Comes vs Microsoft Petition Shows How Microsoft Blocked Linux Sales

Some people wonder why OEM Linux preloads like this didn’t happen sooner. Don’t forget that a couple companies did make small attempts, but were smacked down (PDF warning) by Microsoft:

Microsoft’s Predatory Response to GNU/Linux

142. GNU/Linux is an “open source” operating system that runs on Intel-compatible PCs. Microsoft has targeted the competing operating system by pressuring Intel, as well as various major OEMs such as Dell and Compaq, to boycott Linux. In late 2000, for instance, Microsoft executive Joachim Kempin described his plan of retaliation and coercion to shut down competition from Linux: “I am thinking of hitting the OEM harder than in the past with anti-Linux actions” and will “further try to restrict source code deliveries where possible and be less
gracious when interpreting agreements – again without being obvious about it,” continuing “this will be a delicate dance.”

143. LindowsOS (now known as Linspire), which is developed and marketed by Lindows.eom, Inc., is an Intel-compatible PC operating system based on Linux and which competes directly with Microsoft on the. PC desktop. On information and belief, Microsoft interfered with Lindows.com, Inc.’s ability to distribute its product through the OEM channel. Microsoft also initiated a lawsuit against Lindows.com, Inc. that adversely affected
Lindows.com, Inc.’s ability to exist, obtain; funding and conduct business.

Microsoft’s Anticompetltive Agreements With OEMs To Foreclose Competition

144. Microsoft Chairman and former CEO, Bill Gates, reportedly summarized the effects of the DOJ’s 1995 consent decree–which banned “per processor” licenses, among other exclusionary licensing terms as “nothing.” Microsoft was able to devise other restrictive OEM agreements to foreclose competition in the OEM channel, notwithstanding the consent decree

145. A “per system” license was the practical equivalent of the “per processor” license. Under the “per system” license, the OEM had to pay royalties to Microsoft for every computer of a particular “model” or “system” that it shipped–again, as with the “per processor” contracts, regardless of whether the PC contained Microsoft’s operating system. Microsoft defined “system” and “model” so broadly in its contracts that virtually all of an OEM’s production was subject to Microsoft’s “double tax” if the OEM wanted to give the consumer a choice of operating systems. Microsoft did not agree to give up its “per system” licenses in the 1995 consent decree, even though the Department of Justice warned the federal district court that “per system licenses, if not properly fenced in, could be used by Microsoft to accomplish anticompetitive ends similar to ’per processor’ licenses”–and in fact were.

146. Another way that Microsoft found to circumvent the federal court’s 1995 injunction forbidding its use of “minimum commitment/per processor” licenses was what Microsoft calls its “Market Development Agreements” (“MDAs”). Microsoft contrived the MDA as a device to evade the Court’s decree prohibiting Microsoft from requiring OEMs to adhere to “minimum commitments.” As Steve Ballmer (Microsoft’s current CEO) acknowledged: “We have always given better prices to customers who work with us to make the market. Those used to take the form of commits [i.e., minimum commitments] which we do not do anymore as a result of the [federal court’s] decree but we still believe in rewarding people who help us create demand. Hence the iMDA.” Under the MDAs, Microsoft granted large discriminatory price concessions to those OEMs that would agree to market and promote Microsofl’s Windows to the exclusion of any rival operating system. These discounts were calibrated so as to force the OEM to sell most of its computers with a Microsoft operating system in order to obtain the lowest price.

