ONE OF THE THINGS Seattle likes about Bill Gates (and that includes the folks who don't like anything about Bill Gates) is that he's still something of a regular guy—goes to movies, eats fast food, and generally refrains from being Howard Hughes, the billionaire who let it get to him. Gates may have an unimaginable amount of money, but even though he doesn't exactly live like the rest of us, he still hasn't let it screw with his mind.
He should have. Gates may well have spent the weekend wondering how he ended up starring in the third act of Citizen Kane without ever apparently feeling a sense of satisfaction with Acts I and II. If he didn't like the way he came off in this spring's Pirates of Silicon Valley, god knows what he'd make of the movie that ought to be made out of this.
The voluminous Findings of Fact issued last Friday by federal judge Thomas Penfield Jackson is no ordinary legal document. It has a plot. It has conflict. And what characters! Victims, villains, opportunists, and a company whose leader wished for something and got it, and learned too late that well-known adage about being careful what you wish for.
At first glance the story's main victim—and a Little Nell-ish figure it is—is Netscape, late of Silicon Valley and last seen pulled apart like a wishbone by America Online and Sun Microsystems. Once upon a time Netscape was nearly synonymous with the Net's bright promise. Born online! Built online! Best and brightest! Too cool for Microsoft and AOL and all those old-school companies!
Most of the FoF concerns Microsoft's determined and multifaceted attempts to lay waste to Netscape. Microsoft attempted to bring Netscape into the fold; when that failed, it attempted to stymie Netscape's progress. Microsoft undercut Netscape's partnerships. It used its own partnerships to beat Netscape over the head. It did, in short, the kinds of things that big established companies have the power to do to little upstart companies. Microsoft has the power, certainly; whether or not it has the right, and whether or not it harmed consumers in the process of rightly or wrongly exercising such power, is the crux of the matter.
Some of the most fascinating material in the FoF concerns how Microsoft used its long-standing partnership with computer vendors such as Compaq and Hewlett-Packard (not to mention chip giant Intel) to ensure that Microsoft was the face that the legions of Net-curious new computer buyers would see when they switched on the computer. Microsoft forbade companies not only from putting Netscape and other icons on the desktop, but even from altering their own computer's startup routine to present the user with anything less cryptic than the familiar start-button interface. In several cases, Microsoft even demanded that computer manufacturers use only the Internet Explorer browser on their own in-house computers. (They didn't force consumers to do that—can you imagine Bill G. calling your house to tell you to get rid of Netscape?—and that "forbearance" formed part of Microsoft's claim that it had, in fact, benefited the consumer in the main.)
If Microsoft did unto its OEM partners as the FoF claims—and remember, those companies still have to work with Microsoft; there's no joy or pleasure in this testimony for the likes of Intel's or Compaq's executives—then they, not Netscape, are the true victims here. Just because they were the weapon rather than the target doesn't mean that they didn't suffer more. For instance, we're told in the FoF that it takes just three tech support calls from a baffled customer to eat up a computer vendor's entire profit margin. And new users call the hardware guys first, not the operating systems team. If Microsoft prevented Compaq and others from making the user experience easier, thus causing more tech support calls and less profit (both in tech support costs and subsequent lost sales), then Microsoft done them wrong indeed. And it deserves to be punished.
WHY DID MICROSOFT go so far to slaughter Netscape and capture the Net—moving from hard-but-fair competition (according to the government's previous rulings) into tyranny—when just a couple of years before, the company found communications such a yawn that it couldn't be bothered to implement decent modem support in Windows 3.1? The answer seems obvious now, when you can't swing a cat without hitting something with a URL on it. You might even think that Microsoft must have gazed upon the Net and seen a wholly new terrain for making history—a brave new world where from the ground up a smart, hard-driving company could shape the future of commerce, of entertainment, and of the one-to-one consumer experience.
