Why Netscape is different from Microsoft
Netscape, by its own estimates, has 85 percent of the browser market, which they acquired in part by giving away their software. Is there any irony in the fact that they're accusing Microsoft of anticompetitive practices?
No, I don't think so. Bill Gates has been quoted as saying that he wakes up in the middle of the night worried about his browser share. Is Bill Gates really concerned about a particular application that sells for $50? No. His concern is that the browser represents a partial substitute for the Windows operating system. If people write applications for the browser and begin to use it as a substitute for Windows, all of the sudden Bill Gates's revenue stream drops precipitously. Microsoft is sitting on top of one of the world's greatest monopolies of all time, and they're going to do damn near anything they can to keep the forces of technology and the normal forces of the free market from eroding that monopoly. That includes intentionally crippling their own technology; squeezing OEMs not to carry competitors' products; paying middlemen like the Wall Street Journal to disadvantage users of Netscape; and bundling, tying, and leveraging. It's the fundamental Microsoft monopoly in operating systems that Netscape challenges, and that's what really keeps Bill Gates up at night.
Microsoft would argue the definition of an operating system isn't static. It seems this thing that we run applications on is evolving to maybe be a browser in a year. Is there anything inherently wrong with Microsoft saying another function of the operating system is Web serving or browsing?
How far would you like to carry this? Can they say that a function of the operating system is relational database software? Can they say it's word processing? That's been their position all along, and they've put out of business one market after another. You've talked about how much competition there is on the Internet. How much competition is there for productivity applications? Do we have competition for word processing anymore? No. Microsoft engaged in this illegal behavior and ran the competitors out of the market.
Marc Andreessen says Netscape doesn't create proprietary extensions to HTML or other aspects of their browser; they innovate. But there are those people who accuse Netscape of doing the same thing that you accuse Microsoft of doing, such as, for example, withholding source code for Java scripts and plug-ins.
The argument that you've raised is one that Microsoft has raised, but generally speaking in the software industry, it really doesn't carry much weight. Netscape, for example, runs on 16 platforms; Microsoft runs on Microsoft. That's Microsoft's view of the world; that will always be their view of the world.
AT&T, because it was a monopoly, was able to create a very compatible, interoperable infrastructure. Hasn't Microsoft succeeded in doing the same thing with the desktop operating system?
Certainly, to some extent. The question is whether the efficiencies that they've achieved are worth the competitive damage that they've inflicted on society. Couldn't we achieve the same degree of innovation if we required Microsoft to publish its APIs on a timely basis? There's no reason why a dozen companies couldn't make a product that would seamlessly integrate with the operating system, and I think consumers would benefit enormously if that were the case.
Doesn't the failure of the Microsoft Network in the face of the Internet show that even Microsoft is subject to the whims of the market?
It's true that the technologies move rapidly, but should we therefore permit someone to monopolize the basic technology on the theory that perhaps over time their position might naturally be eroded? I mean, after all, the dinosaurs died in 300 or 400 million years. IBM had a monopoly for, what, 25 years? When there's a monopoly, people suffer. Consumers don't get the benefit of the best products. I don't think that it would be fair for us to think that we should just wait and let the free market take care of this problem when it would take a long time to do it.
So in your view, where do we draw the line?
If Microsoft wants to make better Web servers or better browsers, do it on a fair-and-square basis, and people buy it, so be it. But if they make better products because people in their operating system group give secret information to the people in their browser group and they get a head start, or secret information to the people in their Web server group and they get a head start, that's not fair. That's not the American way, and that's not what's best for the consumer.
As Microsoft expands in this media realm, do you see other new opportunities for yourself?
I think that there is a real issue here about whether a company that has a monopoly in something so fundamental as desktop operating systems should be expanding into the media in this way. I think that that's going to be debated very hard over the next year.
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