Just Looking For The Vig

In the blizzard or Microsoft trial coverage, you may have overlooked the internal memo that suggested that the way Microsoft will make money on Windows 2000 and beyond is to charge a recurring fee for its use, rather than a one-time charge, as is now the case. Microsoft rushed to say that this was only one of many ideas thrown out, and that they had no present plans to rent their software to you.

My friends, where there is smoke, there is fire. This reminds me of the beginning of monthly charges for credit cards. I was there. I know the precise meaning of "no present plans." Digress Here.

First, Nathan Myhrvold, Microsoft's Chief Technology Officer, floated a very similar idea in a New Yorker interview, in which he used the word "vigorish" or "vig." I believe the term is used by loan sharks to describe their interest, and perhaps by bookies to describe the "piece off the top" they take for their services. Myhrvold claimed he was quoted out of context. And now this memo turns up in the antitrust trial.

Microsoft is going to do it. Mark my words. The minute they feel the coast is clear, you'll be paying a monthly fee for Windows. It will start small. It will be disguised as a "premium upgrade service." But it will be the start of paying Bill Gates, probably on a per-transaction basis, for everything you do on your computer. Because he doesn't think it is yours, he thinks it is his.

By the way, Microsoft's defenders are saying that it was all talk, that Microsoft never acted on any of its plans to destroy its competitors. Being a bully doesn't make you a law-breaking monopolist, they suggest.

This isn't about talk. It's about actions. It's about contracts, and threats that caused other companies to act in Microsoft's interest and not their own. Don't let the smoke and mirrors dazzle you. Microsoft is on trial for abusing is power as a monopolist.

What about the Netscape/AOL merger you say? I'm glad you asked. Just because one defeated Microsoft competitor is staggering into the arms of another firm whose business is still under threat from the Redmond bully does not retroactively mitigate Microsoft's illegal actions of the past.

I have heard William Neukom, Microsoft's chief legal counsel, make his argument on the courthouse steps that the Netscape/AOL merger means the government should drop its antitrust case. "This proves the market is vibrant and competitive," he says. "No thanks to Microsoft," say I. His arguments give new meaning to the words disingenuous, hypocritical and misleading.

Microsoft is, of course, entitled to vigorous advocacy under our legal system. But when a prominent well-educated attorney takes advantage of public ignorance of antitrust law to deliberately mislead people about what's at stake, I think that borders on unethical behavior.

Shame on you Mr. Neukom. You know better. The government doesn't have to prove that you crushed your competition (to use a favorite Microsoft term); they just have to prove that you tried to crush them, and that you used your monopoly power to do so.