TV-PGNovember 8, 1999: Is Microsoft finally ready to negotiate a reasonable settlement, or will Justice have to bust out the Big Stick O' Punishment? Meanwhile, Microsoft's competitors had a great day on Wall Street, including Apple, who almost broke $100, and while we hate to stir up old trouble, rumors of a forthcoming six-slot Mac have surfaced...
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Not Ready To Deal (11/8/99)
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So Judge Jackson has released his findings of fact in the "Redmond Justice" case, and to put it bluntly, things don't look so good for Microsoft. In fact, we'd have a harder time putting things more bluntly than the judge himself, who filled over 200 pages with such statements as "Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products." Heck, it doesn't get much blunter than that. And now, with the facts stacked against them, Bill and his One Million Lawyers™ may finally have to face a very harsh reality: there is just no way they're going to win this case. What Judge Jackson has done is tell the world that he's going to rule against Microsoft-- without actually making the ruling yet. In other words, Microsoft had better hammer out a mutually agreeable settlement with the government before the final verdict is made, or the company will be (and we believe this is the correct legal terminology here) "utterly screwed."

And yet, we're still a bit doubtful that Jackson's 207-page wake-up call was enough to smack Microsoft out of its collective haze of stubbornness and self-perceived invulnerability. After all, could anybody have watched "Redmond Justice" all those months and not have expected findings of fact just like the ones we got? The judge continually laughed at Microsoft's ridiculous gambits, yelled at their lawyers, and napped when he got tired of hearing the same unbelievable assertions over and over again-- the findings of fact we eventually got were inevitable. So if Microsoft was unwilling to deal before, we're not convinced that this is going to change anything. Will it really make a difference to them now that they're hanging by one thread instead of two?

Bill and his minions, for their part, continue to claim that they've always been open to a settlement that would "preserve their freedom to innovate." We looked that up in our Microsoft-English dictionary (what, you didn't realize that Microsoftians speak a different language? Why did you think Bill kept asking for word definitions during his videotaped deposition?) and it means that Microsoft is open to any settlement that will let the company "keep doing everything exactly the same, including strong-arm other companies 'cause it's fun and makes us lots of money." But if they think the government's going to accept a settlement that doesn't include some pretty big changes, they're even goofier than they appeared in court. According to an Associated Press article, the government isn't interested in seeking a fine; what reasonable fine could actually make a dent in a company with a market cap of $450 billion? Nope, the government wants a fundamental change in the way Microsoft conducts its business. Will that mean a breakup? Could be; we'll have to wait and see. And hopefully, in the meantime, Microsoft won't suddenly grow a sense of perspective-- a real settlement might kill all the fun.


 
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Their Loss, Our Gain (11/8/99)
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We admit it: Wall Street's reaction to the infamous "Redmond Justice" findings of fact surprised us a bit. Lots of people were expecting an overall market slump when Microsoft's stock spiralled out of control, but it wasn't meant to be. Microsoft's stock dropped about ten points early on, but then regained most of what it lost and closed at $89.94, only down $1.63. Evidently investors aren't quite ready to give up on Bill Gates and his moneymaking machine. Perhaps part of that confidence lies in the knowledge that Microsoft won't be losing any money from a hefty antitrust fine, since the government isn't looking for financial penalties... and if the company gets broken up into Babysofts, well, that's just more companies to make lots of money in illegal ways. (It's kinda like the magic broom in Fantasia.) So, yeah, Microsoft's still a sound investment, at least in the eyes of the Street.

What's interesting, though, is that while Microsoft's stock didn't lose much, according to a CNET article, the stock of companies that compete with Microsoft pretty much went through the roof. Take Red Hat, for instance-- the most famous company that's packaging, distributing, and supporting Linux saw its stock rise almost 20 points to close at $104. Not bad for a product that Judge Jackson referred to as a "fringe operating system." And then there's Be, those scrappy geeks cranking out the BeOS, once thought to be the basis for Apple's next-generation Mac OS. Be's stock rose a whopping 70%-- but before you get too excited, that puts it at $6.50 a share. The article also lists a handful of companies that make Linux applications, non-Office productivity suites, Linux servers, and other Microsoft-competing products-- all of whom saw stock gains ranging from 10-17%. Financially speaking, it was a good day to be a freedom fighter.

Which brings us to Apple. Holy yikes! We know we've been sort of sedate about AAPL's continuous all-time highs day after day after day, but Monday's activity really was exciting. Apple's stock rose over 9% to close at a whopping $96.38. That Bear-Stearns analyst who raised his AAPL twelve-month target price on Friday to $90-95? We guess he'll be raising that again real soon now. Now, of course any gains that result from a big, splashy news story are bound to level off pretty quickly, but still, seeing AAPL close in on $100 is a thrill-- and we don't even own any stock! Yes, Apple's stock is now higher than Microsoft's. Strange days indeed...


 
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Six-Slot Slickness (11/8/99)
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Have you noticed what happens to a lot of complaints about Apple? Irate customers yell and scream for a while, there's a big ol' ruckus, lots of columnists write nasty venomous articles, Apple does nothing, and eventually the whole issue sort of fades into oblivion. For example, remember all the teeth-gnashing that happened over the iMac's announced lack of a floppy drive? That used to be a hot topic. All sorts of people (PC users and Mac users alike) were predicting the iMac's utter failure because the floppy drive was such a necessary component. And when they failed to change Apple's mind and the iMac shipped floppyless, the predictions of doom continued-- until the sales numbers started rolling in. Then it became less a desperate howl and more of a sort of low grumble about how people who wanted a floppy drive would have to shell out additional bucks. But these days, no Apple product ships with a floppy drive, and (for the most part) people simply accept that if they really need one, paying $70 or so for a drive that few people need or want is just something they'll have to do. It's no longer a big deal.

We bring this up because we've noticed that the screams of rage demanding a six-slot Mac seem to have quieted waaaaay down these days. Remember when that was the hot topic? When the beige G3 came out, Apple was turning its back on the high-end professional users by making "pro" machines with only three PCI slots. A lot of people seemed to be on the verge of making death threats in order to get Apple to listen. And the blue and white G3 and the new G4 didn't improve upon things all that much-- they come with an extra slot, but it's filled with a graphics card, leaving the available slot count at three. In fact, since Apple removed SCSI from the motherboard, lots of pro users needed to fill one of those slots with a SCSI card, meaning that the number of slots has effectively decreased instead of increased. Yet, we hear a lot fewer complaints about this issue these days. It's probably because those people have decided to start yelling at brick walls instead, in the hopes that doing so might be more likely to produce results than yelling at Apple.

But is Apple listening? Mac OS Rumors claims that Apple's hard at work on the next iteration of the "Unified Motherboard Architecture," and that the new design includes "support for a second PCI bus, allowing up to six slots on desktop machines." The rumor is that Apple might ship high-end machines with three 33 MHz slots and three 66 MHz slots, in addition to the AGP slot reserved for the graphics card. If that's true, then we suspect lots of frustrated professional media creators will be jumping for joy when six-slot Macs return to Apple's product line sometime next year. Hmm, maybe those brick walls have friends in Apple's design department...


 
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