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Microsoft to Pay AOL $750M in Settlement
aoteoroa writes "Microsoft will pay $750 million to AOL Time Warner to settle an antitrust lawsuit filed by AOL on behalf of its subsidiary Netscape last year, the companies said Thursday.
At first blush the deal looks good, but I can't help but wonder how a deal that ties AOL to IE again will negatively impact my favorite web browser." Here's a news.com story that also covers it. Is the browser war over? If so, it sure was anticlimactic.
I have to agree with the poster on this. I'm really
disappointed by this development. I would rather have seen an
agreement that required Microsoft to bundle AOL and Netscape
with their operating systems for the next 7 years. As much as I
get bugged by AOL's marketing, I really detest the thought of
these two combining forces.
I hope some of the states stick it out, and take the Anti-Trust
suit to the Supreme court. I think it would be incredibly
beneficial for the industry as a whole if Microsoft got busted
into chunks.
Sadly this ruling is nothing to Microsoft. $750 million is
something they can afford to pay using some interest from their
massive cash reserves
Doug Tolton
"The destruction of a value which is, will not bring value to that which isn't." -John Galt
The browser wars aren't over until IE and Netscape are but smoldering craters, and Mozilla is the victor.
When you don't have a leg to stand on, don't even get up.
Money shifted from one giant corp to another, big deal. How will this help their customers?
That was never the point. This is all about the executives at both companies making boatloads of cash, which they will.
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AOL receives a long-term, nonexclusive license to use Microsoft's Windows Media 9 software, which offers playback, delivery and rights management for digital media.
AOL will receive a seven-year, royalty-free license to continue using Internet Explorer on its flagship online service. Microsoft will provide beta tests of future Windows versions and allow AOL to participate in tests of its upcoming "Longhorn" operating system at the same time and on the same terms as other software vendors.
The companies will explore ways for AOL and MSN Messenger to interoperate, which Microsoft has sought for years.
Sounds like Microsoft is getting everything they want...
Well, it's official Netscape is dead, I guess.
And its sad, with so many other great alternatives out there based on their original source, Mozilla, Safari, etc.
But I think what bugs me most of all is that despite having some passable alternatives to IE, none of them will ever overtake IE.
Why? Because it takes the backing of a major corporation to build a browser that will appeal to non-slashdotters. Unfortunately, in terms of usability, the Mozilla and its derivatives fall WAY short. And if the history of open-source is any indication, they'll never catch up.
. Sad day for those of us wanting to use something other than IE.
No. IE hasn't done anything innovatve in years. Mozilla, Firebird, Camino and Safari on the other hand keep pushing the envelope.
.com) bubble burst, M$ moved on.
Microsoft's browser is in the dark ages. I'm not sure they care anymore. When the internet (aka
Karma: The shiznight, mostly because I am the Drizzle.
Okay, now I know I should be flaming Microsoft and everything, but wasn't this purely a case of better product? I seem to remember IE being the big pretender, only to constantly revise it's software into something that was actually better than Netscape's. Anyone who actually tried to design for 4.7 and its ilk was faced with probably one of the more buggy products. IE(before Mozilla) was one of the products I gave Microsoft credit for.
Are you nuts, expect AOL to use IE and get rid of any remaining Mozilla developers. It's a business not a charity.
Well, let's see... The world's largest media company teaming up (formally or informally) voltron-style with the world's largest software company? I think not. They should be in competition with each other, not buddying up their buddy lists so there will be some sort of interoperability between MSN Messenger and AIM. Any level of collusion across markets, specifically AOL and Microsoft, sounds like a rainy day to me.
Its too bad that there arn't any winners here. Satan can pay Satan all he wants.
AOL and Microsoft are not the same company, and Microsoft is the winner here. AOL has something like 30 million customers, and for the forseeable future most of them will be using Internet Explorer and Windows Media. The more people use IE, the less reason developers have to produce standards-compliant content in favor of IE-specific content, and the less reason people have not to use FrontPage or other products which work well with IE.
The more people use WMP, the less reason content producers have to use QuickTime or Real in favor of whatever Microsoft is selling for content creation and delivery.
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I was gonna say, over my ass! AOL now gets the "priviledge" to use IE for free? It sounds like a plan being laid out by MS...you sort of like when you're really nice to your parents to get something you want. That definitely doesn't seem like the end of the story. I do hope they stick with a gecko-based browser, though.
It's a business not a charity.
