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To: Eddie Kim who wrote (26483)	5/22/1998 4:22:00 PM
From: Roads End	Respond to of 97611

Eddie..The Alta Vista agreement should turn out to be a good one. The following editorial from Robert Bork appears in today's WSJ. Bork wrote this in response to an article appearing earlier in the week. His support of the DOJ's position surprised me at first but his case is sound and I wouldn't bet against him. A win for DOJ would be a win for Netscape and by the way Alta Vista too. The Most Misunderstood Antitrust Case By ROBERT H. BORK Of all the antitrust cases of recent memory, the government's case against Microsoft is the least understood by the public, the media and, indeed, the antitrust bar. This is not a case about "leveraging" or "tie-ins," as it is frequently described, even by government lawyers who understand the case. The core of the case is this: Microsoft now ships 97% of the personal computer operating systems on the market. That is the source of its extraordinary wealth. Not surprisingly, the company will do whatever it takes to keep that monopoly. We hear a lot about the next Bill Gates, grubbing anonymously in a garage creating the technology that will make Window 98 and its successors obsolete. What we don't hear is that that technology is already in its infancy, and Microsoft is determined to strangle it in its cradle. Hence the company's furious reaction to criticisms and to the government's lawsuit. Greatest Threats The two greatest threats to Microsoft's chokehold on operating systems are Netscape's Web browser and Sun Microsystems' Java, a language that works on any operating system. An even worse nightmare for Mr. Gates is the possible cooperation of Netscape and Sun to create a product that would bypass Windows altogether, making his company a mere competitor rather than a monopolist. To prevent that from happening, Microsoft employs a minefield of restrictive agreements that make it hard for rivals to attack, coupled with direct assaults upon Netscape and Sun. It will not do for my friend, George L. Priest of Yale Law School, to pooh-pooh Microsoft's restrictive agreements on the advertising of competitors' products, as the did on this page earlier this week. There are too many of these restrictions, and Mr. Gates too insistently denied their existence before the Senate Judiciary Committee (until he finally had to admit their existence), for us to take them as innocent. Microsoft licenses required computer makers to make no alterations in the first screen the user sees when he "boots up," forbade others from even mentioning to consumers the existence of competitive products, and required content providers to deal with no one else if they wanted to deal with Microsoft. No monopolist insists on such restrictions on a whim, or imagines that consumers will thereby benefit. Microsoft's insistence upon integrating its own browser with its operating system is a tactic deliberately chosen to bury Netscape. Why commentators overlook the plain evidence of a specific intent to monopolize is hard to fathom. A key Microsoft executive stated: "It seems clear that it will be very hard to increase browser market share on the merits of IE 4 [Internet Explorer version 4.0] alone. It will be more important to leverage [Windows] to make people use IE instead of Navigator." Microsoft's internal communications are replete with evidence of that sort. Mr. Priest warns of "theories of monopolization that have been discredited for decades." Indeed, the theories he cites are thoroughly discredited, but they have nothing to do with this case. Hypotheticals about General Motors including car radios as standard equipment or the only hotel in town offering free soap and toiletries are wide of the mark. No one any longer supposes that such tactics would provide a second monopoly profit on radios or injure competition by foreclosing competing grocery and drugstore sales. Microsoft's aim is entirely different: to preserve its world-wide monopoly in operating systems by stifling companies whose technology would compete. True, the company makes no additional monopoly profit; in fact, the tactic costs money because Microsoft prices its browser at zero. But that is a rational investment given Microsoft's enormously disproportionate resources and the fact that costs do not rise commensurately with output. These aspects of the software industry, among others, make predation a feasible tactic. The tactic is not feasible in the usual case where the predator and victim have resources in proportion to their market shares, and the predator's increased output causes costs to rise even more rapidly than the output. There being a plain violation of law, it would be remarkable if, as Microsoft claims, no beneficial remedy could be devised. Microsoft's defenders and Mr. Gates himself frequently voice the complaint that federal judges should not design computers or software. Closely related concerns are that the Sherman Act, which was written in the days of the oil and tobacco trusts, are outdated in a digital economy and that regulation of the industry would hamper innovation. In truth, the government does not propose to design software but only to enjoin monopolizing practices. Competition and monopoly, which Justice Oliver Wendell Holmes called "conditions . . . as permanent as anything human," have not changed since 1890, though our understanding of them has. Mantra The government's suit would in no way hamper innovation, though that is Mr. Gates's favorite mantra. It would allow innovation from many sources rather than just one. Should the government succeed, consumers will benefit from additional innovation and choice as well as from lower software prices.

To: Eddie Kim who wrote (26483)	5/22/1998 4:58:00 PM
From: ed	Read Replies (2) \| Respond to of 97611

If you look at the chart of CPQ in the last 100 months, you will see 5 pull backs from 1991 to 1998, i.e 1991 to 1992 last for 10 months 1993 last for 6 months 1994 last for 10 months 1995 last for 6 months 1997 to 1998 last for 9 months so far. So in the past 100 months, the stock pulled back for 41 months, and went up for 59 months, and the stock still appreciated from $3 to $27 1/2 as of today. So, the pull back of this round(from Sep of 98 to today) is close to its end, and once it starts to climb, it will be very fierce. I bet it will be the time the DEC deal is closed and all good news starts to comming out !!!!!