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Graham Lea

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With friends like these… MS amici file their briefs

MS on Trial Microsoft has few firm friends, and the Amici Microsoftae who form a rather small pro-Microsoft faction have either a financial relationship with Microsoft or some rather offbeat ideological kink that compels them to side with Microsoft. This strange conglomeration is the source of the 'friends of court' briefs filed this week …
Graham Lea, 29 Nov 2000
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MS denies everything in Trial II bid

MS on Trial Microsoft's brief to the Court of Appeals yesterday has too many unconvincing dimples, and not enough real chad. Even if Microsoft were entirely innocent, it has not made a sufficient case in the light of the evidence, Judge Jackson's findings of fact, and his conclusions of law. The technical parts of Microsoft's brief will …
Graham Lea, 28 Nov 2000
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Software patents stay banned in Europe – for now

The campaign to stop the European Patent Office trying to legalise software patents has scored its first major victory. After some effective lobbying in several countries and despite Switzerland, Austria and Liechtenstein deciding not to vote, all the other countries voted to keep Article 52C (which bans software patents) in the …
Graham Lea, 22 Nov 2000
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Consumer friendly FTC may demand software works to spec

Analysis Consumers may soon get a better deal for packaged software, and be able to buy it instead of licensing it under onerous terms. Despite the strong lobbying efforts of US packaged software publishers, the US Federal Trading Commission (FTC) could well come out on the side of the consumer. The restrictions associated with software …
Graham Lea, 02 Nov 2000
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Patent lobby get in early for EU consultation process

Analysis The European Commission has launched its consultation on software patents, but the accompanying "independent study" produced on behalf of the Intellectual Property Institute (IPI) in London is biased in favour of the patents establishment, as well as being ill-informed about the potential consequences for Europe. The EU will be …
Graham Lea, 29 Oct 2000
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Inside the MS trial part 1: how they brought Gates to tears

Bill Gates broke down and cried at a Microsoft board meeting on 24 January 1999, after delivering "an extended and emotional tirade" against the DoJ, Judge Jackson, and the circumstances that had befallen the company. So says John Heilemann in a 52-page article in the November issue of Wired, entitled "The truth, the whole truth …
Graham Lea, 25 Oct 2000
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Inside the MS trial part 2: the Keystone Cops go into action

The fast move into the trial phase presented the DoJ with a problem; it had expected at least a year before trial, and had no witnesses lined up. Reback told Heilemann after a meeting with Klein: "If I were Joel [Klein], I'd have been pissing my pants right then." Nobody wanted to testify, for fear of retribution. The first …
Graham Lea, 25 Oct 2000
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Growth may be slowing, but MS magic kicks stock into life

Analysis There were some curious inconsistencies in the presentation of Microsoft's Q1 results this week. The income statement showed Q1 2001 income of $2.206 billion compared with $2.191 billion a year earlier - a very modest increase of just $15 million, or less than one per cent. But the press release claimed an 18 per cent increase …
Graham Lea, 20 Oct 2000
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How ‘cybersmear’ lawsuits can block free speech

Analysis The right to anonymity on Internet bulletin boards is under threat again. A recent decision by the Florida Third District Court of Appeals ducked hearing an appeal against a lower court order that those who posted on web sites could have their names disclosed by their ISPs, even though the case had not been tried. This means …
Graham Lea, 20 Oct 2000
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IT giants who don't pay tax part 1: how Cisco does it

Analysis Cisco is "a modern house of cards, in which the cards are Cisco's stock and the companies acquired for Cisco stock" according to Barrons. Part of the problem is that Cisco is not employing astute financial engineering techniques, so it has been increasing its exposure with little or no appreciation of the potential downsides. …
Graham Lea, 16 Oct 2000
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IT giants who don't pay tax part 2: how Microsoft does it

Analysis Microsoft makes much more money from dealing in stock options than from Windows, and as a result paid no tax in fiscal 2000. It's not the picture you'd expect, and it's not exactly easy to get the real picture either - but it's all perfectly legal, really. In effect, Microsoft has three sets of accounts: the ones its auditors …
Graham Lea, 16 Oct 2000
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How old chums cobbled up the MS Corel deal

Analysis There are several theories as to why Microsoft did a deal with Corel, but neither a Linux-based liaison nor assuaging antitrust concerns stand up to serious examination. On the antitrust front, Microsoft is probably more concerned about its PR image vis-a-vis the punters than the court of appeals. There are some clues about the …
Graham Lea, 14 Oct 2000
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Gates' stake in MS – 14 per cent and falling

