Gates close-mouthed on Microsoft judgment

Microsoft Corp. chieftain Bill Gates isn’t talking — yet — but industry reaction is making it clear that a federal judge’s decision Thursday ordering the software giant to cease forcing PC makers to bundle its Internet browser with its operating software could cause Microsoft’s near-term plans a world of hurt.

U.S. District Court Judge Thomas Penfield Jackson didn’t buy the Dept. of Justice’s entire presentation, however: He refused to fine Microsoft for anti-competitive behavior or find it in contempt of his 1995 court order decreeing that the company cease leveraging its market position as a major provider of operating systems to sell its other products.

But his order that Microsoft in effect decouple its Internet Explorer Web browser from its Windows operating systems could cause massive problems with the next two major launches the company is readying: its Windows 98 and Windows NT 5.0 operating systems. In these, the browser is so tightly bound up with the operating software that they are, in every real sense, indivisible.

Microsoft spokespersons were quick to point out that the judge’s ruling is not the final word on this matter. “The first thing to remember is that this is a preliminary ruling,” spokesman Adam Sohn said. “This is not the end of the case.”

Instead of making final judgment, Jackson appointed a “special master,” an expert in the particular matter before the court. Chosen was Harvard U. professor Lawrence Lessig, a specialist in software licensing issues, who will consult with the court through May 1998, when a final judgment will be handed down.

In any case, much of the power of the decision Jackson did make is moot so far as many computer-builders are concerned. Although Compaq Computer and Gateway 2000 supplied some of the information that resulted in Jackson’s decision, sources there said both makers would continue to ship Internet Explorer with Windows-based computers, primarily because their customers say they prefer it that way.

“We’re not going to do what our customers don’t want us to, not unless we’re forced to,” said one Compaq sales exec, who added that customers who specifically ask for Netscape Communications Corp.’s rival Navigator browser will of course receive that instead.

And Gates’ reaction to all this? Silence, for now. The world’s richest man is currently touring China and spreading the Microsoft gospel, and persistently ducked questions from the accompanying press concerning the judgment. But he did vow to continue to compete with Netscape, right to the very end.

Wall Street is clearly still behind Chairman Bill as well. Microsoft shares dropped by only a bit more than two points in trading on the Nasdaq exchange Friday, though the stock was in play virtually the entire session.

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