147. Because the OEM market is so competitive and profit margins are so thin, every OEM had to get the lowest price it could :from Microsoft in order to survive. In March 2002, a Gateway marketing executive (Anthony Fama) testified before Judge Kollar-Kotelly in State of New York et al. v. Microsoft, Case No. 98-1233 (CKK), about how Microsoft used its MDA program in order to force OEMs to market Microsot~’s operating system exclusively: “Given the substantial nature of these discounts, participation in the MDA, as a practical matter, is not optional. In other words, not receiving :these discounts would put Gateway at a substantial competitive disadvantage, and Gateway has communicated that self-evident proposition to Microsoft.” Microsoft also used its MDAs to lock OEMs in and competitors out by offering a discriminatory price to the OEM in a later year provided (a) the OEM reached Microsoft’s imposed goal of Windows sales over competitive sales in the prior year and (b) renewed its exclusionary contract with Microsoft for ,the later year. This placed the OEM on a perpetual treadmill, eliminating competition indefinitely. Microsoft continued these exclusionary terms at least past April 2002.

148. One method for encouraging competition in the operating systems market would have been the sale by OEMs of “naked machines” (i.e., computers that are sold without a predetermined suite of software forced upon the consumer). “Naked machines” would allow consumers to choose their computer’s software configuration from an array of competitive software products, either for preinstallation by the OEM or installation by the end user. Microsoft sought and obtained the agreement of the OEMs to refrain from selling “naked machines.” Instead, OEMs universally agree to “bundle” Microsoft applications and operating systems with their computer hardware, effectively depriving consumers of any competitive choices. These restrictive agreements exited before 2000 but, in 2000, Microsoft ratcheted the restriction up so that OEMs are forced to forfeit all discounts otherwise earned if they ship any “naked machines” to consumers. This heightened restriction, which (on information and belief) continues to the present, prohibits PC users and PC retailers from buying and installing lower priced or better quality operating systems of their choice.

It’s great to see that the grip on the industry is no longer as tight and companies are a bit more free to do what they feel is in the best interest of themselves and their customers. We’ve got a long way to go, but we’re making steady progress.

–jeremy

Red Hat CEO Says He Talked Patents with Microsoft II

A quick follow up on this post based on some questions/comments that I got via email. First, no – I absolutely don’t think Red Hat is currently in discussion with Microsoft to sign a Novell-style patent deal. Note the bolding. They may very well be in some kind of discussion, but that is not necessarily a bad thing. If Microsoft privately went to Red Hat with potential patent infringements, even silly unspecified ones, then Red Hat would be obligated to address the issue. That would require discussion. It’s very tough to be the CEO of a public company these days. “No comment” is very often the only answer you can give without the MSM twisting your words in all kinds of directions. Also note that Red Hat may be in talks about specific and valid patents or talks about something completely non-patent related. Who knows – speculation on this is mostly useless. I do remain confident though, that a Novell-esque deal will not come out of this. Don’t forget that RHT is fundamentally an Open Source company. It’s in their DNA and it’s reflected in their employees and culture. Novell had one or two key people leave after they signed the deal. Red Hat would have an exodus. The C-level execs at Red Hat know this. They get Open Source at a very fundamental level themselves, in fact. The following is the last official statement I could find from Red Hat on this topic. In the end, I have no reason to believe that sentiment has changed.

“Red Hat has only recently been able to see some of the terms of the original Microsoft/Novell deal, due to the belated and redacted SEC filings that were made. Based on what we have seen, the deal is not interesting to us. Red Hat continues to believe that open source and the innovation it represents should not be subject to an unsubstantiated tax that lacks transparency.”

–jeremy

More Microsoft Patent Dealings

So, Linspire is the latest company to sign a patent deal with Microsoft. They’ve even managed to wrangle some additional items they claim are not in the other deals:

Linspire Inc. has announced an agreement to license voice-enabled instant messaging, Windows Media 10 CODECs, and TrueType font technologies from Microsoft for its Linux distribution. Additionally, Microsoft will offer protection to Linspire customers against possible violations of Microsoft patents by Linux.

In his June 14 weekly Linspire Letter, Linspire CEO Kevin Carmony stated, “This agreement will offer several advantages to Linspire Linux users not found anywhere else, such as Windows Media 10 support, genuine Microsoft TrueType fonts, Microsoft patent coverage, improved interoperability with Microsoft Windows computers, and so on.”

