The timing of Microsoft's $45 billion bid for Yahoo! may have as much to do with the impending departure of the Microsoft-friendly Bush administration as it does with the software giant's strategic plans.
Given the antitrust agencies' easy approval of Google's Doubleclick acquisition, it appears that "flat Web" thinking has taken hold in Washington. This is the notion that there are no barriers to entry or growth of Web-based companies, simply because of the Web's open architecture and massive scale. But if that is so, why hasn't Microsoft been able simply to grow its own Web presence to the size it desires? It's certainly not for lack of trying.
It's hard to see any merger-specific synergies resulting from this transaction. This is plainly a grab for Internet traffic so that Microsoft can continue to defend its Windows/Office monopoly against nascent Web-based alternatives. Technologically speaking, there are no new products or services Microsoft can offer to the 27% of Web users visiting Yahoo.com every day that it couldn't already have delivered to the 18% who visit MSN.com.
Even so, Yahoo's stock price indicates that Wall Street is pretty sure this deal is going to go through, and I have to agree. Our current breed of antitrust enforcers, who have already decided that the Web is flat and that media concentration is no longer possible, will define a broad market and assign tiny market shares to MSN and Yahoo. Meanwhile, the Microsoft-free world just got a whole lot smaller today.
Of all the honorary degrees Harvard could have awarded Bill Gates, he gets a Doctor of Laws? Computer science, business or economics, I could see. Even public health, education or political science for his philanthropic achievements. But during this unprecedented era of attacks on the rule of law by the wealthy and powerful, law schools should be leading the resistance, and Harvard should be in the vanguard. Harvard should have found a way to honor its most distinguished dropout without dishonoring the legacy of the late Prof. Phillip Areeda and the many great antitrust enforcers who have graduated from its law school. (These articles explain how U.S. courts have largely allowed Microsoft to violate and evade the antitrust laws for more than a decade.)
The European Commission's competition directorate is publicly warning Microsoft against extending its practice of bundling security software features into Windows, raising the possibility of an antitrust challenge to the planned introduction of Windows Vista in 2007.
Microsoft is planning to "integrate" a virtual machine monitor into a forthcoming version of its Windows Server (codename "Longhorn") operating system. If this sounds eerily familiar, you're right -- it is 1995 all over again.
I'll be presenting a talk about this Aug. 11 at the 2006 Intellectual Property Scholars Conference at UC-Berkeley's Boalt Hall School of Law. You can read an early draft of the article ("Antitrust in the Age of Virtualization: A First Principles Approach") here.
With over 100 speakers on the program, there's a good chance you'll be presenting at IPSC as well. If so, leave a shout out in the comments!
Added Aug. 11: I've posted some photos from the conference.
While press reports have touted Microsoft's principles as a commitment to "opening up Windows a lot wider," it is not hard to read between the lines of the announcement's text (underlining added) to find a commitment only to more of the same:
Microsoft Corp. recognizes the important role its Windows® desktop operating system products play in the information economy and the responsibilities that come with that role. To promote competitive opportunities and otherwise enhance the appeal of Windows to developers and users, Microsoft is committed to running its Windows business in accordance with the following principles that address computer manufacturer and user choice, opportunities for developers, and interoperability for users. These principles will apply to Windows desktop development projects going forward.
No mention of Windows Server. No mention of unremedied harms to competition going backward. And in the meantime, Microsoft will be busily tying its virtual machine monitor (Windows Server Virtualization) to Windows Server "Longhorn."
An examination of the legal and technological structures that keep almost all of us voiceless, by Prof. Andrew Chin (who?) at the University of North Carolina School of Law and Prof. Jay Kesan at the University of Illinois College of Law
voiceless is a new blog. If you like what you've seen so far, please consider making voiceless a little less voiceless by adding a link to it from your blogroll!
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