Gates: MS has no monopoly

Microsoft Corp. Chairman Bill Gates insisted his company does not have a monopoly in the desktop computer market, even when pressed by Senate Judiciary Committee members about its market share, which exceeds 90 percent.

Gates said Microsoft (MSFT) faces constant competition from companies looking to topple its dominant position, and it must constantly innovate to stay ahead of the game.

'If your question is, can any Microsoft product endure the competition, the answer is no.' - Bill Gates

"In the span of the term of a senator, we create product, it becomes popular product, then it has no demand whatsoever," Gates told the committee during a hearing Tuesday morning. "If your question is, can any Microsoft product endure the competition, the answer is no."

Gates also said his company has no plans to leverage its position in the desktop market to control gateways to the Internet or charge extra fees.

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When questioned about exclusionary practices that require partners to not refer to the Netscape browser, Gates said consumers can always choose to use competing products. "Those people could always go out and switch their browser," Gates said. "There's no product that's easier to switch than a browser. It takes about five seconds."

Meanwhile, Sun Microsystems Inc. (SUNW) Chairman Scott McNealy said that while he didn't want government regulation of the industry, he was considering taking private action against Microsoft's alleged antitrust practices. "We're investigating that opportunity," McNealy told the committee members.

However, Netscape Communications Corp. (NSCP) CEO Jim Barksdale said he wouldn't take that route.

"I have no intention of taking private action against Microsoft or coming back here for laws," Barksdale said. "I don't think my company could afford it."

Both Barksdale and McNealy also repeated their request that the government vigorously enforce existing antitrust laws.

While carefully avoiding a direct response to repeated questioning from committee members about whether the Redmond, Wash., company has a monopoly over desktop operating systems, Gates returned persistently to his central point that Microsoft could easily lose its leading position if it ceases to offer product innovation and compete vigorously.

Gates also said that low-cost network computers could present a threat to the market for PCs in the future.

"There is certainly good competition for the desktop," he said. "We have customers who today are trying to decide" between PCs and NCs.

"No [one] company owns the factory for ideas," Gates said at one point in response to a question from Hatch. "Our strength does not come from any one particular product, [and] we've got to keep doing new things" or face being replaced quickly because of the short product cycles in the software field.

PC Week's John Rendleman contributed to this report.