Microsoft ’97 Is Just Another Standard Oil ’07

I thought I could hear my roommate’s heart break when I read that Microsoft would be investing in Apple Computer. But at least he saw it on his Netscape browser.

A Macintosh loyalist in spirit who has a substantial investment not only in the machinery of the system but also in applications, his computing experience for nearly a decade has been on Apple platforms. But he and the 7% non-Microsoft remnant he represents don’t matter much anymore on the operating system front. The long war between the operating systems is over.

The Apple-Microsoft alliance announced Wednesday is the equivalent of the Romans subduing the Greeks--and the Vandals. For the true loser in the deal is the company that offered a substantial challenge in personal and corporate computing to Microsoft in the last two years, Netscape Communications. As part of Microsoft’s $150-million investment in Apple, future Apple operating systems will have Internet Explorer bundled with them--just as future versions of Windows will. Game, set and match.

Founded in 1994, Netscape was the maker of the leading World Wide Web browser and ancillary products to support networked computers. It was a start-up firm that saw a chink in Microsoft’s armor and ran at it. Microsoft was uncharacteristically slow in response.

By rough estimates, Netscape at the time had a 90% market share of browsers. Its product was the best. Microsoft was so far behind in this crucial aspect of computing that it essentially had to buy a browser from another start-up, Spyglass, just to get in the game.

When Microsoft plays, it plays to win, as it did several years ago in the word processing and spreadsheet markets. Its competitors then, such as WordPerfect, were relegated to peripheral status. Microsoft, winning through incremental victories, was so flush with success that it didn’t care about the Net.

But now the Redmond, Wash., behemoth is moving with a mighty force. The Apple deal is only the latest example of Microsoft’s dominating tactics. It tumbled Netscape’s market share by giving away its World Wide Web browser, where Netscape charges noneducational users $59. A company like Microsoft, with $9 billion in cash on hand, can afford to take the long-term view against a competitor that had revenues of only several hundred million.

Through a variety of machinations, Microsoft did the same with “server” software, used to manage networks. Because Microsoft’s Internet Explorer software is free, each of the top five Internet service providers (including America Online and CompuServe) and most regional telephone companies use Explorer.

My company computer uses Microsoft Word for Windows 95. I don’t care for it, but I know that the firm got a good deal on it. I have other complaints about Microsoft’s wares, but soon I won’t have a choice. Neither will my roommate. And even if it’s free, I know that down the road there will be new things we’ll have to buy. It’s no wonder, as someone has observed, that only the computing industry and drug dealers call their customers “users.”

No matter how many times Bill Gates plays golf with President Clinton, it’s time for the government to act. If the Federal Trade Commission and the Justice Department can’t make Microsoft live up to a 1995 consent decree regarding anti-competitive behavior, then Congress should get involved.

As an Apple bumper sticker put it, “Windows 95 is Macintosh 89.” In its efforts to dominate the Internet, Microsoft ’97 is Standard Oil ’07. The digerati are familiar with Microsoft’s behavior: Earlier this week, augmenting its equity investment in Progressive Networks Inc., the leading maker of “streaming” technology--a way to send audio and video over the Internet--Microsoft bought outright Progressive’s chief competitor, VXtreme Inc. No one cried wolf.

For good reason, Microsoft internally calls its competitors--Netscape, Oracle, Sun and everyone elseP”noise.” But the competitors rarely make any. It’s time that someone should.