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Microsoft treads on live wire

The strategy is bold, but will it backfire? 15001/07/25 ReleVents hed: Microsoft treads on live wire dek: The strategy is bold, but will it backfire? By James Mathewson

Microsoft won a convincing victory. Microsoft lost, big time. Microsoft will emerge unscathed. Microsoft will still be broken up when the case returns to district. The variety of opinions bandied about in the wake of the appeals court ruling regarding Microsoft’s antitrust case boggles the mind. It started with both sides claiming victory after the ruling. And it continued with analysts (including myself, in my forthcoming September Insights column) putting a spin on the ruling.

The variety of opinions stems from the mixed nature of the ruling. On the surface, it seems Microsoft won, as the remedy aspect of the ruling was overturned. But a little digging, as eWeek did, shows that the court upheld most of the ruling itself. And the court did not rule out any particular remedy, it just overturned Judge Jackson’s remedies on procedural grounds. So, though the initial consensus favored Microsoft, cooler heads now favor Justice.

Microsoft is in a pivotal situation. It could continue its standard practices that led up to the antitrust mess. It could accelerate these practices, as it did after it appealed Jackson’s ruling, which culminated in the first beta of Windows XP. Or it could back off some of its aggressive bundling and other monopolistic tactics before its release of Windows XP, in the hopes that a new District judge will go easy on it.

A story on our site on Tuesday gives a good indication of Microsoft’s strategy. The strategy seems to be to stall as long as possible while giving the appearance of conciliation. It has backed off some of the bundling, especially Internet Explorer. Most of us see right through this–it is a thinly veiled attempt to sway the next court to go easy on Redmond. Problem is, the browser has near-monopoly status already, so this move is tantamount to allowing PC makers to ship PCs without Windows. Contrary to Internet Explorer, the products that will continue to be bundled in Windows XP–such as MediaPlayer–actually have competition, at least for the time being. Other aspects of the strategy, including refusing to support Java, show an acceleration of monopolistic tactics.

Fortunately, as a news story on our site today shows, nobody’s buying the ruse. Sen. Charles Schumer, a key member of the Judiciary Committee, outlines his concerns in the story, as he writes in an open letter (made available to our news service) to Microsoft CEO Steve Ballmer.

What we have is a race against the clock in which Microsoft needs to release Windows XP before the Justice Department gets a court order to delay the release of the OS, pending a definitive ruling from District. In the meantime, Microsoft is delaying action by appealing the aspect of the appeals court ruling that identifies bundling as a key element in Microsoft’s illegal monopolizing. If the appeals court denies this motion, Microsoft will be forced to completely rewrite XP, unbundling not only Internet Explorer, but a host of other utilities and Internet-related programs. If Microsoft releases XP before the court rules on its motion, it will almost certainly be broken up in District; XP is strong evidence that monopolizing is an institutional practice in Redmond, not just a one-time event that can be remedied through other means.

This is a bold strategy by Microsoft, one that should end in either total victory or total defeat. Microsoft has slithered through other tough places, but this one is the toughest.

James Mathewson is editorial director of ComputerUser magazine and ComputerUser.com.

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