March 24, 2002
From the desk of Jane Galt:Slow news morning, so I'm
Slow news morning, so I'm going to post something I've been meaning to do for a while: the answers, if anyone cares, to the emails that I got regarding my article on the Microsoft Anti-trust case. Of course, they tend to stress the same broad themes, so I'll just condense here, though you can see a good sample of criticisms, and applause, for the article here in the Salon letters section.
The amazing thing to me is how many people who emailed seemed to be trying to continue an argument with me that they'd started with someone else. The purpose of the article was not to argue that Microsoft played fair; it was to argue that the lawsuit Netscape is bringing is full of holes. But rather than responding to that, something I said touched off a hotbutton in their heads, and they commenced a familiar argument as if I were taking the other side.
You can too buy an Apple/Sun station for under $1000!
This has two answers. The first is that $1000 was essentially an arbitrary number: the point was that the cheapest PC's are about 25% cheaper than the cheapest Apple, more than 50% cheaper than the cheapest Sun. I could have said $900, and then you wouldn't have anything to email about.
The second answer is that I priced systems with the following criteria: CPU, printer, monitor, extended warranty (on the assumption that we are talking about the most computer illiterate consumers). The iMac comes in over $1000; the Sun comes in around $1600 (that $949 price didn't include a monitor). Yes, but. . . many of you argued that one or the other component was unecessary. Fine. Strip off everything and the Dell is $549, the Apple $799, the Sun $1200 (I refuse to concede that a monitor is optional).
Yes, but. . . there's actually more "value" in an Apple/Sun when you count software, performance, or whatever. That's a value judgement. Firewire maybe fantastic, but it's not something that everyone wants, as evidenced by the fact that not everyone has it. YOU may value your iMac at well over what it cost, but assuming that your hierarchy of values represents some absolute, objective standard is what made Communism such a rousing success. (Comrade Oblenko likes black pants better than brown -- therefore, we will only produce black pants and save many rubles on dye!)
Bundling Was Unfair Competition
The best argument I've heard on this score is that IE loads faster because it loads at startup; this makes Netscape compare unfairly.
Here's the thing, though -- I have a hard time believing that consumers make their software choices based on the extra 10 seconds they have to wait for Netscape to load.
If they do, however, then this is a genuine advantage of the browser to the conumer, one that Netscape couldn't replicate. Remember, the Appellate court ruled that the purpose of the Anti-trust legislation was to protect the consumer, not Netscape. You're going to protect the consumer by forcing them to give up a feature they like?
There is a compelling argument to be made about some of the API's, except that Netscape didn't make it. We can't try the case in the papers.
Microsoft designs its code so other programs run badly
Sigh. Also not in the complaint. Nonetheless:
Find me a Microsoft programmer who admits this, please -- and not one that your brother-in-law met at a party; one who's actually put it in writing. I've met several (current and former) who deny it adamantly, but then they would, wouldn't they? But short of a confession, or your looking at the Windows source code, you don't actually have any evidence that the reason that Microsoft programs run better is that Microsoft sabotages its competitors, rather than that the code is better. I'm not saying it doesn't happen. But you don't know and neither do I. And I know enough programmers to know that they'll blame anything when their code doesn't work, from sunspots to their officemate sending "evil thoughts" at them.
Users are lazy and stupid
That's a tech's perspective. I'm sure those dolts down in accounting feel the same way about what you do with your checkbook. The evidence just isn't there that they are imprisoned by whatever software is on the desktop; as I point out in the article, they proved perfectly capable of downloading Netscape when the dreadful I.E. 3.0 was on teh desktop. They stopped when it was no longer necessary to do so.
Internet Explorer isn't actually a "single platform"
It may well be that IE violates the "write once, run anywhere" ideal; I'm not a web developer. But the point I was trying to make is that if there are network effects in the browser market, they come from the web developers; the software isn't hard enough to use to create real switching costs, and of course users don't create files to share with other users, the source of the network effects for programs like Microsoft Office.
If the point is that network effects aren't as strong as were previously thought, I agree with you. So does Microsoft; that's why they compete like hell in every market they're in.
Unix is better
The argument that I was discussing was not about the Unix kernel, which is undoubtedly better (as many people pointed out) than Apple's old core; it was about Unix as implemented in Solaris, etc. Which is expensive and requires extensive training for users because it's harder to use. I frankly don't understand why people want to argue with me about this; it is empirically more expensive, and if you want empirical evidence of its ease of use, plop one computer illiterate user in front of a Unix box, the other in front of a Windows machine, and see which one's working faster. Linux is great -- and requires a lot of time to custom build a stable system, since the problems that were inherent in Windows are also inherent in Linux -- a whole lot of third party drivers that can interfere with eachother. That's why (I imagine) I know so many people who perfected their Linux system two years ago after much fiddling -- and haven't touched it since. Unix doesn't have to be all things to all people to be a great system; I don't understand why its fans can't accept that.
