Antitrust ruling doesn't faze Microsoft

Antitrust ruling doesn't faze Microsoft

Summary: Company launches 'aggressive' MSN marketing campaign, as well as another beta of Internet Explorer, the day after it is ruled a monopolist

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TOPICS: Networking
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So much for a dampening effect.

While Microsoft's stock price may have taken a beating as a result of the harsh antitrust ruling levied by Judge Thomas Penfield Jackson against the company, Microsoft Corp. didn't let the decision cause any hesitation in its marketing efforts.

On Tuesday, the day after Jackson made his ruling public, Microsoft announced a self-described "aggressive" effort to increase its MSN Internet service penetration. It also took the wraps off the latest beta of its next version of Internet Explorer, IE 5.5.

IE 5.5 is due to ship as part of Windows Millennium Edition, or WindowsMe, due out later this year. (The third and final beta of WindowsMe could be available as soon as this weekend.)

The new browser also is likely to be available for download from Microsoft's Web site as a separate product some time in the third or fourth calendar quarter.

Microsoft announced the third beta of IE 5.5 on Tuesday, the same day it also announced the third beta of the Internet Explorer Administration Kit, a tool for customizing and deploying IE. With the latest IEAK beta, users now can customize MSN Messenger, Microsoft's rival to America Online's Instant Messenger.

At the same time, Microsoft touted a new "aggressive" MSN promotion, available through June 30, as a way to build its subscriber base. To do so, Microsoft is now offering the first six months of MSN for free to customers who sign up for a year of service.

Microsoft's move to highlight MSN as a 'free' service comes just a day after Judge Jackson took the company to task for making Internet Explorer available for free. "MSN experienced 500,000 net new additions in the last four months and a 12 percent growth in reach in just over six months, compared to AOL's 3 percent decline in reach and Yahoo!'s 4 percent growth in reach during the same time period (according to Media Metrix)," crowed Microsoft in its press release.

"MSN is aggressively stepping up its advertising and marketing efforts to further propel its recent growth," Microsoft also noted in the release.

Microsoft's move to highlight MSN as a "free" service comes just a day after Judge Jackson took the company to task for making Internet Explorer available for free.

The judge claimed Microsoft's IE strategy -- to make the technology available for free with no expectations of generating revenues from it for years, if ever -- worked as an illegal barrier to entry, causing harm to Netscape and its rival Navigator product.

MS 'renounced many millions'

"Viewing Microsoft's conduct as a whole also reinforces the conviction that it was predacious," claimed Jackson in his conclusions of law.

"Microsoft paid vast sums of money, and renounced many millions more in lost revenue every year, in order to induce firms to take actions that would help enhance Internet Explorer's share of browser usage at Navigator's expense. ... In fact, Microsoft has expended wealth and foresworn opportunities to realise more in a manner and to an extent that can only represent a rational investment if its purpose was to perpetuate the applications barrier to entry."

The judge ruled, among other things, that Microsoft acted illegally by tying together Windows and Internet Explorer in violation of the Sherman Antitrust Act.

Microsoft has said it will seek expedited appeal through the US Court of Appeals once the judge issues his final order, complete with recommended remedies.

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Topic: Networking

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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