Small Company Encroaches on Microsoft's Space
A tiny company in Seattle is introducing a technology on Monday that industry analysts say could loosen Microsoft Corp.'s firm grip on the valuable real estate of personal-computer screens.
Microsoft sets the rules for how the main screens, or desktops, are used, because its Windows operating system has a near-monopoly in the personal-computer market. Personal-computer makers are permitted to put icons for starting software programs on the main Windows screen, but only within the Windows environment and in compliance with contract restrictions imposed by Microsoft.
The company's contract restraints on what PC makers can do with the Windows desktop are a key element in the antitrust suit filed by the government against Microsoft last month. The Justice Department and the 20 states that also sued the company argue that the restrictions represent an abuse of Microsoft's market power. Microsoft replies that its contracts protect the integrity and uniformity of Windows, and thus benefit consumers.
The Seattle start-up, Pixel Co., has a software innovation that is essentially an attempt to grab a slender band of the computer screen, just beyond the desktop and outside Microsoft's contract rules. It does this by occupying some unused screen space, called the overscan area, about 1/4-inch to 1/2-inch along each edge of the screen.
Pixel's product is a control bar called My Space that sits on the bottom edge of the screen, just below the Windows 95 task bar. By clicking on a My Space icon, a user can link to a site on the Internet's World Wide Web, control hardware like a CD player, or start software programs.
Packard Bell NEC, a large PC maker, plans to begin installing Pixel's software in its computers for the home market later this month, said Mal Ransom, a senior vice president at Packard Bell. "This should allow us to have a more interactive relationship with our customers, enabling us to connect them to any place we want to take them," he said.
Pixel says it is also talking to other PC makers.
Online information and commerce sites have signed agreements with Pixel to obtain prime placement of their icons on the My Space control bar, the company said. These include bookseller Amazon.com, ESPN, ABC News and Nasdaq.
Pixel would collect revenue both from license deals with PC makers and from fees paid by Web-site operators. Such arrangements would give computer companies and Web programmers prime places on the My Space bar, but the bar can also be customized by individual users -- adding or removing icons, or deleting the bar altogether.
Industry analysts who have seen Pixel's software are impressed. "Instead of just complaining about Microsoft's control of the screen, this company has figured out a way around the problem," said Rob Enderle, an analyst for Giga Information Group, a research firm. "This could be a technology with legs."
Computers are generally shipped with the slender bands of unused screen space partly to ensure that if the monitor is jostled in transit, none of the display is obscured. But many companies, schools and stores set up personal computers so that Windows occupies the entire screen, including the overscan area.
Still, Pixel's business plan rests on the assumption that the overscan area is open real estate -- outside Microsoft's direct control.
Pixel's managers and legal adviser are experienced in dealing with Microsoft. Pixel is a unit of Ark Interface II, a computer interface designer that until recently was a wholly owned subsidiary of Packard Bell NEC.
Ark had developed a "shell" program for Packard Bell in 1994, called Navigator, that ran on top of Windows 3.1 and tried to make computers easier to use. Last month, Packard Bell NEC sold Ark to a group of investors, including Pixel's management team.
Pixel, its managers say, was born of a sense of frustration with Microsoft's contract restrictions. "The contracts changed every year, and 15 months ago they really closed up," said Tom O'Rourke, the president of Pixel. "That forced us to think outside the box -- at least outside the Windows desktop."
The technical challenge of devising a way to use the overscan space fell to David Nason, Pixel's vice president of research, a computer scientist who formerly worked for Microsoft.
Pixel filed a patent application for its technology last November, and the patent approval process typically takes 18 months or so.
Pixel's legal adviser is Robert Steinberg, a partner at Irell & Manella in Los Angeles. Steinberg is an intellectual-property expert who wrote the patent for data-compression technology that became the center of a legal dispute between Microsoft and Stac Electronics Inc., which Steinberg represented.
In 1994, a jury ordered Microsoft to pay Stac $120 million for patent infringement. Microsoft appealed but settled the case for an estimated $50 million and took a 15 percent stake in Stac.
Pixel's patent application, Steinberg said, is intended to "protect the visual real estate" of the overscan area.
"The real question here is whether Microsoft is going to challenge this and claim that even the overscan area belongs to Microsoft," said Steinberg. "If it does, that would represent an aggressive expansion of its desktop, pushing others aside at a time when it faces a major antitrust case."
A spokeswoman for Microsoft said the company had not yet seen the Pixel software, and could not comment on it.
The New York Times
June 8, 1998
By STEVE LOHR
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Mike,
It looks like Pixel will share lunch with its big neighbor, but not anytime soon. What do think?
Thanks,
Beni Mick Mormony
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