[IP] Associated Press has an ERROR in reporting "IBM Wins Settlement From Microsoft"
Begin forwarded message:
From: "John F. McMullen" <observer@xxxxxxxxxxx>
Date: July 1, 2005 11:19:04 AM EDT
To: johnmac's living room <johnmacsgroup@xxxxxxxxxxxxxxx>
Cc: Dave Farber <farber@xxxxxxxxxxxxx>
Subject: Associated Press has an ERROR in reporting "IBM Wins
Settlement From Microsoft"
(johnmac -- This type of thing drives me crazy. OS/2 was a Microsoft
product -- they own it; IBM developed and owns OS/2EE. Certainly,
Microsoft sandbagged IBM by continuing to develop Windows as a
business alternative. IBM would have had an advantage over its
competition with its OS/2EE and microchannel architecture. had the
industry adopted OS/2 as the standard -- and the continued
development of Windows not only sandbagged IBM but brought down the
the leading application developers for MS-DOS, Lotus Development
Corporation (now part of IBM) and WordPerfect (now part of Corel
after a stop with Novell), who chose to only develop OS/2 versions
and not Windows ones -- by the time they realized they were on a
sinking ship, Microsoft's Word and Excel programs had become the
standards for Windows. This type of reporting only perpetuates a
misunderstanding of the history).
Fom the New York Times -- http://www.nytimes.com/aponline/business/AP-
Microsoft-IBM.html?
hp&ex=1120276800&en=a79539d008f7620a&ei=5094&partner=homepage
IBM Wins Settlement From Microsoft
By THE ASSOCIATED PRESS
Filed at 10:50 a.m. ET
BOSTON (AP) -- IBM Corp. will receive $775 million in cash and $75
million in credit for software from Microsoft Corp. to settle claims
that resulted from the federal government's antitrust case against
Microsoft in the 1990s, the companies announced Friday.
The payout is one of the largest that Microsoft has made since U.S.
District Judge Thomas Penfield Jackson ruled in 2000 that Microsoft
engaged in anticompetitive practices. Jackson's ruling cited IBM as a
company that Microsoft had forced to ''desist from certain
technological innovations and business initiatives.''
For example, Microsoft didn't charge all computer makers the same
amount for its Windows operating system, allegedly using higher
prices as a cudgel against PC companies that didn't comply with
Microsoft's wishes.
IBM had irked Microsoft in the '90s by pushing its own OS/2 operating
system as a Windows alternative and putting its SmartSuite
productivity software on IBM PCs, cutting into the market for
Microsoft Office programs. IBM also was an early supporter of Java, a
programming language that doesn't need Windows to run.
IBM hadn't sued Microsoft, but still pressed for retribution for the
behavior cited by Jackson. Microsoft reached a similar deal with
Gateway Computer Corp. for $150 million in April.
Separately, Microsoft has spent more than $3 billion in recent years
settling lawsuits by rivals, including a $1.6 billion deal with Sun
Microsystems Inc. in 2004 and a $750 million truce with America
Online, part of Time Warner Inc., in 2003.
Redmond, Wash.-based Microsoft still faces other legal challenges,
including a lawsuit by RealNetworks Inc. and an appeal of a $600
million antitrust ruling against it by European regulators.
Even so, Microsoft's general counsel, Brad Smith, said he believes
the antitrust issues are close to being resolved. IBM had been the
biggest rival with a pending claim.
''This takes us another very significant step forward,'' he said in
an interview. ''We're entering what I think is the final stage of
this process.''
IBM shares were rose $1.04, 1.4 percent, to $75.24 in morning trading
on the New York Stock Exchange. Microsoft shares rose 5 cents to
$24.89 on the Nasdaq Stock Market.
The U.S. case against Microsoft led Judge Jackson to rule in 2000
that Microsoft should be broken into two companies as punishment for
its monopolistic practices. But a year later, with the Clinton-era
Justice Department having given way to the Bush administration, the
government decided not to seek the breakup. The case was settled in
2002.
Neither IBM nor Microsoft have decided when the $775 million payment
will be accounted for. Microsoft set aside $550 million in April to
handle antitrust claims, so this deal might result in a charge from
that quarter, Smith said.
Whenever it comes, the payment would be a significant boost for
Armonk, N.Y.-based IBM, which showed a $1.4 billion profit in the
first quarter but fell short of analysts' expectations.
Even with Friday's deal, IBM reserved the right to press claims that
its server business was harmed by Microsoft's behavior. However, such
claims appear unlikely to surface soon, because IBM also agreed that
it would not seek damages for actions that occurred before mid-2002.
That means the findings in Jackson's ruling would no longer apply.
Copyright 2005 The Associated Press
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John F. McMullen
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