Linspire has always been more willing than most to include proprietary codecs and drivers, so this is no surprise. While I may not agree with their stance, I do think they are legitimately trying to improve the desktop Linux experience, and you can’t fault them for that (or at least I don’t). I do find it odd that they’d choose to have a demonstrably inferior product in Live Search be the default, but I digress. What’s troubling once again is the inclusion of dubious patent protection. Now, Linspire (nee Lindows) and Microsoft have a tumultuous history. In that vein, this post has some interesting tidbits.

We now have three Linux distributions wrapped up in this patent debate. It was speculated that Mandriva may be next. Based on the profile of the latest two companies, it seemed a logical guess if you had to make one. It’s good to see that they have gone on the record saying that it’s not going to happen. Red Hat already rejected the idea and Mark made his feelings very clear in this post:

There’s a rumour circulating that Ubuntu is in discussions with Microsoft aimed at an agreement along the lines they have concluded recently with Linspire, Xandros, Novell etc. Unfortunately, some speculation in the media (thoroughly and elegantly debunked in the blogosphere but not before the damage was done) posited that “Ubuntu might be next”.

For the record, let me state my position, and I think this is also roughly the position of Canonical and the Ubuntu Community Council though I haven’t caucused with the CC on this specifically.

We have declined to discuss any agreement with Microsoft under the threat of unspecified patent infringements.

Allegations of “infringement of unspecified patents” carry no weight whatsoever. We don’t think they have any legal merit, and they are no incentive for us to work with Microsoft on any of the wonderful things we could do together. A promise by Microsoft not to sue for infringement of unspecified patents has no value at all and is not worth paying for. It does not protect users from the real risk of a patent suit from a pure-IP-holder (Microsoft itself is regularly found to violate such patents and regularly settles such suits). People who pay protection money for that promise are likely living in a false sense of security.

I welcome Microsoft’s stated commitment to interoperability between Linux and the Windows world – and believe Ubuntu will benefit fully from any investment made in that regard by Microsoft and its new partners, as that code will no doubt be free software and will no doubt be included in Ubuntu.

He also goes on to state why he dislikes OOXML.

With regard to open standards on document formats, I have no confidence in Microsoft’s OpenXML specification to deliver a vibrant, competitive and healthy market of multiple implementations. I don’t believe that the specifications are good enough, nor that Microsoft will hold itself to the specification when it does not suit the company to do so. There is currently one implementation of the specification, and as far as I’m aware, Microsoft hasn’t even certified that their own Office12 completely implements OpenXML, or that OpenXML completely defines Office12’s behavior. The Open Document Format (ODF) specification is a much better, much cleaner and widely implemented specification that is already a global standard. I would invite Microsoft to participate in the OASIS Open Document Format working group, and to ensure that the existing import and export filters for Office12 to Open Document Format are improved and available as a standard option. Microsoft is already, I think, a member of OASIS. This would be a far more constructive open standard approach than OpenXML, which is merely a vague codification of current practice by one vendor.

The speculation as to what Microsoft’s end goals are with this remain all over the map. I maintain they themselves may not even be sure yet. One might think they are trying to fracture the Linux market – a sort of divide and conquer. As long as Ubuntu and Red Hat remain on the other side, however, that plan isn’t going to work. The only real loser in that scenario would potentially be Novell. It’s clear that smaller, desktop oriented companies are their current sweet spot, which says a lot in my opinion. Not sure where this is all going, but it’s getting more interesting to watch by the day. Stay tuned.

–jeremy

Linux leaders plot counterattack on Microsoft

This is from an article recently posted to Reuters about the Linux Foundation Collaboration Summit:

Dressed in the alternative software movement’s casual uniform of T-shirts and jeans, the group is coming to grips with internal divisions that sap at its success — Linux is now used to power desktop computers, major Web sites, mobile phones — since rival factions often create very similar products.