And MS is AOL's main competition.
Mozilla's not going anywhere. Having a full fledged IE / Outlook replacement for everyone not tethered to an exchange server is a Very Good Thing. MS gains far more from AOL using IE than AOL does, and they always have.
This deal just gives AOL seven years to decide if/when they want to switch over to IE.
Wait, I thought AOL was considering using Mozilla/Netscape instead of MSIE?
They were. They've been playing with beta versions of AOL based on Gecko (Mozilla/Netscape's rendering engine) for years now, and AOL for Mac OS X is based on Gecko. Apparently it was just a scare tactic to get Microsoft to play nice ("do what we want, or we'll switch to Gecko, and here's proof that we're not kidding").
Does it really matter, though? Most people are moving towards broadband, and most geeks don't go near AOL.
The more people use IE, the less reason web designers have to produce standards-compliant web sites in favor of broken sites with MS-specific extensions that only render correctly in IE. And that means when I use Mozilla or Safari or whatever non-Microsoft browser I want to use, I'm more likely to get pages that don't render correctly. In order to view those sites correctly, I'd have to run IE, and in order to do that, I'd have to run Windows, and that means money in Microsoft's pocket (unless I pirate it like everybody else).
So yes, this does matter, and it's a bad thing.
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What this settlement reflects is that the Time Warner part of AOL-TW is now firmly in control, and America Online people are not.
The Time Warner people are interested in selling media content for profit, not in technology battles like the AOL people. Hence the Windows Media 9 and DRM parts of the settlement.
Why continue to fight technology battles like IM or browser technology? There's no money in that. Nor is there money in continuing to make enabling technology like browsers etc. to sell your content for profit. Thus, the TW people are happy to use Microsoft browser technology and that's why the 7 year technology agreement is in there.
The AOL access business is slowly dying as people move to broadband, and the AOL-software-only subscription isn't going to replace that anytime soon. Sure, why not cooperate on IM formats? Not cooperating only opens AOL up to FTC complaints, and IM interoperability was at some point inevitable.
Microsoft was going to have to cooperate with AOL on Longhorn compatibility anyway; they give up nothing with that part of the settlement. Handing out AOL discs to system builders isn't much of a hit, either.
This is clearly the TW people saying "Take the $750 million, stop fighting battles that make no money, and go back to what made us huge long before AOL came along - selling content."
They say that $750 million is nothing for Microsoft as they have over $40 billion in the bank, but that's still almost 2% of their tresury, quite a significant amount for such a huge corporation. Am I the only one who thinks that 2% is a significant amount to be lost in a lawsuit?
Yeah... but this is cash.
That was mainly fake internet money - a stock swap during the boom probably wouldn't look that expensive now...
"Safari for the Mac is one of the fastest and innovative browsers on the market."
I hear this a lot. Not intending to troll, but what is so innovative about Safari? The last time I saw something really new in browsers was Opera 7's 'Fast Forward' to match the likely next link (or work for image galleries), before that maybe Opera's 'Find in page' or Mozillas 'Type ahead find'.
What is so innovative in Safari? From what I've seen so far, it doesn't add anything new that other browsers lack.
Many people have already commented on it, but if a company can make money from selling a browser, the browser war can't be over just yet.
How small a thought it takes to fill a whole life
If I worked in the Mozilla group, I'd feel pretty worthless right about now. I wouldn't be surprised if AOL/Netscape abandons Mozilla entirely after this. What's the point? Mozilla will never ship with AOL, and AOL doesn't seem to think it's bad that they'll be using IE forever. The sun is setting.
# Erik
some points:
.75 bil USD from MSFT is a win for them. It's .75 bil USD more than they'll ever get from Moz users
1) AOL cares nothing about the browser wars - they wanst customers - period
2) AOL getting
3) Since when did 'we' care two hoots about what AOL did or didn't do? Now, if they bought a gnu/linux vendor and started to ship knoppix-like CDs with everything locked down so their tech-support was even easier.....
4) APPLE used KHTML cos they liked it. Next iteration, they might use a different renderer for safari. They're allowed to! It's not political for them.
5) Isn't the desktop more important than the browser? Isn't the browser less important than the 'suite' of Net-scraping-tools these days? Isn't there space for a start up to run a bare bones distro w/ moz, OO, and some neat GNU audio/ video apps that the end-luser doesn't realise is a distro? Isn't that where the sweet spot is?
http://milkshake.dexy.org
Winners
MS - they get off the hook by giving up $750m which others have pointed out they can easily afford given their cash reserves. More guaranteed market share for IE. This isn't a penalty, its an investment for them.