According to Microsoft's proxy statement, as of 8 September Bill Gates' had only 13.7 per cent of Microsoft's shares (worth $43.9 billion at $60), and Steve Ballmer 4.5 per cent (worth $14.4 billion). The 31 executive officers and directors as a group control 18.8 per cent of the company. Mrs Gates has $12.9 million in shares in …
Graham Lea, 14 Oct 2000
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MS bids to stretch appeal to mid-2001, documentation to moon

MS on Trial "The scope of this case is monumental," Microsoft claimed while asking the court of appeals for a slow-track appeal process over five months. It also wants its principal brief to be 56,000 words - four times longer than is normally allowed - and for its reply brief to be 28,000 words, which is twice the normal length. Microsoft …
Graham Lea, 14 Oct 2000
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DoJ filing points to MS lawyers in slow motion

MS on Trial In its early filing in response to Microsoft's proposed timetable for the appeal, the DoJ has exposed some of the ways in which Microsoft is trying to cause delays. The DoJ argues that Microsoft's proposals for "massive pleadings" and an "extended briefing schedule" will not allow the appeal to be resolved quickly. But the DoJ …
Graham Lea, 14 Oct 2000
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MS breakup to cost $147bn, $507 a head, say crazies

"Anyone owning shares of Microsoft has become all-too-well aware of what happens when the risk associated with an investment suddenly increases. Until this year, Microsoft was one of the best stocks to own..." All very true of course, but it is hard to feel sorry for punters - apparently including the authors of a report …
Graham Lea, 14 Oct 2000
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MS insists on long appeal, blames DoJ for delays

Microsoft is adamant that it wants to file long briefs and have five months for its appeal. But it did decide to accept the DoJ's challenge and file its scheduling reply in two days, rather than by 10 October as it was entitled to do. Microsoft says that "if there is no threat of irreparable harm - and none has been shown" then …
Graham Lea, 14 Oct 2000
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Smoke, mirrors and accounting: MS breakup just got harder

Analysis Microsoft's juggling of its accounting practices last week might have been made under cover of legal necessity but there are a couple of upsides from the company's point of view as well. The reporting format it's gone for makes it trickier to implement Judge Jackson's judgement, temporarily set aside, that the company should be …
Graham Lea, 14 Oct 2000
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Software patents: will Europe roll over for the multinationals?

Analysis Software patents could become the kiss-of-death for many software developers, because it is becoming impossible to write a program without a serious risk of falling foul of some patent - frequently, an undeserved and opportunist one. The threat is also grave for many smaller businesses in Europe. They could easily be threatened …
Graham Lea, 12 Oct 2000
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Accounting masterclass: how Cisco and MS avoid tax

Analysis The financial reporting practices of industry titans like Cisco and Microsoft are coming under increased scrutiny. They're big, they're apparently highly profitable, but neither company paid federal income taxes for their most recent financial year. It's all legal, but the accounting approach they're using hovers on the edge of …
Graham Lea, 09 Oct 2000
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US Euro rescue shores up Intel, US PC vendors

According to an unnamed German Finance Ministry official quoted by the WSJ, it Intel's profit warning on Thursday - which resulted in a general sharp intake of stock - may have been the catalyst that finalised the US decision to support the Euro on Friday. But exploratory talks had started earlier in the week between the …
Graham Lea, 25 Sep 2000
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L&H subpoeanead by SEC

Speech and language specialist Lernout & Hauspie has been subpoeanaed by the SEC because the agency wishes to investigate its previous years' accounts. Such an action is more serious than a previous action by the SEC concerning how research in progress was accounted for - a move that the SEC also made against a considerable …
Graham Lea, 22 Sep 2000

Can Bill Gates broadband satellite bet beat re-entry burnout?

Analysis Thanks to more than a thousand pages of regulatory filing with the SEC, we now know the business plan for broadband satellite ventures Teledesic and New ICO. The companies are to be merged later this year as a result of a rescue bid by Craig McCaw London-based ICO Global Communications. McCaw injected $1.2 billion into the …
Graham Lea, 22 Sep 2000
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T-Online's boardroom battles

There's management disagreement at T-Online, the German Internet service provider that is 83 per cent owned by Deutsche Telekom. It seems that the focus of the row is over management interference by DT CEO Ron Sommer about the desire by T-Online to expand in Europe. Two T-Online board members have resigned in the last month, " …
Graham Lea, 21 Sep 2000
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Tax breaks to US companies: trade war looms?

A major trade war may be looming between the US and the European Union over billions of dollars of tax breaks for exports by major US companies like Microsoft and Intel. Yesterday the US Senate Finance Committee gave the nod to proposed new legislation that would transform the vexed Foreign Sales Corporation export tax break …
Graham Lea, 20 Sep 2000