[ale] Dan Gillmor on Microsoft

[Jim]

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Microsoft is reporting record profits from the last quarter, which they 
attribute largely to their new, extortionary licensing scheme. I thought 
htese words from Silicon Valley columnist Dan Gillmor were worth sharing with 
everybody on the list:

Microsoft Piggy Bank Tops $40 Billion
Posted by Dan Gillmor

What happens when a monopolist raises prices? One guess.

Microsoft hit the jackpot in the most recent quarter, ringing up a staggering 
$4 billion profit on sales of $7.7 billion. I hope reporters covering this 
story note some of the subtleties, including Microsoft's strategy of not 
counting some of the profits until later years and its continual accumulation 
of cash.

As of Sept. 30, Microsoft had gone over the $40 billion mark in cash and 
short-term investments (effectively the same). Think about that -- $40 
billion.

What is Microsoft going to do with this money? They can't spend it fast enough 
internally, and the top shareholders, who control the company, refuse to 
issue dividends (this saves Bill Gates et al billions in taxes). Prediction: 
Once Microsoft is out from under what's left of the antitrust case, it'll go 
on a strategic investment and acquisition spree the likes of which you cannot 
even imagine.

The monopoly continues, unabated, and could even grow stronger. Innovation is 
almost dead in desktop software, where Microsoft has sucked the financial 
oxygen out of the system. The company's behavior doesn't improve. It's no 
coincidence. Too bad we no longer have a government that's willing to enforce 
the antitrust laws, and technology buyers who feel so trapped they won't even 
consider alternatives. Life, circa 2002.

http://www.siliconvalley.com/mld/siliconvalley/business/columnists/dan_gillmor/ejournal/4307752.htm
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