AOLTW - Given how the AOL division is a primary cause of the massive amount of AOLTW's debt, getting the $750m looks great on their balance sheet. If I'm not mistaken, dealing w/ AOLTW's debt was one of Dick Parson's most important charges when he took the helm.
Losers
Mozilla et. al - Having a Gecko based AOL client would have given an instant boost to Mozilla's marketshare / mindshare which negatively effects...
Web Standards - Anything that boosts IE and lessens Mozilla increases the likelihood of MS induced standards
Consumers - Less competition (browsers, streaming media formats), more MS entrusted DRM
Jeesh - what exactly does antitrust even mean in today's business climate?
For the love of $DEITY, loose != not win!!!!!
You are missing an important point: AOL/TW make money from the movie, they lose money from the development of a browser when they already have one for free.
This is an M$ move to cut the competition out of the game by removing development funding.
An infinite number of monkeys will eventually come up with the complete works of
With around 95% of the market it makes sense that Microsoft hasn't really been adding new features to Internet Explorer.
But I'd guess that with the growing dissatisfaction with pop-up advertising and the growing popularity of Mozilla's (or Firebird pop-up blocking they might have to rethink this soon.
Quack, quack.
I'm presuming you're referring to some type of fast-rewind feature. Opera's got that (not sure if the button's on the toolbar by default though)
Mouse Gestures. Once you have learnt them, you fly through the web. The only drawback is on those rare occasions you have to use another browser it gets very frustrating when you use a gesture and... nothing happens...
Functions like page zoom, inbuilt mail client, "restart the browser where I was browsing last time", inbuilt download client, easy bookmarks (including my the 'these were you IE/Netscape/whatever favourites'), popup protection and a whole host of tweaks and twitches are great.
An infinite number of monkeys will eventually come up with the complete works of
I may be being extremely stupid here, but why would they use IE over Gecko. No compliance and the posibility of restrictions vs. W3C compliance and nice shiny open sourceness. The choice seems obvious to me
Ah, the naïvete of the young. Imagine me, a old curmudgeon at AOLTW, sitting in my office and wondering how the stock has tanked.
I get a $750M cash offer, which is very pleasant to have. Promises of cooperation. Whispers of "you won't have pay all those Netscape engineers and QA any more, our IE team will work with you to integrate mshtml into AOL".
I see prospects of not paying lawyers. I see not fighting one of the world's most cash-rich companies in a draining legal battle that analysts give me hell about in each earnings call. I see some prospect of working together instead of slugging it out.
I hear how 95% of the web already uses IE. And how MS is 'committed' to making the best better with time*.
And the choice seems pretty obvious to me.
* btw: MS's PDC conference in october is supposed to have some pretty neat news about the next version of IE. Expect UI tweaks (popup blocking at least, not sure about tabs), managed code and a significantly better security model.
Go somewhere random
Are you nuts, expect AOL to use IE and get rid of any remaining Mozilla developers. It's a business not a charity.
Actually, AOL's savings by getting rid of a developer or two are negligible. M$, on the other hand, wins big time by having an entire AOL base suddenly switch to IE (I wonder, if it the cash for the settlement was the only thing AOL was after in the first place... We'll never know...)
For them it's a win-win situation. MS has excess cash and wants more domination; AOL doesn't care which browser its customers use, and wouldn't mind the cash.
The problem is that they are a couple years too late. If this happened a couple years earlier, when mozilla was much weaker, it could've crippled it a lot. Now, when I hear people saying that AOL switching from mozilla to IE will kill mozilla, I can't help but laugh. I seriously doubt that it will even significantly impact the userbase - a lot of AOL people use IE right now simply because there is a cool blue icon on their desktop saying "Internet", and that's what they click on when they check their msn.com...
Jobs? Which jobs?
Mind you, I consider this a Very Bad Thing. I don't like seeing any company, much less Microsoft, control such an important technology so thoroughly. And MS's sloppy attitude towards W3C standards (especially CSS) drives me up the wall. But simply creating superior browser technology is not going to win back all those desktops. It doesn't matter if kHTML or gecko are more innovative or standard-compliant. Nor does it matter who has the coolist features. And least of all does it matter that MS used dishonest and monopolistic tactics to gain 90% of the browser market.
