REDMOND, Washington, April 25, 2001 -- Microsoft has announced that its newest version of Windows Media Player, version 8.0, will only be available with the Windows XP operating system; it won't be available separately, as in the past.
If you're a regular reader of this space, you know that I don't care much for multimedia, streaming-this and live-that; on a 150MHz Pentium PC with a 33.6Kbps dialup modem, moving pictures and live audio are an exercise in frustration. I don't have the current version of Windows Media Player, so the fact that version 8.0 will be bundled with Windows XP won't exactly throw me into a fit of depression. But the "Media Player with Windows XP" package sounds suspiciously like "Internet Explorer with Windows."
Once Microsoft has established itself as the dominant e-commerce software provider, it'll start charging retailers a portion of every transaction made using the software.
Meanwhile, the company's HailStorm scheme -- part of its .Net software-as-service strategy -- aspires to gather your personal and credit data, along with that of everyone else on the Net, with the eventual goal of becoming the tollbooth through which all e-commerce traffic must pass.
The Media Player bundling and HailStorm announcements make one thing perfectly clear: last year's antitrust trial was a mere speed bump, for Bill Gates & co. With the election of George W. Bush, with his hands-off policy, Microsoft once again has the green light to pursue its goal of complete and total world domination. (Well, maybe not world domination, but 800-pound-gorilla-dom, at least.)
[Addendum, September 9th -- Sure enough, the Justice Department has dropped its demand that Microsoft be broken up, and, for all practical purposes, has dropped the antitrust claim altogether. I claim no brilliant predictive insights here -- the action was essentially a foregone conclusion when President Bush took office -- but all the same, it's nice to be right once in awhile... ed.]
Since the dawn of e-commerce, Bill Gates has had a dream: that one day, every time anyone bought anything from an electronic store, he'd get a piece of the action. It wasn't enough that his company had a stranglehold on the desktop software market -- going so far as to force PC manufacturers to pay OS software licensing fees even on PCs that didn't have Microsoft OSes (if they also wanted to sell Microsoft products). It wasn't enough that they squeezed business application vendors out of existence, by bundling everything into MS Office. It wasn't even enough that Gates was the richest man in the world. Nope -- there were other worlds to conquer. In particular, the biggest world of all: e-commerce.
When Microsoft started giving Internet Explorer away, instead of charging a license fee, as Netscape did (I happen to be the proud owner of a copy of Netscape 4.02, for which I paid something like $58.00, back in 1996 or so), its goal was to become the only -- or at least the dominant -- browser vendor.
Why do that, one might reasonably ask. Who cares if you've got the only browser, if you have to give it away free?
Because if you've got the only browser, you can stipulate that if people want to use it to buy and sell stuff, they have to pay you a percentage of the take. Gates & co. wanted to create the proverbial money machine, so they'd be able to sit around all day, doing nothing but watch the dollars come rolling in. If other browsers had ceased to exist, you'd have seen new IE "features" appear, that would have funnelled all e-commerce transactions through Redmond, where a "tax" would have been levied on each purchase. Nice work if you can get it.
That strategy failed, because Microsoft wasn't able to force the competition completely out of the browser business. Although they succeeded in forcing Netscape out of business as an independent company, the latter was saved by an AOL buyout. Meanwhile, there are other browsers like Opera (which I use most of the time), which, although not significant in terms of market share, at least give the browsing/buying public an alternative, should IE dominance become too oppressive.
Having failed to take over the e-commerce world via IE, Microsoft had to come up with a better money-machine idea. However, the Department of Justice's antitrust trial distracted the company for a year or so. Among other things, the DOJ argued that bundling IE with Windows constituted an illegal anticompetitive practice.
When Judge Thomas Penfield Jackson issued his order that the company be broken up into two pieces last year, naïve observers might have expected Microsoft to cave in, split up, and get on with its life (or lives). But Gates wasn't about to be cowed by a judge, jury, or would-be executioner -- and he knew that if he could delay the remedy long enough, he might well be dealing with a much friendlier Republican administration in Washington.
Bill Gates may envision a thousand-year empire under the control of him and his heirs, but the Internet, like our economy as a whole, has a way of surprising people who think they can take it over.
Which, of course, is exactly what happened. It's abundantly clear that George W. Bush has no interest in breaking up Microsoft. So Big Brother Bill can proceed with the two prongs of his grand scheme: to dominate the desktop (by bundling) and -- the big one -- to take over e-commerce (with HailStorm and .Net).
The bundling angle is that by including Windows Media Player with future versions of Windows (starting with XP), Microsoft will be able to do the same thing to RealNetworks' RealPlayer and other video players that they did to Netscape -- marginalize them by packing every PC with a decent competing product. Who's going to download RealPlayer when they've already got Windows Media Player on their PC?
So far, Microsoft has been deliberately vague on exactly what HailStorm and .Net are supposed to do. But my guess is that they're the next incarnation of what Microsoft wanted to do with Internet Explorer: become a troll that would pop up, demanding money, every time someone wanted to buy something on the Net.
In Bill's dream, every e-commerce vendor will be using a .Net "platform" supplied by Microsoft. The vendor will (obviously) pay a licensing fee for the privilege, as they do when they buy any software license.
But it gets better: Once MS has established itself as the dominant e-commerce software provider, it'll start charging retailers a portion of every transaction made using the software. Don't laugh -- this is exactly what has happened in the ticket-broker business, with Ticketmaster extracting a couple of bucks every time you buy a ticket to see a concert or a play. They've got a stranglehold on the industry, and they're not letting go. Nothing would make Bill Gates happier than to do the same thing, except on a much larger scale.
Meanwhile, HailStorm is the other piece of the puzzle. The plan is to gather a bunch of the personal information privacy advocates hold near and dear -- name, address, credit card number, purchasing history, stuff like that -- for millions (or, ideally, billions) of people, and house it all in one place, with Bill Gates holding the key. I leave the data-mining, marketing, and personal privacy nightmares as an exercise for the reader -- besides, they've been discussed at length by any number of columnists in recent weeks and months.
Will the dream become reality? My guess is, probably not. Bill Gates may envision a thousand-year empire under the control of him and his heirs -- but the Internet, like our economy as a whole, has a way of surprising people who think they can take it over. Still, it's important to understand what's going on here.
It's one thing to become the market leader by producing better products than anyone else, putting them up for sale, and waiting for people to buy them. That's fine. But it's not fine when a company becomes a leader by strangling competitors -- or "cutting off their air supply," as an infamous Gates e-mail once put it. You're supposed to win by being better than the other guys -- not just by being bigger.
Copyright © 2001 John J. Kafalas
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