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Microsoft Settlement For Private Suits Rejected
Lumpish Scholar writes: "Reuters story here. The judge "could not endorse the settlement ... Microsoft will have to start from scratch in negotiating a new settlement or fight the scores of suits in court."" Reuters also has an article from yesterday that looks at the positions of the various parties prior to this news. You will recall that Microsoft was proposing to settle the civil suits brought against it by donating free Microsoft software and old computers to schools. And do remember - because this always seems to confuse people - that the case brought by the Department of Justice and state governments is distinct from these suits filed by individuals.
I have friends that know Judge Motz here in Baltimore. He was described to me as a person with "A strong sense of fairness" and a good judge. I had a feeling he would reject that BS settlement ! woohoo !
"Whoever would overthrow the liberty of a nation must begin by subduing the freeness of speech."--Benjamin Franklin
There really isn't anything to say to this, though, other than "Thank God". This was the most ridiculous idea that I've ever seen in the courts, and I almost thought the system was going to allow this mockery through.
If it had been allowed, how much damage do you think would have been done to Apple? Apple bases a signifigant portion of their business in Education... Would Microsoft have been able to break Apple's tenuous hold on the market?
When encryption is outlawed, ?o'AZ-,++o+i++##4AoA+-/-C++bI+/.+~
I am not preaching linux, mac, or any other OS, just don't support microsoft!
ender-iii
that Judge Motz didn't blab to any reporters in his chambers that the settlement was patently unjust or that the microsoft execs were behaving like spoiled children.
(Don't mind me, but I've been burned before with false-relief that the truth will out.)
From the article: "Class-action attorneys from California have argued the money should be reimbursed directly to customers who were overcharged for Microsoft software."
This is interesting. How does someone actually determine the worth or 'price' of software? Generally you want to take all your overhead, add some profit, and take a good estimate of what your sales will be. Then you'd determine a price. (I realize this is very OVER simplified) You would also compare your product against competitive products and see where you sit in comparison to them price/value wise.
Since Microsoft essentially had a monopoly on the PC market for sales of Operating Systems, their competition was none. They could charge any price to the OEMs and Consumers for the retail packages they felt like, which at least appeared to be a reasonable price to most customers.
But how would they determine if someone was overcharged by Microsoft? Is the very fact that when you buy a PC, you automatically have Windows installed on it and are also paying for the OEM version of Windows that was installed on that PC?
This could easily be argued as a 'value-added' feature of that PC. Where the customer ultimately benefits because the cost of an OEM Windows license is less than the Retail Windows license.
I personally loathe Windows, and don't use it. But I'm more curious on how they determined that Microsoft overcharged it's customers.
MS may have lost this one, but they are patient in seeking complete market domination. There are many palms to grease in DC. Eventually someone will rise up in Congress and ask that we brush aside this blight on the profits of such a fine company as Microsoft.
I'd like to believe that won't happen. But too many legislators have the techincal comprehension of a sea slug. Nothing substantive will ever happen to Microsoft at the behest of any branch of the US Government. Eventually the dissenting states will be forced to give up the fight because they simply can't afford the up-front cost of litigation.
Wait. Donating old computers and software would cost almost nothing to Microsoft and would guarantee a new generation of people dependent on using only Microsoft software. This would be more of a benefit for Microsoft rather than a punishment. Perhaps a better punishment would be to offer rebates from Microsoft. This would immediately benefit people who have bought Microsoft software (those who are allegedly ffected by the monopoly.)
I have always wondered about this. If I had only two choices; Microsoft and Apple, I think I would prefer a world ruled by Microsoft than by Apple. The only thing Apple has going for it is that they are the underdogs and people like underdogs.
:)
Apple's philosophy has always been about domination and control and they have never encouraged tinkering and hacking by individuals. At least Microsoft freely release GW-Basic in the early days and how many people first became interested in programming due to the availability of Basic. Microsoft has also supported the porting of Perl and Python (via Activestate) to the Windows environment. Also, Microsoft's software has been typically cheaper than Apple's
Also, Apple has shown to be very anti-competitive in other ways. Remember Apple 's sordid attempt to foster clones? As soon as the clone manufactures became a little too efficient and began competing a little too well and delivering products to consumers at lower cost; Apple put their foot down and revoked licensing.
