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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
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Corel wins financial lifeline

Struggling Corel has obtained some equity financing from an anonymous institutional investor who clearly must have confidence that the share price will go up. Corel shares closed at US$3.6875 last night, which makes the potential funding worth some $54 million over 24 months if all 14,690,000 shares had been taken up at …
Graham Lea, 20 Sep 2000
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How the trial schedule is influencing MS' roadmaps

Analysis It's tricky to work out Microsoft's product strategy for dealing with possible judicial break up, particularly as the company claims it doesn't have one. But a close study of Bill Gates' speeches and TV appearance in Australia last week, supplemented by some other sources and some guess work gives us some clues. It is clear …
Graham Lea, 20 Sep 2000
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IDC: will Europe leapfrog US in e-business?

Analysis There's trouble brewing when American market researchers make pronouncements about the behaviour of Europan Internet markets without having any real appreciation of the cultural issues. There's still a great tendency for them to regard Europe as one market, when in reality multilingual countries like Belgium and Switzerland …
Graham Lea, 18 Sep 2000
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Compaq previews The Source portal – not many dead

Compaq previewed the business-to-business portal it's calling The Source at a side event during the IDC European Forum in Monaco this week. The demo suggested that the service will be offered as a kind of dumbed-down yellow pages without any choice of potential suppliers, and it soon became clear that the real purpose is to " …
Graham Lea, 15 Sep 2000

Novell marketing VP talks turkey in last chance saloon

Interview With Novell entering the last chance saloon, The Register spoke to Steve Adams, Novell's senior VP for Worldwide marketing, at the IDC meeting in Monaco. It's taken only a month from the announcement of a "realignment of expenses" (as staff reductions are euphemistically called) to the formal executions on Monday. Novell's …
Graham Lea, 15 Sep 2000
Broken CD with wrench

Despite brickbats, WAP will grow – IDC

The IDC European IT Forum in Monaco has been looking at whether the mobile commerce market will take off. Gigi Wang, SVP of IDC communications and Internet research, expected a 197 per cent compound annual growth rate in the WAP-enabled phone market - but this is from a low base. It is significant that Nokia has just decided …
Graham Lea, 12 Sep 2000
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MS could still be found guilty in Bristol antitrust case

Analysis US federal judge Janet Hall of the Connecticut District Court, who is presiding over the Bristol Technologies case against Microsoft, said in her Ruling last week (in which Bristol was awarded $1 million punitive damages against Microsoft) that "Microsoft could be exposed to civil and criminal penalties under other unfair and …
Graham Lea, 05 Sep 2000
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After Gaston, new L&H CEO focuses on nuts and bolts

Interview The acquisition of Dictaphone (completed in May) and Dragon (completed in June) has clearly resulted in a pressing need for L&H to consolidate and productise. It was also clear that a different style of management was required for this work, so Welsh-born ex-rugger player John Duerden (who took US citizenship a couple of years …
Graham Lea, 04 Sep 2000
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Urbane Bastiaens heads for L&H ambassador role

Interview Gaston Bastiaens, the human dynamo and former CEO/president of Lernout & Hauspie, appears to be far from upset at handing over the reins to John Duerden. It's rare for an ex-CEO to hang around and play an active role in supporting the company, but this seems to be what he is doing. He told The Register in an interview that "I …
Graham Lea, 04 Sep 2000
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L&H returns fire as the class actions roll in

Special Report The question to be resolved at speech and language specialist Lernout & Haupsie (L&H) is whether there is any funny business going on, particularly in its reporting of sales. The special mid-year audit of L&H's worldwide activities the company has called in the hope of silencing critics and reassuring shareholders will be able …
Graham Lea, 03 Sep 2000
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Supremes decline to sing on MS case

The Supreme Court has made it clear it's not in a particular hurry to decide whether it wishes to hear the Microsoft case, or whether it will send it to the court of appeals first. Yesterday, eight orders by the Supremes were made public: seven concerned refusals to hear death-sentence cases, which understandably have a higher …
Graham Lea, 29 Aug 2000
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Java is skill in most demand in UK, Windows down

Java appears to be the most sought after IT skill in the UK. The SSP/Computer Weekly Q2 survey of appointments data and trends, based on what employers were seeking in trade press and national newspaper ads, showed that C++ was still top. However, it was down 36 per cent compared with the year-earlier quarter while second-place …
Graham Lea, 29 Aug 2000
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Korean economy is the Comeback Kid

Korea has the misfortune to be best known for being the home of the Moonies and MASH, but neither Sun Myong Moon's Unification Church nor the American sitcom that glorifies a war that took place fifty years ago come close to illuminating the remarkable developments happening in Korea today. Less than three years ago, the street …
Graham Lea, 25 Aug 2000
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Bastiaens bails from L&H

