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Newsweek: Microsoft's Six Fatal Errors

Jun 16, 2000, 05:28 (16 Talkback[s])
(Other stories by Jared Sandberg)

"Did the tactics that made Bill Gates the world's richest man provoke the threat of a breakup? The judge thought so. The road to a harsh verdict."

"It was a bleak winter day in early 1998, and Microsoft's lawyers had come from Redmond to appear before Judge Thomas Penfield Jackson in the other Washington. In a legal clash predating the landmark antitrust suit, Jackson had asked the company to remove its Web browser from Windows 95 on the grounds that forcing the browser on PC makers violated a prior pact with the Feds. Microsoft said a separation was technically impossible. But to comply with the judge's order, the company produced one browser-free version of Windows 95 so old that its shelf life was even shorter than Bill Gates's temper. Another browserless version was so broken its only feature was an error message. The judge was clearly angry that Microsoft insisted the only way to comply with his order was to ship defective products. It was a hardball maneuver that cost Bill Gates & Co. dearly."

"The judge's frustration had been mounting. Already in this early skirmish, Microsoft had submitted a legal brief questioning the technical know-how of Justice Department attorneys-and by extension the judge-who "have no vocation for software design." It also went over his head to the appeals court. Ultimately siding with Microsoft, the appellate judges overruled Jackson and told him the courts shouldn't be software designers. For Gates's empire, it was a short-lived victory. Looking back recently, one Microsoft insider said that first round clearly came at a high price: "We shouldn't have pissed off the judge."

"Last week Jackson ordered the biggest software redesign Microsoft has ever known, concluding that splitting the software giant into two independent companies was "imperative." ... If upheld, Jackson's order, aside from causing the biggest Windows crash in the company's 25-year history, would bring an end to a software empire that became the planet's most valuable company and an engine of the New Economy. Some-Microsofties among them-will blame the judge. Some will blame an overzealous government that has unsuccessfully tried to rein in Microsoft for more than a decade. A NEWSWEEK reconstruction of the key moments on the road to Microsoft's Judgment Day, however, suggests that the most likely culprit is the same defiant corporate culture that made Microsoft so successful in the first place. ... "Microsoft took a scorched-earth approach," says Howard University law-school professor Andrew Gavil, "and they got scorched."

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