What matters is that IE has that browser dominance, that people are not going to switch back just because some geek tells them their browser is technically inferior. Nor do they crave standards compliance: that just means that other browsers don't render all their IE-specific web apps "correctly".
Don't put your hope in AOL switching to Gecko, either. First of all they won't do it -- they can afford a few license fees in order to avoid making life even more difficult for their subscribers. Second of all, AOL doesn't have that much of a future -- web users are getting more sophisticated, and realizing they don't need that bloated and obsolete client to access the Internet.
Flame on! I know you guys don't want to hear it. But yeah, MS has won the browser wars.
MS has no reasons to *not* play nice, their antitrust battles are dying down one by one.
Well, I can think of one reason they may not play so nice with AOL.
Can you say "MSN"?
The Hearst empire basically crumbled at the first serious criticism. It was a one-man thing, and he couldn't do anything against the release of `Citizen Kane' and at any rate there were lots of other newspapers in the US and abroad.
Standard Oil was the most powerful oil company in the US but not by far the only one in the world. They were nasty, sure. The anti-trust lawsuit reigned them in.
Microsoft controls the desktop of 95% of computer users in the entire world. They have managed to be convicted of anti-trust behaviour and to get away with it scott-free. They have a history of having bought or put out of business dozens of companies that were competing with them directly over the years. They are the leader of the information age. Their goal is to control your digital future, from embedded systems to the world's most powerful servers and supercomputers via your entertainment systems.
In the future, if Microsoft has its way, you will not be able to read anything or drive anything or see anything or work on anything if it is not veted by Microsoft. Its goal is to control *everything*, not just your silly newspaper or your silly car.
Finally, both WRH's empire and Standard Oil were brought down. No one knows how to do that yet with Microsoft.
Which one is scarier, again?
... Unless just working reliably and quickly counts as innovative. ...
...this day and age, a piece of software working reliably and quickly is innovative.
Perl - $Just @when->$you ${thought} s/yn/tax/ &couldn\'t %get $worse;
I'll call your bluff.
/. are shocked that the good guys might be the target of a suit without merit. Should have thought about that when M$ got sued.
How about you go ask IBM, Lotus, Novel, Be, Apple, Dell, Gateway, HP/Compaq, AOL, Netscape, Sun and Real what they think about Microsoft?
When I have to worry about my office product being compatible with Microsoft Office, thats a problem.
When I have to worry if I can use my bank's online processing because I'm not using IE, thats bad.
If computer manufactors are threatened to lose their precious Windows rebates if they sell computers with other operating systems, thats an illegal monopoly.
When Microsoft pays the game stores to plaster customers with XBOX stuff, thats also bad.
What Microsoft wants to control everything that runs on a computer, thats scary.
Don't get me wrong, I used to love Microsoft. Then I used to think they were funny. It was just funny watching them walk around doing whatever they want. You had to love the arrogance. But once the anti-trust stuff happened, it wasn't funny anymore.
But, somehow people on
For someone who knows about Standard Oil and Hearst and his paper empire, you sure are clueless when it comes to Microsoft.
When Standard Oil was big, what was the most important "tech" then? Industry and more importantly Oil.
Hearst is a non-issue, he was just an asshole (his home in california is beautiful however). When the lusitania was blown up and his paper printed it 5 hours before it happened, thats pretty fucked up.
Now what is the most important industry?
Now what company over the last 20 years has been the most influencial in said industry?
Now what is the current state of that industry?
Don't get me wrong, I'm not saying things are fucked because of Microsoft. But they do play a key role and the illegal monopoly charge was very deserved.
can't sleep slashdot will eat me
This is slightly skewed from the topic at hand, but I just can't help it.
I just realized tonight that I actually feel now that AOL and MS users actively *deserve* what they get from these companies. How many years now have people been trodden over and acted like they enjoy it? I think maybe they actually *do*, but I just don't care anymore, and at this point, if I'm sitting near someone who is trying to open a corrupted word document or wrangling with AOL tech support I just sort of laugh inwardly. I used to feel sorry and identify with those problems. Now it feels like justice.
