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May 17, 2002—In this issue:
1. SHORT TAKES
- Microsoft Remedy Hearings: Judge Dumps on Microsoft Constitutional Argument
- Dude, You're Getting a Dell...Accessory!
- Six More Bugs? Could IE Be the Buggiest Software Ever?
- Microsoft Put RealNames Out of Business...or Did It?
- Napster Rides into the Sunset
- Office XP Sales Take Off
- HP Profits, Stock Surge
- Microsoft Issued Second Setback in Lindows Case
- Mac OS X Usage Disappointing
- Sega Dumps Hardware, Makes a Profit
- Not Windows: Attack of the Clones
2. ANNOUNCEMENTS
- Win a Free $200 Gift Certificate to RoadWired.com!
- Mobile and Wireless Solutions—An Online Resource for a New Era
3. CONTACT US
- See this section for a list of ways to contact us.
1. SHORT TAKES
(An irreverent look at some of the week's other stories, contributed by Paul Thurrott, [email protected])
This week, Judge Colleen Kollar-Kotelly provided some clues about her reaction to Microsoft's request to throw out the nine nonsettling states' case. Microsoft requested the case be dismissed because the company feels that the states don't have a right to pursue remedies in a federal case. The judge cited three reasons why the states could pursue their own remedies: an Appellate Court ruling that upheld the states' rights, the absence of legal precedents to the contrary, and the US Department of Justice's (DOJ's) endorsement of the states' rights even though the DOJ had already struck a settlement deal with Microsoft. When Kollar-Kotelly asked Microsoft attorney John Warden to cite one court ruling by the US Supreme Court or any other federal court in which US states were barred from seeking antitrust remedies that would be nationwide, or even worldwide, in scope, he was unable to do so.
In a bizarre fit of corporate hubris, Dell Computer has begun selling accessories labeled with the "Dude, you're getting a Dell!" tagline popularized by the company's 20-something spokesman, "Steve" (not his real name). You've probably seen Dell ads featuring the tow-headed youth, but few people are likely to want to advertise their susceptibility to marketing by wearing T-shirts, caps, or backpacks adorned with the catchphrase. Then again, I have an extensive collection of Microsoft-branded polo shirts. Maybe I should just shut up.
In what increasingly seems like a regular event, Microsoft has released a patch for Internet Explorer (IE) versions 5.01, 5.5, and 6.0 that fixes several vulnerabilities, some of which the software giant describes as "critical." The patch is the fourth such release for IE this year alone. Good thing Microsoft integrated IE with the underlying OS, eh? But wait, there's more: A group of security researchers says that the patch doesn't fix all the problems Microsoft says it will remedy, leading to the possibility of a future patch for the patch.
This week, a little-known company called RealNames charged Microsoft with corporate murder after the software giant refused to extend a licensing deal with RealNames, causing the smaller company to terminate its entire staff. RealNames had been providing an Internet Explorer (IE) feature that let users search for information on the Web by typing ordinary words in the IE address bar. Microsoft has described this feature as unnecessary, and more importantly, one that many of its customers never actually used. To hear RealNames describe the situation, Microsoft stabbed the company in the back and is secretly developing an inhouse RealNames-like technology. But the truth, of course, is a bit less one-sided. RealNames offered a fairly unexceptional service that could be (and was) duplicated by any number of competitors. More importantly, companies that signed on to the RealNames services expressed outrage when RealNames' prices rose dramatically after the first year. The lesson here is obvious: Don't put all your eggs in one basket, especially if that basket is a software-development monster with more than 25,000 programmers just waiting to turn your entire business into a single bullet point on a Microsoft PowerPoint slide detailing the features in its latest browser. Everyone loves to beat up on Microsoft, but the reality is that RealNames had a pretty tenuous business to begin with.