But as many of the world’s top tech companies and corporate customers demand ever more from Linux, open source devotees still fight among themselves with the fervor of a tiny monastic order seeking to root out theological error in their midst.

“Guys: Be seekers of truth, not finders of contradiction,” Jim Zemlin, executive director of the Linux Foundation, organizer of the event, only half-jokingly told the 150 attendees of what is billed their “Collaboration Summit.”

Collectively, the group is militantly opposed to Microsoft, which some attending the summit openly refer to as “the enemy.”

The thing I really don’t like about the article is the headline. It’s an attention grabber, meant to pull in readers. But, the fact is that nothing could be further from the truth. Having attended the event I can say the the subject of Microsoft was barely even broached. In fact, one of the panels included some of the best Open Source lawyers on the planet. The likes of Andrew Updegrove, Karen Copenhaver and Mark Radcliffe. The audience could ask this ridiculously prodigious group any questions they wanted. The recent Microsoft patent deals were not brought up a single time to my recollection. This summit was about how to better work together within our community, how to collaborate with each others in ways that make sense, how to improve freedom and how to build the absolute best products and services in the world. That’s a change from some events in the past, where it was about Microsoft. It’s good to see we’ve moved on to more important things. Yes, some people do disagree on some things. We’re able to rationally discuss those points as a community though, and through it all that makes us stronger. If 100% of the people in your organization agree on everything, you’re either not doing anything interesting or people are just scared to speak up. Both are bad.

–jeremy

Cautiously Optimistic

(via tbray) Here’s something you don’t see every day. A lawyer… from a large enterprise company (SUNW)… talking publicly about pending litigation… and sounding both reasonable and human in the process ;) It’s a brave new word. The topic? Patent troll cases. Two of them, both ludicrous from the looks of it. There is hope though:

You may believe that these are isolated examples. However, during the same time Sun was sued in these two cases, eight mobile phone companies, four major internet retailers and three computer companies were all sued for infringement by patent holding companies.

If this sounds like a waste of time, money and resources – it is. But, there have been some recent changes, both legislative and judicial, that make me feel at least a slight bit optimistic for a change.

On April 18th of this year, a bipartisan and bicameral bill was introduced in Congress entitled the “Patent Reform Act of 2007”.

Recently, the U.S. Supreme Court also announced two important decisions that provide more immediate relief. In Microsoft v. AT&T Corp. the court ruled 7-1 that “golden masters” shipped by Microsoft for installation on computers made and sold abroad are not “components” pursuant to 35 U.S.C. Sec. 271(f). Under U.S. patent law, no infringement occurs when a product that is the subject of a U.S. patent is made or sold in another country. It may be an infringement of a foreign patent, but U.S. patent laws do not apply. The exception is Section 271(f) which was enacted in 1984 in response to a case involving (of all things) shrimp deveining equipment. The defendant in that case conceded that it was prohibited from making or selling the infringing equipment in the U.S., but successfully argued that there was nothing in the law that prevented it from making the components for the equipment in the US and then having the assembled abroad.

and

In the current case, Microsoft conceded that it infringed AT&T patents related to digital speech compression. But, they objected to AT&T’s claim that a golden master should be considered a component under 271(f) and Microsoft, accordingly, liable for foreign damages.

In siding with Microsoft’s position, the court has brought some rationality into the world of software patents. Indeed, many in the software industry have been watching this case closely and considering whether (assuming the original decision was unchanged) it would be a reason for moving development efforts offshore.

How ironic that it was a Microsoft assertion that “brought some rationality into the world of software patents”, but there you have it. Hope that the pendulum may be swinging back to a more reasonable landscape where real innovation is protected and encouraged while litigious bastards, patents trolls and asininely obvious “innovations” are seen as such. At this point, I’ll take slight optimism. It’s a start.

