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MGTC45-Lecture 4

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Management (MGS)
Andrew Stark

MGTC45 Lecture 4 Microsoft Case Cont’d  Microsoft was fighting two battles, legal (anti-trust, Netscape and bundling issue) and network externalities (dominance in one market might affect other markets, everybody is on the Windows platform)  The public was watching the legal issues and the government issue  The argument that MS made to the public to convince them that the browser and the platform are the same product, an efficiency that emerges from putting the two products together, namely the elimination for a consumer to have to choose which browser to get  MS did not dispute the claim that IE is hard to uninstall, they accepted it  MS also used Bill Gates to write opinion pieces to newspapers to defend what it was doing in court  One of the things that Bill Gates wrote was: “Consumers have a certain expectation about what they are going to get on their desktops when their operating system is windows. It’s like if they are buying the NYT news paper and they see the WSJ business section inside. The consumers would be disappointed”  The online world is not like that anyway, so the metaphor doesn’t work  Not that easy for the consumer to throw out one browser  Bill Gates wrote another one “Yes we are bundling explorer free with our operating system, but think of it this way, when you go to a movie theatre to see a 3D movie, you get free glasses. By providing the browser, you’re allowing the customer to be able to access more products online. The relationship between MS and Netscape is like that between the Optometrist and the Movie Theatre”  Metaphors are really important in government relations and they are picked apart  There were some ideas to split MS into smaller companies that would have to compete with other browsers  Bill Gates was paranoid that somebody would be brilliant enough to upset his dominance in the market  First Argument: “I behave like I am in a competitive market”- Bill Gates  He claimed that Netscape was trying to make applications to make it so that they won’t need
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