And you would be wrong. To misquote Puff Daddy (or Weird Al, if you'd rather), it's all about the middleware, baby.
Middleware, as conceived and almost executed by not only Netscape but Java, promised to free the world's software developers from the tyranny of operating systems. Good middleware would make it possible to "write once, port anywhere"—write a program on, say, a Mac, and rest assured that it would work on a PC operating system (i.e., Windows). Small programs written in Java that can do that exist now, but nothing big that might threaten Microsoft's 90 percent share of the PC operating system market. To protect its market dominance, Microsoft had to make damn sure that such big apps never came to be.
And so it did.
Netscape didn't deserve to die for innovating, but it only looks like a sacrificial lamb if you know nothing of the industry over the past five years or so. Yes, Netscape did a brilliant browser; yes, it promised great things; yes, it had nothing like the war chest and reach that Microsoft used so evilly. But history teaches us—hell, even the FoF teaches us—that smart competitors can and do survive Microsoft's onslaught. Intuit survived. RealNetworks survived, and even bested Microsoft with a savvy "misunderstanding" of their joint contract. And AOL—one of the companies that has consistently screamed loudest where Microsoft's depredations are concerned—not only survived but handed Microsoft its ass in the online services competition.
The endgame between Microsoft (and MSN) and AOL (and Netscape), covered late in the FoF, is fascinating stuff. AOL purchased Netscape a year ago and concluded rapidly that the only item of interest was the traffic garnered by Netscape's front page (which that unfortunate company had, just like Microsoft, refused to allow its partners to circumvent or alter).
Microsoft was clearly ready to sacrifice MSN to kill Netscape, but AOL was happy to sacrifice Netscape as well as its own subsidiary GNN service to get Netscape's page views, staying in bed with Microsoft all the while. Ask yourself: If Netscape was so vital, so promising, so viable, how is it that it had in the end no friends at all beyond the Linux crowd?
And there are dark underground streams feeding this strange fruit. A careful read of the FoF makes one suspect other factors in the findings—even though Microsoft clearly is a monopoly, and even though substantial changes clearly need to be made not only in the way the company does business but in the structure of the business itself. If you lay out Microsoft's actions, it's clear that the company was taking certain kinds of power away from computer vendors. It was, however, giving analogous powers to Internet service providers. For instance, Microsoft prohibited computer vendors from changing the way Windows looked at first startup or which icons it displayed; however, it encouraged Net providers to build customized versions of Internet Explorer, providing a DIY kit free. (Netscape provided a similar kit after nine months, but charged $1,995 for it.)
Now what? Whatever Microsoft was thinking on Friday, the appellate court isn't going to pull its floppies out of the fire this time. This time, this winter even, a hard rain's a-gonna fall. The main worry here—and this is true whether you're pro- or anti-Microsoft—is how it's going to go down and whether the cure might be worse than the disease. The thing that many forget in these days of "more efficient government" is that government is not designed to be efficient; it's designed to be just, and even (sometimes) fair. Not only might any legal remedies be messy and insensitive to how the industry works, it might take forever—drawing out this mess far longer than anyone wants it to go. If Microsoft genuinely wants the best for the industry, it'll sit down and start talking settlement.
At the close of the gripping Tale of the FoF, you've got to wonder: Does Bill—and to the eyes of narrator/judge Thomas Penfield Jackson, Bill clearly is Microsoft; his bad decisions consistently outweighed his subordinates' good ones—see himself as a victim? A stalking horse? John Wayne? Shane? Just another kid on the playground? Therein lies the tale: Bill thought of himself as just another smart, tough kid on the playground. But he wasn't. The government erred in 1995 (and before, and after) by not telling him that he had, in fact, outgrown that playground—before he hurt someone, not least himself.
More coverage of the antitrust case:
Online Exclusive: Seattle Weekly's handy guide to the Findings of Fact.
Editorial note by Skip Berger
Being smartest only gets you so far, Microsoft.