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MS denies it's buying users with its billions

But the company is quite clearly worried that the authorities are going act on the matter

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In an analysts' conference call on Friday Microsoft CFO Greg Maffei denied that the company's current spending spree was intended to buy customers for Microsoft standards. The splurge count now stands somewhere in the region of $15 billion (we haven't added in any of Greg's weekend shopping yet), but it would seem that the loud sound of minds changing about platforms many of the happy winners are currently emitting is entirely coincidental. Microsoft has been splattering dollars all over the broadband, wireless and cable markets, and in most cases the deals have been presented in the form of alliances intended to accelerate the uptake of... etc. etc. Microsoft alliances to accelerate uptake always involve the use of Microsoft platforms by the new ally. So in the case of one of the smaller ones, Nextel, the ally buys into the Microsoft vision for wireless data and its earlier commitment to Netscape's Netcenter gets quietly dumped. The deal with AT&T meanwhile coincidentally increased that company's CE commitment from 5 million units to 7.5-10 million. And in the past couple of days Cable & Wireless, confirming that it is in talks with Microsoft, has started to move away from its commitment to NCI. A previously done deal is once again up for grabs. So Greg's full of crap, right? Well, yes and no. If anything, he's full of Microcrap. He confirmed on Friday that Microsoft is targeting cable, broadband, wireless and telecoms infrastructure investments, and that it is building strategic partnerships. Microsoft could therefore be kidding itself that its primary objective is to get broadband, pervasive, total data communications to take off faster. As this happens, then obviously Microsoft will benefit from vastly increased sales. This is of course an investment script that's been pinched from Intel. But the difference is that when Intel invests to get things to take off, there's always a pretty obvious sales increase for Intel associated (without any serious strong-arming, if you'll pardon the expression), while faster take-off for broadband et al is quite likely to help a stack of other outfits rather than Microsoft. Until the spending spree, Microsoft really wasn't doing very well in these new platform areas. Another, associated difference is that Microsoft is institutionally incapable of conceiving of a situation where it enters a strategic alliance to further something and that doesn't automatically mean Microsoft sells stacks more stuff. Microsoft by definition believes that its platforms will dominate wherever it puts them. So you could look at the associated platform commitments in one of two ways. There's the brutal one, which goes 'I'll give you $5 billion if you promise to buy 5 million of these,' and there's the less brutal one, which from a Microsoft perspective says that an ally who doesn't believe CE and Windows are going to win has several screws loose, and therefore probably oughtn't to be an ally. We're not going to pursue this crazed nonsense any further right now - too much Microsoftthink and you need to go lie down. But as is frequently the case, Microsoftthink doesn't play terribly well outside Redmond. Maffei held that conference call because Microsoft needs to respond to the widespread (and entirely unsurprising, outside Redmond) conviction that MS is blowing billions on buying franchises. The US authorities haven't reacted to this, yet, and nor have the European ones, yet. But as Microsoft buys more (which it will), then one or both undoubtedly will. And we'll be off again, on the next major clash. ®

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