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Comdex coverage by CNN and

Comdex a safe haven for Gates as trial drags on

November 19, 1998
Web posted at: 7:03 PM ET

by Industry Standard staff

(IDG) -- Sun might have won a key court victory against Microsoft, but the sun's far from setting on the Microsoft empire. In fact, the forces of Redmond quickly made lemonade from the lemon, attacking IBM at the antitrust trial for colluding with MS rivals in a Java plot. Plus, the bad courtroom press was soon reversed by the adulation of Comdex, filled seemingly with 200,000-plus Friends of Bill. Gates himself even gave a phone interview to AP defending his tepid deposition, while Microsoft announced it was selling off its stake in pesky RealNetworks. All in a day's work of image reparation and inevitable separation.

First, no surprise that Real and Microsoft are going their separate ways, especially after Real CEO Rob Glaser's anti-Microsoft congressional testimony, although Greg Maffei, Microsoft's chief financial officer, told The Wall Street Journal that his company's first proposal to sell the shares came in June, a month before Glaser's now famous testimony. Still, when the move became concrete yesterday, RealNetworks' investors weren't happy. According to The Journal the company's stock fell 14 percent to $36.75 in after-hours trading.

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Despite the decline, Microsoft stands to make out well in its sale, since it bought in at $8.99 a share just prior to Real's IPO. MS will look for a buyer for the 3.3 million shares it purchased for $30 million. OK, so Microsoft wins, Real stands pat, but ZDNet's Mary Jo Foley opines that in the long run the split may hurt consumers the most. That's because developers are increasingly caught in a standards war, dealing constantly with the question of whether to code their audio and video for RealPlayer or Microsoft's Windows Player.

At Comdex, The New York Times' John Markoff gave the confab view, saying Gates had his best supporters in Vegas, just as "Nixon found support among construction workers during the Vietnam War." Markoff did a man-on-the-convention-floor routine, finding plenty of MS lovers (and a few detractors), and cited poll numbers showing the public still strongly supports Redmond vs. the DoJ, 44 percent to 28 percent. Symantec's Gordon Eubanks said Gates is a victim of a trend in American culture of attacking those who are too successful.

The San Jose Mercury News' Chris Nolan also found some hardcore Gateheads waiting in line for his keynote and, later, judging his speech performance, just as Deadheads would rate Jerry Garcia after a show. Nolan seconded Markoff on Microsoft's home-turf advantage: "For five days every fall, Gates rules this Disneyland for heterosexual men Booze! Babes! Gambling! Golf! as an estimated 200,000 people gather for drinking, dancing uh, make that wriggling around to loud music and congratulating themselves for being smarter than everyone else."

Meanwhile, many outlets followed up on the Java ruling, finding that 'surprise!' Microsoft won't abandon Java but said it might not upgrade to Sun's new version. Analysts told the Merc's Miguel Helft that it would be tough for MS not to move ahead, and would either "play or not play" in the Java business. A Microsoft counsel told The Times' Steve Lohr that MS faced restrictions but "still has the right to create its own version of Java." Lohr also broached the possibility that Microsoft would reverse-engineer Java (just as it did with BASIC) to avoid licensing it altogether.'s Stephen Shankland filed a follow-up from the ranks of those who make Java tick the vast army of developers out there and he found a mixed reaction to the ruling. While one programmer called the decision great, saying, "If it starts to splinter and fracture, it goes to hell," others were more cynical. One decried the need to rewrite some of the code already aimed at Windows, and another said his shop wrote Windows code period and could care less about the "pure Java" camp. But a piece by Andy Patrizio in TechWeb found nearly unanimous favorable reax to the Java decision, with a different set of developers saying they hope Microsoft turns its might toward the "write once, run anywhere" creed.

Back at the antitrust trial, the war of words continued, with an apt Wired News headline: "Are Too! Are Not!" The Washington Post and New York Times both played up the new charge from Microsoft that IBM colluded with Netscape, Sun and others with their own Java version, using the old "they did it, too" defense. The DoJ objected to the line of questioning (sustained), and said IBM and others didn't have a monopoly, so aren't bound by the same rules.

The Merc's David Wilson and The Wall Street Journal's tag team focused on the testimony submitted by economist Frederick Warren-Boulton, who contends Microsoft meets four conditions showing it has a monopoly in operating systems. The Reagan-era trustbuster concludes: "If Microsoft is permitted to crush the incipient threat to its PC operating system monopoly that independent browsers and cross-platform technology have posed, the adverse consequences for competition and innovation are likely to be substantial."

The Journal stressed Warren-Boulton's contention that consumers will wind up paying more in the long run if Microsoft's Windows monopoly goes unchecked, although we would have liked to see The Journal give a bit of analysis of the price consumers pay for new PCs, which has continued to fall relative to computing power during the Windows era. Meanwhile Microsoft slapped at Warren-Boulton, saying he was an "ivory tower" consultant who didn't understand the software biz. In other words: He hasn't been to a lavish party at the Bellagio Hotel in Vegas lately.

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