–jeremy

Kudos to Bill Hilf

As the head of Microsoft’s Linux Labs, Bill Hilf needs to have thick skin. I’ve seen Bill speak a number of times and despite his employer I was surprised to see some of his recent quotes:

“They are full-time employees, with 401K stock options. Some work for IBM or Oracle. What does that mean? It means that Linux doesn’t exist any more in 2007. There is no free software movement. If someone says Linux is about Love, Peace and Harmony, I would tell them to do their research. There is no free software movement any more. There is big commercial [firms] like IBM and there is small commercial [firms] like Ubuntu,” he said.

While it should come as no surprise that part of the issue here is overly-sensationalist journalism (a topic I have covered multiple times), it still takes a solid person to make a public correction… as Bill has:

A few folks have emailed or called me about statements I said in the Bangkok Post about the ‘end of Linux’ and ‘there is no free software movement.’ My statements were shaped in a sensationalist way, not surprisingly, this isn’t the first time the press has used shock value to get headlines. It then hit Slashdot and the blogosphere where a couple hundred people have called me every name under the sun. I have a tough skin – need to in this job. But days like this suck, to be honest.

I get asked Linux related questions from the press, most of which are probably obvious to you. One of the questions I often get asked is about the development of Linux by free software developers. I answer this by saying that most customers who use Linux, use a distribution like Red Hat or Ubuntu or SuSE and that although there are certainly a lot of developers who work for free, most of the people who do the daily work on the Linux kernel are paid to do so. Typically they are paid by IT companies who have a commercial interest in Linux. This isn’t FUD, it’s reality (Corbet from LWN did a great analysis of this here citing “at least 65% of the code which went into 2.6.20 was created by people working for companies”). And I answer this question because I get asked about it in press interviews.

But I’m rethinking that last part. Mostly because I don’t think it matters. If the software is open, it’s open, that does not change based on who developed it or why. In this article it sounds like I say ‘because they are paid, then free software is extinct!’ which, of course, is silly. I know this and I think it’s a combination of me not being clear and this particular article shaping it in a certain direction. But I’ll take the blame: I shoved my foot in my mouth and it came across as idiotic.

Thanks for the clarification, and I look forward to the promised comments on the recent Fortune story on ‘Microsoft versus the Free world’.

–jeremy

Microsoft takes on the free world II

(a follow up to this post) As was expected, nearly everyone is commenting on the recent Fortune article about Microsoft and Patents. Even Linus has weighed in:

“It’s certainly a lot more likely that Microsoft violates patents than Linux does,” said Torvalds, holder of the Linux trademark. If the source code for Windows could be subjected to the same critical review that Linux has been, Microsoft would find itself in violation of patents held by other companies, said Torvalds.

“Basic operating system theory was pretty much done by the end of the 1960s. IBM probably owned thousands of really ‘fundamental’ patents,” Torvalds said in a response to questions submitted by InformationWeek. But he doesn’t like any form of patent saber rattling. “The fundamental stuff was done about half a century ago and has long, long since lost any patent protection,” he wrote.

“So the whole, ‘We have a list and we’re not telling you,’ itself should tell you something,” Torvalds said of Microsoft’s stance in the Fortune story. And for good measure, he added: “Don’t you think that if Microsoft actually had some really foolproof patent, they’d just tell us and go, ‘nyaah, nyaah, nyaah!'”

There’s so much good commentary on this this it’s not possible to link to everything, but I’d like to highlight a few. The OIN has posted a press release that contains some “facts to provide clarity around Linux and patents” and also points out that “In less than a year, OIN has accumulated more than 100 strategic, worldwide patents and patent applications that span Web / Internet, e-commerce, mobile and communications technologies. These patents are available to all as part of the free Linux ecosystem that OIN is creating around, and in support of Linux. We stand ready to leverage our IP portfolio to maintain the open patent environment OIN has helped create.”

Sun CEO Jonathan gives an extremely apropos summary of what Sun did when faced with adversity and pressure in its market:

So what’s my view on this interview in Fortune – in which one of Sun’s business partners claims the open source community is trampling their patent portfolio?