Gaston Bastiaens has resigned from his post as CEO of translation software company Lernout & Hauspie. The move follows months of uncertainty over the success of his management style, according to Jo Lernout, co-founder and co-chairman of L&H. In a conference call just concluded, Lernout made it clear that Bastiaens' management …
Graham Lea, 25 Aug 2000
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MS asks again for Supremes not to hear its case

MS on Trial Microsoft had its last fling yesterday when it filed with the Supreme Court a reply brief to the DoJ filing last week. It doesn't add much, merely reiterating its belief that the Expediting Act gives the Supreme Court unqualified discretion not to hear a case. The Supremes of course would know this anyway. The DoJ has made it …
Graham Lea, 23 Aug 2000
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M$ Japan staff fail to declare stock option income

There must be gloom clouds over Microsoft Japan where, according to Japanese newspaper reports, some 150 Microsoft employees (out of around 1,000 in Japan) have failed to declare, or have incorrectly declared, some $65 million of stock option income over several years. It's going to be a pricey oversight, because the reports …
Graham Lea, 23 Aug 2000
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The Register dances the Tarantella

If there were an architect for the SCO deal with Caldera, it would be Mike Orr, president of Tarantella. The Register has been talking to him. It was his idea for SCO to visit Linux distributors last October, because "anything that increases the credibility of Unix would be good for SCO". Caldera responded warmly, and the …
Graham Lea, 22 Aug 2000
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DoJ rebuts MS brief, lobbies for Supreme Court hearing

In a very readable 30-page brief to the Supreme Court, the DoJ yesterday set out its reasons for the Microsoft case to be heard directly, and not by the court of appeals. The DoJ's brief, in response to Microsoft's brief three weeks ago. Microsoft meanwhile has been trying hard to get Judge Jackson's findings of fact set aside …
Graham Lea, 22 Aug 2000
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Corel's Cowpland quits

Michael Cowpland's announcement yesterday that he is resigning as chairman and CEO of Corel could be a shrewd move. Others will think his departure from the executive ranks long overdue. Corel has a financial crisis that resulted in a new round of layoffs recently, and the present strategy did not seem to be leading the company …
Graham Lea, 22 Aug 2000
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L&H goes on Korean offensive against WSJ

Lernout & Hauspie has appointed KPMG to conduct a mid-year audit into the company, in a response to an article in the Wall Street Journal last Tuesday (Aug 8,2000), which questioned the veracity of the company's published sales figures for Korea (WSJ has trouble with LearnHowtoSpeak Korean). CEO Gaston Bastiaens last night said …
Graham Lea, 22 Aug 2000
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The Reg visits Korea to assess L&H's sales

On the face of it, speech and language specialist Lernout & Haupsie's reported sales figures for Korea for recent quarters do look too good to be true. They had gone from a million dollars or so in the first two quarters of last year to $15 million in Q3, $46 million in Q4, with $58 million reported for Q1 this year. Those who …
Graham Lea, 22 Aug 2000
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The trouble with LearnHowTospeak Korean

Lernout & Hauspie (L&H) stock fell 19 per cent on Tuesday (Aug 8, 2000) following a Wall Street Journal article which questioned the veracity of sales figures claimed by the company's operation in Korea. With Q2 sales of $68 million for Q2, Korea contributes a very high proportion of revenues (44 per cent this quarter)booked by …
Graham Lea, 09 Aug 2000
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High prices, false steps help Windows lose to Linux in China

When Bill Gates was questioned about Chinese support for Linux during an interview with Red Herring recently, he claimed that "our fastest growing server business is in China", which was surprising. Gates was also extremely upset when the interviewer suggested that the Chinese liked Linux: "What the heck are you talking about? …
Graham Lea, 08 Aug 2000
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Cybersmears – another great Net tradition falls by wayside

Cybersmearing, otherwise known as online defamation, became a trickier pastime last week when a New Jersey state judge ruled that anonymous messages on Yahoo! Finance by three defendants constituted libel against Biomatrix, a bio-medical firm which previously employed two of the libellers. The next step will be the assessment …
Graham Lea, 07 Aug 2000
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MAPS under fire as Harris sues MS, AOL over spam block

Analysis At first glance, pollster Harris International's legal action against AOL, Microsoft's Hotmail and others seems heavy-handed. Harris had been blacklisted in the Mail Abuse Prevention System (MAPS) Realtime Blackhole List for spamming, but a dig behind the scenes shows there's much more to this one than the bare facts suggest. …
Graham Lea, 04 Aug 2000