Netscape was free too
Check your facts. Netscape was free -- initially, while they built market share to that 70%+. At the point where Microsoft started to eat their market share, they were charging $40 a pop.
Microsoft's not Free -- You pay for it as part of your Windows license
So far, no one's been able to prove this. Arguments rely on one of two things:
1) It's not free for other platforms Check your facts. At least for Unix and Mac, it's free as far as I can tell. Go to Microsoft & download it if you don't believe me.
2) Pricing has changed Extremely hard to prove. Most proofs seem to relate to Microsoft's practice of raising the price of it's old operating systems to that of its newest release, which has more to do with other strategies than its browser prices. It's hard to generate a "true" price for Windows, because the makers of the other main competitive OS's either don't charge (Linux), or are integrated software/hardware makers, which changes the economics of their business.
In a larger sense this is true, of course; some of the profits from Windows go to pay for browser development -- but that doesn't mean that the company would necessarily charge less for WIndows; those profits might otherwise go into Bill Gates' pocket. Unless, of course, Netscape had succeeded in its strategy to seize the strategic monopoly position of Microsoft, in which case you'd be paying those profits to Netscape.
I'm an evil, pro-Microsoft shill
Did you read the article, or just the headline? Saying that Microsoft should win the lawsuit is not the same thing as saying that Microsoft is a good guy. I just don't think you should indict someone for something they didn't do, just because you can't make a case for something you know they did.
Best technology doesn't necessarily win in the marketplace
What's "best"? Every single person who made this argument achieved it -- if they offered examples at all, rather than just stating it, a priori, by leaving out attributes that they didn't care about, like price, or compatibility, or customer support, or something. Perhaps there are compelling examples, other than the widely debunked QWERTY or VHS ones, of a better technology losing, but I haven't seen it.
The Total Cost of Ownership of Unix is lower
As a consultant, I ran TCO's for Unix and Windows (and the person running the TCO for Unix was our Unix guru, not me). It isn't. Again, such comparisons are usually achieved by leaving out little things like training and availability of software. When it was lower, we used Unix.
Netscape server isn't as integrated with Netscape as IE is with Windows
That's true. That's because there's another viable product on the market. It's not seriously in question that Netscape initially planned to have a server platform that would work better than rival systems for the same reason Netscape advocates claim IE works better than Netscape. That's why investors were throwing so much money at them -- they thought the browser franchise would be a license to mint cash.
Microsoft's giving away its browser was predatory pricing
No argument here. Which I said in my article. Problem is, it's not in the complaint.
AOL isn't better
Than what? Than MSN it is. Consumers said so.
Personally, I wouldn't use AOL if they paid me. But a lot of people seem to disagree.
Microsoft themselves admitted Netscape is better
Not quite. What they said was that they didn't see how they could gain market share without leaning on their distribution network. That doesn't mean their product was necessarily worse (though that is indeed how Netscape cast it in their complaint); it could just as easily be taken to mean that Netscape's monopoly power was so locked in that the only way anyone could compete would be by leveraging the network. Which doesn't mean that the Microsoft executive was correct. Remember how many e-mails AOL had to sift through to get that one, out of context, quote.
The decision to use a browser is not the same as the decision to use a web browser
True, but hard to see how this is relevant. Emails on this topic seemed to point to the fact that browsers have lower switching costs (once you've got an email address, it's harder to switch to another service). However, this should have helped Netscape, not harmed them, if the desktop icon were truly decisive.
I don't understand how Microsoft tried to take over open standards to force people to their browser
Au contraire. But I didn't have time to elaborate on it; the article was long as it stood. And the core point is,
The fact that IE may have been better is not proof that it should have won
I'll quote directly from a Salon letter:
Even the "free browser" argument gets garbled in McArdle's presentation. The point is that Microsoft can afford to support a free product indefinitely, while a company like Netscape cannot. This is a brilliant bullying tactic on Microsoft's part, since a free product is a boon to the consumer, and their motives appear less predatory.Netscape isn't as good, but that's not the point of the antitrust suit. Netscape's 70 percent market dominance was not "monopolistic" as McArdle contends in her opening. Saying that IE is better, so nothing unseemly happened, is like saying that Nicole Kidman turns out to be a pretty good actress, so her marriage to Tom Cruise must have nothing to do with her success. Nepotism and Monopoly work the same way; they ensure success, even when the success is deserved. And that apparently is too subtle an idea for Ms. McArdle.
Predatory pricing -- don't need to go over it again.
70% market share is usually considered in the monopolistic range, at least when considering mergers and such.
The last is an interesting point, but the problem is that the writer has it backwards. Microsoft doesn't have prove it would have won the market share anyway; Netscape has to prove it wouldn't have. Which it can't.
Using IE as the help file made it more likely to win
Don't buy it. Browsers just aren't that hard to use, and the version used for the help file is stripped down and altered so that the relevant parts (the navigation buttons) are features of both Netscape and IE.
Microsoft didn't succeed just because its superior
I didn't say it did. I said it didn't succeed just because of its distribution practices, which is what Netscape is trying to argue.