You would be wise to listen to the customers you’re threatening to sue – they can leave you, especially if you give them motivation. Remember, they wouldn’t be motivated unless your products were somehow missing the mark.

All of which is to say – no amount of fear can stop the rise of free media, or free software (they are the same, after all). The community is vastly more innovative and powerful than a single company. And you will never turn back the clock on elementary school students and developing economies and aid agencies and fledgling universities – or the Fortune 500 – that have found value in the wisdom of the open source community. Open standards and open source software are literally changing the face of the planet – creating opportunity wherever the network can reach.

That’s not a genie any litigator I know can put back in a bottle.

There’s one recurring theme that you’ll see in most of the commentary. This action is fairly definitive proof that Microsoft sees clear and imminent danger. They, for the first time in a long time, see something they can’t kill. It’s starting to show that they don’t know exactly what to do next. Stephe, a former Microsoftie, has the following advice:

Microsoft needs to get back in the business of building exceptional solutions to customer problems, instead of chasing a 1990s dream of IBM’s secondary revenues from hardware patent licensing, or worse yet threatening those same customers.

[Disclaimer: Microsoft is a client. But I swear I’m reconsidering that decision. It’s unclear to me that the mortgage payment is worth this much aggravation.]

What Microsoft will do remains to be seen. It seems the current near-universal consensus is that they won’t sue anyone, but will continue to try to squeeze money out of those willing to pay or partner, while figuring out the next strategic move. That may have an unintended consequence though. I’ve heard Don Marti say many times that much of the software industry is really a recruiting contest. You need look no further than Google for proof of this. The really smart engineers though, like to build cool software… not win by (or even have to deal with) litigation. Now sure, Microsoft has a lot of money to throw at the problem, but with a fairly stagnant stock price and plenty of companies doing really interesting things, money is no longer going to be enough to keep the very best. The long term implications of that should not be underestimated. Neither should the disruptive force of Open Source. Will either lesson be learned?

–jeremy

Microsoft takes on the free world

Some thought it was inevitable, while other thought it would never happen. From a recent Fortune article:

Free software is great, and corporate America loves it. It’s often high-quality stuff that can be downloaded free off the Internet and then copied at will. It’s versatile – it can be customized to perform almost any large-scale computing task – and it’s blessedly crash-resistant.

A broad community of developers, from individuals to large companies like IBM, is constantly working to improve it and introduce new features. No wonder the business world has embraced it so enthusiastically: More than half the companies in the Fortune 500 are thought to be using the free operating system Linux in their data centers.

But now there’s a shadow hanging over Linux and other free software, and it’s being cast by Microsoft. The Redmond behemoth asserts that one reason free software is of such high quality is that it violates more than 200 of Microsoft’s patents. And as a mature company facing unfavorable market trends and fearsome competitors like Google, Microsoft is pulling no punches: It wants royalties. If the company gets its way, free software won’t be free anymore.

The conflict pits Microsoft and its dogged CEO, Steve Ballmer, against the “free world” – people who believe software is pure knowledge. The leader of that faction is Richard Matthew Stallman, a computer visionary with the look and the intransigence of an Old Testament prophet.

Then come the details:

Microsoft counters that it is a matter of principle. “We live in a world where we honor, and support the honoring of, intellectual property,” says Ballmer in an interview. FOSS patrons are going to have to “play by the same rules as the rest of the business,” he insists. “What’s fair is fair.”

Microsoft General Counsel Brad Smith and licensing chief Horacio Gutierrez sat down with Fortune recently to map out their strategy for getting FOSS users to pay royalties. Revealing the precise figure for the first time, they state that FOSS infringes on no fewer than 235 Microsoft patents.

