Oil was. Rule, who is a legal consultant for Microsoft at Covington & Burling in Washington, said the premise of the antitrust argument is wrong. "Breaking up a company is a radical remedy," he said. "Microsoft's position in the market is not a monopoly. Microsoft hasn't been raising prices or eliminating competitors." "Microsoft doesn't have any power to force customers to buy their products," Rule said. "That means they have to bring new technologies to customers, just like every other company does." [this Gary Reback should be thrown into a rubber room -- the guy's a menace to PC users, IMO - D.K.]: "Suppose we were to take the source codes of NT, CE, Windows 98 and Office -- those are the core monopolies -- and we make four or five or seven copies," Reback said. Reback would split Microsoft into a handful of companies "and give each of the companies the same right to that code." They'd be well-funded and well-staffed, he said. Consumer confusion? But wouldn't consumers be confused and frustrated by having four or five operating systems. Doesn't the economy benefit from having a universalÿ operating system standard? Isn't that why Microsoft won the operating system war? Microsoft's successors "wouldn't break backward compatibility," Reback said. If a Microsoft spin-off added a new feature to its operating system, "it had better be good for consumers," he said, otherwise, third-party software vendors wouldn't write for it. "Consumers would have a choice," Reback said. "If you made a better browser, maybe they'd throw away theirs and use yours. That's a free market decision."