WinInfo Daily UPDATE, December 22, 2004

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In the News

- EU Declines Microsoft Stay Request
- Xbox, Mysteriously, Is Sold Out
- Microsoft Sells Slate to Washington Post

==== In the News ====

by Paul Thurrott, [email protected]

EU Declines Microsoft Stay Request

In a 91-page ruling, European Union (EU) Judge Bo Vesterdorf, president of the European Court of First Instance, tossed aside Microsoft's stay request, deciding that the company must immediately suffer the consequences of its antitrust abuses in Europe. Previously, the EU fined Microsoft about $665 million and ordered the company to release a version of Windows without Windows Media Player (WMP) and to divulge secrets about its Windows Server products to competitors. Microsoft had sought to suspend the sanctions while it mounted a legal appeal.
"Microsoft has not shown that it might suffer serious and irreparable damage as a result of implementation of the contested decision \[during the appeal\]," Vesterdorf wrote in his ruling. "Microsoft's application for interim measures is therefore dismissed in its entirety."
EU representatives immediately expressed their relief at the ruling, which Microsoft critics had feared would be another instance of the software giant somehow getting yet another pass after a damaging legal defeat. "Today's order is important because it preserves the effectiveness of antitrust enforcement, in particular in fast-moving markets," an EU spokesperson said. "Implementation of the \[European\] Commission's March decision will not only benefit consumers of computer products in terms of choice of media players on computers and choice of work group servers, but also stimulate innovation."
Microsoft, for its part, expressed hope that the company could still settle the case and avoid a long legal battle. However, this week's ruling puts the company in a greatly disadvantaged position. "While the court did not find immediate irreparable harm from the Commission's proposed remedies, the court recognized that some of our arguments on the merits of the case are well-founded and may ultimately carry the day when the substantive issues are resolved in the full appeal," Microsoft wrote in a statement. But an EU spokesperson noted that it wasn't interested in renegotiating with Microsoft.
This week's EU ruling comes after more than 2 months of legal assessments by Vesterdorf, who oversaw hearings between Microsoft and EU lawyers in October. In a conference call with reporters, Microsoft said that it would begin shipping the media player-less Windows version to PC makers in January and to consumers in February and will work at doing an "excellent job" complying with the EU decision. The company claimed it had yet to decide whether to appeal the ruling.

Xbox, Mysteriously, Is Sold Out

You might have heard erroneous reports about Apple Computer's iPod being sold out this holiday season, but one of Microsoft's products has made that rarified list of gotta-have-it products that are suddenly and inexplicably unavailable for purchase. Like the wildly popular Nintendo DS handheld game system, the $150 Microsoft Xbox video game console is going-going-gone. So gone, in fact, that potential customers can't even order a unit from major electronics e-tailers for post-Christmas delivery.
The timing of the Xbox's mysterious disappearance is both puzzling and unexpected. Stacked boxes of rival Nintendo GameCube, a cheaper buy at $99, crowd the aisles at major electronic retailers. The Xbox's chief competition, the Sony PlayStation 2 (also $150), is almost as hard to find as the Xbox, but consider the chief reason: Sony recently revised its PlayStation 2 as a much smaller player with built-in Ethernet, jumpstarting sales. But unlike the Xbox, you can still order the new PlayStation 2 at many e-tailers, despite the fact that it's sold out at most brick-and-mortar stores. Why is the Xbox suddenly so unavailable?
One reason might be that Microsoft prepped the retail channel with a special Xbox holiday 2004 bundle that includes two free games--EA NCAA Football 2005 and Top Spin--for the same price that the company usually sells a bare console. But wouldn't the company keep some bare consoles in the channel for when the holiday bundles sold out? Some staff I spoke with at retail stores this week speculated that Microsoft might be prepping a smaller new Xbox, similar to the recent PlayStation 2 revision, for January. But I've heard nothing about such an update, and Microsoft never responded to my questions about the Xbox shortage yesterday.
Meanwhile, those people seeking an Xbox this holiday season are out of luck unless they bought early. However, game titles and accessories are readily available. So if you're the procrastinating type and don't mind the crowds, you're in luck. Aside from some Halo 2 shortages, you should have little trouble finding your favorite Xbox users something special.

Microsoft Sells Slate to Washington Post

Microsoft sold its highly regarded MSN Slate Magazine, an online publication, to "The Washington Post" yesterday for somewhere between $15 million and $20 million. Slate, with more than 6 million readers, is now breaking even financially, but its often-quoted editorials and articles have made it a media darling in recent years and legitimatized the Internet as a delivery vehicle for hard-hitting news and opinion.
Microsoft had been looking for a buyer for Slate since mid-2004, and the Web publication marks the last vestiges of an aborted late 1990s attempt to capitalize on the success of the Internet by getting into the content market. Back then, Microsoft content sites such as Slate and Mungo Park vied for surfers' eyeballs with catchy graphics, compelling stories, and multimedia content. Since that time, however, Microsoft has gone back to its roots and has left content creation to others, with its MSN unit handling virtually all the company's online services.
"MSN has evolved its content strategy to be more focused on the really large categories of information that people are interested in on the Web," Scott Moore, general manager of the MSN Network Experience told "The Seattle Post Intelligencer." "Slate is obviously a bit more of a niche category. We feel like there's a lot of untapped potential, revenue wise, that 'The Washington Post' will be well-suited to take advantage of."
"The Washington Post" reports that it will continue offering Slate as part of its Washington Post Newsweek Interactive group, which currently runs both "The Washington Post" and "Newsweek" Web sites. The company says it has no plans to change the editorial content at Slate.

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