The 235 number is fairly close to the previously given (and disputed) 228. While the lengthy article does get some minor details wrong, it’s a good way to get up to date on the situation if it’s not one you’ve been following. On to why Microsoft choose to do this now. It could be that they think the GPLv3 has teeth and are trying to get out ahead of its release. It could be that they’ve not been as effective as they thought they’d be at battling Open Source and Linux more directly. Regardless of the reason, I agree with Larry:

If Microsoft believes that Free and Open Source Software violates any of their patents, let them put those patents forward now, in the light of day, where we can all evaluate them on their merits. If not, then stop trying to bully customers into paying royalties to use Open Source. It’s time for Microsoft to put up or shut up.

(Tim put it nice and succinctly: Four Words for Microsoft: Litigate or shut up

It appears that the battle lines are being drawn and the cold war of software patent world may be coming to an end. The players involved here are huge and the amount of money astronomical. Who has the most to lose? I’d say Microsoft. How will this play out? We’ll all be watching closely, that’s for sure. One has to wonder how Novell feels about their recent deal right about now.

–jeremy

State Open-Source Bills Get Microsoft's Attention

(via Stephe) The WSJ has an article up (also at MarketWatch) about Microsoft’s battle with State governments over ODF adoption. Stephe digs into the Microsoft site to see what their opinion was in the past. From the WSJ article:

The impetus for the Texas bill was similar to that in other states — a desire to ensure access to archived and current documents regardless of which company’s application is used to open them, and lower costs. “If the state could have these companies compete against each other, it would save taxpayers millions of dollars,” Mr. Veasey said.

Dr. Homan said he first became interested in the open-document-format issue when Florida’s Department of Health requested renewal of a three-year software agreement with Microsoft at a cost of $12.4 million. “I thought, man, that’s a lot of money, and that comes up every three years.”

Dr. Homan said Florida and other states could save money with genuinely open formats, because they are designed to work with other, conceivably lower-cost document applications than what Microsoft offers, such as the open-source technology OpenOffice. The idea is that not only state workers but also constituents could use such cheaper options.

“Microsoft sees what’s coming. Things like Word and Excel are sort of like a drug now getting ready to go generic,” Dr. Homan said.

That last sentence nails it in a clearer way than I’ve seen elsewhere. Despite what Microsoft lobbying may attempt to assert, real competition here would be good for State governments from a cost perspective. Even bigger to me though is the freedom state constituents would gain for accessing information they have a right to. With Office counting for Billions in revenue though, Microsoft has a fiduciary duty to downplay that. And they are. Will they be able to make a convincing enough argument to stave off the growing ODF swell? We’ll see.

–jeremy

Microsoft Urges Review of Google-DoubleClick Deal

It’s amazing how quickly things change sometimes. Microsoft, the consummate anti-trust defendee, is now asking for help from antitrust authorities. From the NYT article:

Microsoft, a veteran defendant of epic antitrust battles in the United States and Europe, is urging regulators to consider scuttling Google’s plan to buy DoubleClick, an online advertising company.

Microsoft contends that the $3.1 billion deal, announced on Friday, would hurt competition in the fast-growing market for advertising on the Web and raises questions about how much personal information would be collected by Google, already a dominant player in online advertising.

Bradford L. Smith, Microsoft’s general counsel, said in an interview yesterday that Google’s purchase of DoubleClick would combine the two largest online advertising distributors and thus “substantially reduce competition in the advertising market on the Web.”

Google dismissed Microsoft’s assertions. “We’ve studied this closely, and their claims, as stated, are not true,” Eric E. Schmidt, the chief executive of Google, said in an interview last night.

I’d guess many will find this ironic. Microsoft clearly had a different take on “substantially reduced competition” when they were on the other side of the equation. I think this marks a watershed moment for Microsoft. They may have hit the realization that they are unable to effectively compete in a certain market. They’ve thrown money and resources at the situation with little results. The fact that they, of all companies, are so quickly asking for this is indicative of their current situation. It’s even more ironic considering that any deal this big surely would have been throughly reviewed anyway. They’re showing just how weak their position is, with little upside from my point of view. One thing is clear, Microsoft is no longer the bulldozing behemoth they once were. Not by a long shot.

–jeremy