I know it's elitist and all, but I seriously wonder sometimes if many of the people out there using MS and AOL are the kinds of people the Free Software Movement should be wooing. I work in a menial tech support job (where I'm forced to actually help, and not just smirk) at the moment, and the amount of stupidity out there in the user population is staggering. These are people studying and teaching at a major university, some of whom are involved in incredibly complex subjects... and they don't "get" what a file is versus a folder, or what an email "address" is. And part of this stems from the watering down of the tech world by companies like this to the point now where everyone bases their idea of what a Killer App (tm) is on the abilities of either the mythical "Joe User" or someone's grandma. And I've got to say, if I ever run into either of those two people, the stupidity confronting me will probably be my end.
How does this relate to the MS/AOL/IE/Netscape/$$$/Free Speech/Beer topic? Well, I'm not sure, except that I think maybe it's not such a bad thing that 90 % of people use Windows. After all the years of dumbing-down, it suits most of them.
Flame away... it's just my mood tonight.
B
"We must still have chaos within in order to be able to give birth to a dancing star." --Friedrich Nietzsche
Ma Bell is AT&T.
Want to know how big they were?
Verizon, Bell South, Lucent and the current AT&T all were created from the breakup after they lost the anti-trust suit.
can't sleep slashdot will eat me
Maybe Safari has some of these features, but it sure as hell didn't introduce them to the browser world.
Clever signature text goes here.
AOL/TW is a huge company and development of Netscape is a tiny tiny fraction of their cost to run their business.
Spoken like someone who has never worked in a large company.
Usually, each division in a company has to justify its own budget, on its own terms. (This is called cost-center budgeting, to which more and more companies are returning). The head of a division can't point to a more profitable section of a company and say "Look, they're making a profit, so I don't have to."
Now, on the other hand, the top brass at AOL might continue to fund a non-profiting product (like Microsoft does with several of its products like IE, XBox, MSN, etc.) because it fulfills a strategic goal. I'm just not sure that they'll be looking at Netscape as a strategic asset anymore.
Seven years is a long time... look at Netscape/IE seven years ago. Hell, in seven years, we may not even be thinking about the Web in terms of discrete browsers.
Not realy. AOL isn't really AOL anymore, its back to being Time Warner. AOL is the division that the Time Warner folk are willing to give away for free to anyone who will take over the debt.
This is about Time Warner getting back into its core business and looking to the strategic alliances it will need after the AOL division is jettisoned. At this point the Time Warner execs realize they were completely taken for a ride. They effectively gave away half their equity for a company with a zero, possibly even negative actual value.
Going forward Time Warner wants to be able to sell their stuff over all the distribution networks. They have now worked out that AOL is a busted flush, it is a dialup play in a broadband world. AOL does not have content, never has, it is an aggregator, not a creator.
Looking for an Information Security student project suggestion?
Try http://dotcrimeManifesto.com/
That's what I do--I close the window and look for another site. This is partially based on principle and partially based on my own convenience.
I have a form letter that I fire off to the webmaster of any IE specific site. Reason, I worked on several embedded set top browsers. I mention that in so restricting the users of the site, that the site loses market share. Using established standards, and not restricting the user, more market share. Second reason, code that checks for specific browser implementations requires constant updating creating more cost in IT. Sometimes I would even mention the fact that I used their web page just fine by setting the "user agent" to lie about what browswer I was using.
One year ago, I was sending this form letter out daily. As time goes on, this has become a non-issue for me and my browsing habits. I actually saw a few web-sites change. Instead of closing the window, send 'em a notice that you don't like it.
I used to wonder what was so holy about a silent night, now I have a child.
Microsoft just payed AOL $750 million in return for AOL continuing to use IE. If AOL didn't have Netscape to use as a bargaining tool/threat, there's no way they would have been able to get so much cash from Microsoft.
Netscape development just turned a big profit for AOL.
AOLs threat to dump MSIE is their biggest bargaining chip against Microsoft. I don't think AOL put 3/4 Bn into mozilla, so maybe it wasn't such a bad investment after all.
Spoken like someone who has never worked in a large company. Usually, each division in a company has to justify its own budget, on its own terms. (This is called cost-center budgeting, to which more and more companies are returning).
./ - start out with some snarky, ad hominem attack. Okay - I'll play, too. If you had ever worked in a large company you'd know that lots of cost-centers are exactly that: cost-centers - *not* profit centers. Many large companies are willing to offer a product or service at a loss because they believe that product or service, considered as part of all products and services is worth the loss.
./: dedicated to raising the level of social discourse and civility.
Typical
Which is exactly what you say later in your post. So what's the point of your opening attack sentence?
Oh, never mind...I forgot it's