The Register: MS pays up to settle on eve of Caldera antitrust trial

“Caldera and Microsoft announced a settlement of their antitrust
battle late yesterday. Caldera’s private action against Microsoft,
centred on DR-DOS, had been scheduled to go to trial on 1 February.
A minimalist and obscurantist masterpiece of a press release
released in Salt lake City, but carefully-crafted by the most
expensive PR organisation in the industry, said: “Microsoft Corp.
and Caldera Inc. today announced that the parties have reached a
mutually agreeable settlement of an antitrust lawsuit filed by
Caldera Inc. in July 1996….”

“The terms of the agreement are confidential. Microsoft will
record a one-time charge against earnings in the quarter ending
March 31, 2000, which will reduce earnings per share approximately
three cents.” [There then followed the customary paragraph puffs
for Caldera and Microsoft.] The purpose of the statement, which was
developed by Microsoft, was to suggest that the amount of the
settlement was small. Based on around 5.15 billion shares, the
suggestion that Microsoft wishes to plant is that the direct cost
of the settlement to Microsoft would be $155 million. This figure
must be treated with great caution, and there are several reasons
to believe that the true cost to Microsoft is considerably greater
than this, although Caldera is unable to confirm the probable true
figure because of the gagging order Microsoft always

“The statement leaves out key data about the settlement. It
would be foolish to assume that the cost of the settlement to
Microsoft is just the three cents a share, as Microsoft wishes
everyone to believe. Indeed, it’s worth considering what Microsoft
did not say – for example that the three cents was the total cost
of the action, or that a further charge would be taken, or that
legal costs were included, or that Microsoft would not be giving
Caldera some other benefit in kind. There may well be additional
undisclosed terms that will not immediately be known, or will be
buried by Microsoft’s bean counters when they massage the