Microsoft Delays Debut of New Internet Strategy
Microsoft Corp., girding for a federal judge’s likely punishment next week, is delaying for three weeks the debut of a new Internet strategy that promises to marry its Windows products to the online medium.
The software giant had planned to introduce the so-called Next Generation Windows Services, a strategy to develop software for devices other than PCs, to reporters and analysts at a daylong conference Thursday at its Redmond, Wash., headquarters.
The delay came as government lawyers on Friday submitted a final version of their breakup proposal.
The new government plan reasserts a call by the Justice Department, 17 states and the District of Columbia to break Microsoft into two separate companies. One would sell the flagship Windows operating system, and the other would market all other products, including Microsoft Office, WebTV and Microsoft Network.
Presiding U.S. District Judge Thomas Penfield Jackson signaled at a standing-room-only court hearing Wednesday that he was prepared to move quickly to wrap up the landmark antitrust case against Microsoft. He gave the company 48 hours after the government filed its final plan to put forth any objections, and rejected Microsoft’s request to hold more extensive proceedings on remedies.
“There are strong indications that the U.S. District Court in Washington, D.C., may enter its final decree next week in our continuing antitrust matter, an event we feel would distract attention and focus from our event,” Microsoft said in an e-mail to reporters.
Analysts generally praised Microsoft’s move to postpone its conference and said the delay does not mean that the company is backing down in its antitrust fight against the government.
“The whole NGWS thing has been played up so heavily by Microsoft that I think they simply did not want to be overshadowed by the stuff going on with their legal case,” said Steve Kleynhans, vice president with META Group, a Stamford, Conn.-based technology consulting firm. “I don’t think Microsoft is concerned about facing the music. . . . I think the company is just continuing to operate in the way that it knows how to operate.”
Next Generation Windows Services aims to more deeply connect Microsoft’s Windows software to the Internet. Although details of the strategy are murky, the Microsoft initiative is believed to be targeted at developing ways to offer software and services, on a subscription basis, to computer users and users of new wireless devices.
Although Microsoft has argued that NGWS and greater product integration is needed to respond to expected shifts in new computing technology, experts have said the NGWS initiative could put Microsoft even more at odds with the government and Jackson.
The government made reference to the potential rift in court papers filed earlier this month.
“Microsoft argues more specifically that it needs to be an integrated company in order to respond to ‘the latest paradigm shift in the computer industry,’ ” the government wrote in its May 17 filing.
In developing NGWS, the government added, “Microsoft is seeking to provide a range of new system services to software developers . . . that will enable them to develop Web-based applications that are accessible from a wide range of devices. But there is no basis to think that only an operating system monopoly (such as Microsoft) can develop Web-based services” or that Microsoft cannot, therefore, be broken up into separate companies.
Microsoft shares fell 6 cents to close at $61.44 on Nasdaq.