I'm amazed that Napster lasted this long. The one-time king of illegal file-sharing is finally taking its final steps into the grave. Napster announced this week that its founder and four other senior executives have quit the troubled firm, which was repeatedly sued by just about every major record label in existence and will soon be forced into bankruptcy. As with RealNames (see above), you have to wonder about the Napster business plan, which amounted to developing technology that's specifically designed to let users illegally share copyrighted music. After Napster was sued into submission, the company tried to launch a pay service, but of course, no one was very interested in that.
Microsoft announced this week that its latest office productivity suite, Office XP, has sold more than 60 million licenses in the year since it was released, 12 million of them in the Pacific Rim. The timing and scope of this information is interesting, considering that Sun Microsystems is launching a cheap but full-featured office-suite alternative, StarOffice 6.0, and—surprise, surprise—it's expected to be particularly successful in the Pacific Rim. There's nothing wrong with a little good-natured competition, of course, but is anyone else surprised to hear that Microsoft actually sold 60 million licenses to the rather lackluster Office XP? Don't get me wrong—Office XP is the best Office yet, but it's not significantly better than Office 2000. Why corporations would pay big bucks to get a minor upgrade is beyond me.
Say what you will about the new Hewlett-Packard (HP, or HPQ, as we like to call it), but the company's already off to a flying start. In its final earnings report before the merger with Compaq, HP posted a $252 million profit, which is five times as much as it made a year earlier, indicating that the company wasn't distracted by a brutal shareholder battle that almost scuttled the deal. Because HP and Compaq were on different fiscal cycles, the new HP will meet with analysts in early June to explain how the combined companies will report financials from now on. How the new company will fare going forward is, of course, a matter of conjecture, but it seems like it's done the right thing regarding the final product mix, which combines the best parts of the old HP and Compaq catalogs.
Seriously, guys: Give it up. A federal judge has denied a Microsoft request to bar a Linux distributor from using the name Lindows, which the company feels infringes on its trademark for the name Windows. Microsoft complained that the judge had a "fundamental misapprehension" of the issues at hand after the judge issued his original ruling, which questioned the validity of Microsoft's trademark because Windows is such a common term. In his most recent ruling, which amounted to "go stuff a sock in it," Judge John C. Coughenour said he made no legal mistakes and had properly upheld the test of generic use to the term Windows. The judge even pointed to Microsoft's own technical dictionary, which described the term in generic ways.
Pinning down the number of people who use alternative OSs such as the Mac OS or Linux is hard, but this week Apple CEO Steve Jobs admitted that the number of users upgrading to Mac OS X, his company's UNIX-based OS offering, is pretty disappointing. In an interview with CNET Networks, Jobs said that only 1 to 2 million people were actively using Mac OS X, though the company hopes to see 5 million active users by the end of the year. Particularly damaging is news that at least half the users who have received new Mac systems so far this year—on which OS X was preinstalled as the default OS—later switched back to the old OS 9 system. But the biggest problem, of course, is that OS X will do nothing to raise Apple's market share, an increasingly frightening situation for a company grappling with slowing demand.
A year after dropping its video game console to focus on creating software for a variety of platforms, Sega has posted a profit, its first in 2 years. Sega made $111 million in the most recent quarter, thanks to sales of games such as Sonic Hedgehog, World Series Baseball, and NFL 2K2, which now run on video game systems from Microsoft, Nintendo, and Sony. If we ever needed further proof that the real money was in the razor blades and not the razors, this is it. Congrats to Sega, which had been in the dumps since its Genesis system dominated the market in the early 1990s.
If you're a Star Wars fan—and chances are, if you're reading this, you are one—be sure to see "Episode II, Attack of the Clones" (AOTC) this summer, preferably on a digital-projection screen. This latest Star Wars film combines the fast pacing and comedy of the original series with a serious, surprisingly rich story, especially for long-time fans, who will appreciate the many in-jokes, references, and plot twists. Of course, we all know what happens in the end, but the plot twists alone make the ride worth experiencing. Lucas doesn't get enough credit for his storytelling: This is a must-see for every true sci-fi geek.
2. ANNOUNCEMENTS
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