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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.
The browser wars are over? They are just starting to get interesting again. Safari for the Mac is one of the fastest and innovative browsers on the market. The Mozilla browsers continue to spawn lots of innovations and now seem focused on ease of use and performance. Things are just starting to get interesting again.
The big news in this article is that MSFT might be successfully pushing windows media player into the AOL empire. *shudder*
Also frightening, this deal gives AOL seven years to use IE royalty free - hopefully AOL continues to look towards a gecko based browser for their legions of users.
AOL will also be licensing Windows Media 9, which could affect WinAmp.
This deal could mean more AOL content will require MSIE and WMP9. Since AOL for Mac OS X uses Gecko and WMP9 isn't available yet, that would mean Mac AOL users wouldn't be able to access that content - exactly the way Microsoft likes it.
It seems AOL either has no idea what they're doing, or has decided they're no longer interested in Netscape or NullSoft. Is it possible both might soon be for sale? Clearly they no longer fit into the rest of the company's plans.
Of course, it would be ridiculously amusing if AOL suddenly announced that they were switching to Gecko anyway, even though they have a license to use MSIE for free. We can dream, can't we?
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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
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...
It should make us nervous whenever companies of this size adopt a cooperative, rather than a competitive, stance towards each other. Why was this case really settled? Probably because they both were able to agree to cooperate in the future on new DRM. Caveat Emptor!
sig my booty, check my website
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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When asked for comment on whether Safari was at risk, Apple CEO Steve Jobs replied, "Nah, we offered them a free, unlimited iTunes account in exchange for a perpetual license. They snapped it up."
All your code are belong to us.
--- SCO Group
Microsoft did not play quite fairly. When one installed the latest internet explorer, they were also changing windows DLLs that are preloaded on boot. This gives Internet Explorer a significant speed and stability boost. Netscape, on the other hand does not have that liberty.
I believe there was a quote from the antitrust trial in which a memo was brought forth by the VP saying that Windows should be altered "so that running any other browser should be a jolting experience for the user"
Microsoft may have made a better product in the end. But it came with cheating and sabotage.
My girlfriends friend, who is also a girl, was having problems with her Windows computer. I went over to her house, fixed all her windows problems, and when I was making sure her cable modem worked, I opened up IE. The default home page was the cable company's home page with **5** popup windows. I asked her very politely if she liked popup windows. She of course said "hell no." I told her I could install a browser that was small, fast, and didn't accept popups. She was very, very surprised that there was such a thing. I installed MozillaFirebird and put a shortcut on her desktop called "Better Internet Browser." Her whole family now uses it.
The browser wars will only be over when everyone agrees on what a "better browser" is.
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?
This is finally it: The beginning of the endgame between Closed and Open Source, the last battle between Good and Evil, Armageddon in the software universe. AOL is doing so bad that "AOL Time Warner" has been considering dropping them out of the mother company's name; and Microsoft for all its resources can't help but feel the penguins and daemons breathing down its neck if even places like Munich will not heel when they call. Their backs are not quite against the wall, but their bums are touching brick, and they will not go away without one hell of a fight. I think it is safe to say that this is the worst threat that Open/Free Software has ever faced, given the sheer political and financial clout these two companies have combined.
Oh, and think of the irony that it comes at a time when Neo is in a coma and has been revealed to be not the Saviour, but the Angel of Death; when Buffy has been discontinued; and when Nanny Ogg is feeling just a wee bit under the weather...were these not omens that we failed to heed? How could we be so childish to believe these signs were just random events in popular culture...
It's got a lot of those small features that make Apple stuff so damned cool.
Stop/Reload use the same button, depending on whether or not the page is loaded. Why didn't anyone else think of this?
The bookmark manager is so sweet it's been known to make grown men cry. So cool that the Camino guys are working on copying it.
Three meg or so download. Remember when Opera could claim this?
SnapBack makes getting back to search results very easy.
Spell-checking in textareas. No tpyos in this post!
So, no, it's not going to revolutionize browsing or anything. Since browsing technology has likely reached it's apex, all that's left are the small things.
--
the strongest word is still the word "free"
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!!!!!
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.
How much would it cost some rich OSS supporter to burn millions of Mozilla CDs and distribute them in the mail or the malls? Highlighting the pop-up blocking would be enough for many non-geeks to switch.
If Microsoft can pay $750M and get an advantage, maybe a player like IBM could help protect its investment in WebSphere, Java, Notes, and SameTime for 1/10 of that.
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.