The Konformist

January 2002

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Beast of the Month - January 2002

Steve Ballmer, Microsoft CEO

"I yam an anti-Christ..."

John Lydon (aka Johnny Rotten) of The Sex Pistols, "Anarchy in the UK"

"The Empire Strikes Back"

Title of Episode V in the Star Wars series


It all seems so quaint right now, those wacky 90's. Remember when the greatest political scandal involved president's lying about blow jobs rather than, say, the hugest korporate kollapse in history? Remember when adding ".com" to the end of a business name suddenly made it worth billions more? And remember when the greatest threat to mankind appeared to be a wealthy software nerd who seemed poised for revenge over years of being beaten up for his milk money?

Slick Willie may be gone and the Dot Com Boom may have gone bust, but Microsoft, Bill Gates or no Bill Gates, is as powerful as ever. And while Osama Bin Laden has replaced them (at least temporarily) as public favorite for likely anti-Christ, it would be best not to lose sight of the Goliath from Grungeopolis.

The opening to Microsoft has been more than partially due to changes in policy at the office under Attorney General John Ashcroft and "president" Bush. Despite rulings that Microsoft has violated federal antitrust laws (something, incidentally, that no judicial ruling has disputed) Shrub and Ashcroft had been eager to throw in the towel and cut a deal with Gates Inc. Previously, under the Klinton administration, the DOJ was pushing for a breakup of Microsoft - which would be quite reasonable, considering the comparisons to Standard Oil and Ma Bell - but now that plan has been scuttled. Plans were also dropped to charge Microsoft with illegally tying Internet Explorer to its operating system to destroy Web browser rival Netscape Communications. At the very least, the DOJ has made a negligent tactical decision: as Rich Gray, a Silicon Valley antitrust attorney who has followed the case closely, put it, "Microsoft has already won two major victories without ever having to appear before a new judge." Coincidentally, Microsoft gave $2.5 million to Bush and other Republicans in last year's campaign.

Rather than such stiff punishments for illegal behavior, the proposed settlement deal could've been written by Microsoft itself. As Sun Microsystems CEO Scott McNealy (admittedly a biased participant) put it, "Throughout the last century, the U.S. economy has profited greatly from sound antitrust enforcement. Today's agreement signals a retreat by the federal government, and a defeat for consumers." Adds Ken Wasch, president of the Software & Information Industry Association (SIIA): "The purported settlement permits Microsoft to continue to technically tie the monopoly product of the Windows operating system to various middleware products, in direct contravention to the findings of fact affirmed unanimously by the Court of Appeals." The most stinging criticism of the deal has come from Apple Computer (whose Mac Operating System is still far superior to Windows) which notes that part of the deal - the plan to donate $1 billion in free software and refurbished computers to 12,500 poor U.S. schools - appears to be a transparent subsidy for Microsoft itself, as it would be closely tied to the schools' adoption of Microsoft technology, giving the software giant "extraordinary leverage in public schools."

With little things like enforcement of the law out of the way, Microsoft has been using its muscle in recent ways that suggests that they still do mean business. In late October, Microsoft released Windows XP, the next generation of their OS which, surprisingly enough, has more features bundled within it to stifle competition (the crux of the anti-trust suit.) Then, in November, they released their Xbox, an attempt to compete with the Sony Playstation 2 and the Nintendo Gamecube in the home videogame market. Perhaps most disturbing, Microsoft stands to gain bigtime from the $47 billion acquisition of AT&T cable by Comcast. Thanks to previous investments in AT&T, Microsoft will now have inroads to not only influence Internet access of the country's largest cable combine, but what content it will provide via its services. (Microsoft is already a partner with NBC on MSNBC.)

Much of the credit for the return of the Microsoft tiger belongs to Steve Ballmer, the man who replaced Gates as CEO and The Konformist Beast of the Month. (Ballmer, of course, deserves Beastly honors for his bizarre "Monkeyboy Dance" at a Microsoft rally alone.) For most of the public, he is still known as merely the third richest dude from Microsoft after Gates and Paul Allen. That may be true, but that still means quite a bit: besides Bill and Paul, investor Warren Buffet, Oracle's Larry Ellison and the Walton family, no American has more wealth than he does. For all his faults, Gates, to his credit, was somewhat an arrogant renegade, which led to most of Microsoft's troubles. The partnerships with AT&T and NBC, along with the $2.5 million to GOP candidates, suggest that Ballmer has learned his lessons well.

Let's give the devil its due: Microsoft does provide good products and services to its customers, despite (or because of) the ruthlessly predatory business behavior it practices in battling Apple, Netscape, Lotus and a host of other companies and products. And for all its wealth, there are other companies (such as Enron and Lockheed) that have exploited far greater abuse of their power than MS ever has. That may change, and as Ballmer positions Microsoft to be more and more an insider, the threat of its influence on American industry becomes more and more threatening.

In any case, we salute Steve Ballmer as Beast of the Month. Congratulations, and keep up the great work, Stevie!!!




For more on the Monkeyboy Dance:

I Have Four Words for You...

Alex Burns, Disinformation ( )


Settlement Is "A Reward, Not a Remedy"

John Borland, CNET

2 November 2001


Justice Department backs off Microsoft breakup plan

Kristi Heim, Mercury News Seattle Bureau

6 September 2001


Microsoft Seen Winning in AT&T-Comcast Deal

Scott Hillis, Reuters

20 December 2001


Government's Antitrust Strategy Still Unclear

Dan Eggen, Washington Post

7 September 2001


Apple Calls Settlement 'A Massive Subsidy' For Microsoft

Brian Krebs, Washington Post

7 December 2001


Rivals, Others Lament Microsoft Deal

John G. Spooner, Stephen Shankland and Joe Wilcox, ZDNet News

November 2, 2001


The Konformist

Robert Sterling

Post Office Box 24825

Los Angeles, California 90024-0825

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