I am glad tho that I do not have to pick between the lesser of two evils
Interesting. According to their last 10Q (that's an SEC filing that is made every quarter) Microsoft has $3.1B in Cash. Microsoft has a suprisingly small amount of long term assets (just a few $billion). Most of their money is tied up in investments. All of this is available through Edgar Online but that requires a registration (may even cost money - I seem to still have an account from my prior job).
As for Bill Gates, it really doesn't matter. As much as you may hate him I don't see the courts "piercing the corporate veil" to get to him.
By the way, I am not disputing your point in anyway but just clarifying your made up numbers.
Microsoft got a slap on the wrist from the Feds. They figure that the Bush administration will be firmly in their corner. Because of all the fallout and implications between Enron execs and the Bush administration. Bush may want to do something to show that he's not a pushover for business. Even if he doesn't pull strings to go after MSFT, I'm sure that he won't do anything to help them. Congressmen will probably think twice about helping out a huge corp in the near future as well.
Jesus used to be my co-pilot, but we crashed in the mountains and I had to eat him.
I haven't read the report myself, but one analyst on "The Street" TV show was dumping on them for the fact that something like 16% of their income is from investments, not product sales. His thinking was that this "spare money" should be given as shareholder dividends (of which there have been none in a long time).
I wouldn't mind lawyers getting paid by the boatload for all this stuff, as long as Microsoft is the only one that has to foot the bill. MS should also pay hefty court fees for wasting so much of the court's time.
How recently was that? Looking at their 3rd Quarter 10Q they had a $1B Investment loss in the third quarter. Analysts always like to bitch and moan about dividends but if Microsoft were to cash out on a lot of their investments you would likely see a snowball effect throughout the market.
That is one of the points I wanted to add to my other posts about Short Term investments and cash. You all want to see Microsoft pay $30B in penalties but you do realize that the effect on the market would be devastating. This is not just about Microsoft, that $30B in investments is in a lot of companies. While a lot of you kids out there might nor care, some of us have already seen enough of our 401(k) float away.
Who said anything about 30B in penalties? I said divest the OS. So you with your 401K suddenly have stock in two companies instead of one, just as with AT&T. I don't think anybody who held AT&T stock on the day of the split (and held it since) is complaining.
The snowball effect you are worried about is because one company has too much economic power as well as OS power. Gee... OS monopoly... enough finances to tip world markets... richest guy in the world... anybody seeing a pattern here?
Maybe "cash" was too specific a term. But "short term assets" is not a second line in the summary... it's a resource they can call upon on short notice. I call that "close enough."
IANATA (I am not a tax attorney), but I don't think the IRS lets software companies write off the "value" of "donated" software. (Any more than I could write off $75 an hour in time "donated" to charity.) That's just too big a loophole.
Furthermore, I'm pretty sure that you can't write off civil damages (or criminal fines, of course), whether or not the case was settled out of court.
Somebody with a law degree correct me if I'm wrong.
Several points. I realize that you didn't say penalties. That was more of a "for everybody" sentiment. As for stock, my 401(k) does not contain stock, it contains funds. Microsoft splitting would probably create two stocks that have a combined value lower than the original. And there are lots of people with worthless Lucent stock who are complaining.
Don't even get me started on the AT&T breakup. How phone service now sucks. How we had to deal with slamming and constant telemarkers. how our phone bills are not much lower, they are just spread out over more bills.
And if you read my posts in another group, Microsoft hardly has too much economic power. They are 79 in the country and 201 in the world in revenue. If any of those companies, or any person, divested that much money it would destroy the economy.
Of course, their short-term investments are classified for sale. If they were not they would be devalued to cost (or nothing). You obviously aren't an accountant. I on the other hand am. Just because something is available for sale, doesn't mean that it can be sold.
Figure it this way - Case settled, Microsoft has to pay $20B. Stock market crashes and that $30B in short term investments is worthless wheras the $3.1B in cash is still good. This is why there is a distinction on the balance sheet with between Cash and Cash Equivalents and Short Term Investments.
A Cash equivalent by the way is more along what you are thinking is a short term investment. It is anything that can be immediately turned into a specific amount of cash.