What to do When the Feds Come Knocking

I remember when times were simpler and the Federal government was a lot smaller. Back in the early 1990’s I was at the Comdex computer show in Las Vegas when it was the World’s largest convention. I attended the keynote speech by Microsoft Chairman Bill Gates at the old Aladdin Hotel (Since demolished, replaced, and then renamed as Planet Hollywood). I was sitting in the front row, no more than 15 feet from the enigmatic Mr. Gates, when he spoke of the future of computing. He did not discuss the internet or any other technology that blesses us today. I think he talked about that little dancing paper-clip widget in the upcoming version of Microsoft Office.

Back in those days, Microsoft was the largest software company and Bill Gates was the richest person in the World. Mr. Gates didn’t feel the need to spend money on lobbyists in Washington even though his company dominated the operating system business. Then along came United States v. Microsoft in 1998. The Federal government accused Microsoft of monopolizing the internet browser arena to the exclusion of competitors by including the Internet Explorer browser free of charge as part of its Windows operating system. The government lost its case to break-up Microsoft on appeal and eventually a settlement was made.  The company agreed to allow access to its “application programming interfaces” by competing developers. To this day, Internet Explorer is bundled with the Windows operating system.

Stills from videotape of Bill Gates' depositio...

Stills from videotape of Bill Gates’ deposition at 1998 United States v. Microsoft trial. (Photo credit: Wikipedia)

Fast forward to Today when the news broke that Google Chrome has surpassed Internet Explorer as the World’s most used browser. Microsoft is becoming less of a force in the computer marketplace while Google is looking to dominate the internet through its browser and Android operating system.

Google learned from the Federal interference of Microsoft that you have to pay in order to protect yourself. Google spent $5.9 million on Washington lobbying in the first three-quarters last year when they found themselves under scrutiny by the Federal Trade Commission.

While Microsoft is still larger in market value than Google ($250b versus $200b), the new leader in web browsing is the dominant player in the smartphone software industry. Google’s Android software has a 56% market share compared to Microsoft’s measly 1.9%. Apple iOS for the iPhone comes in at 23%. Google is moving aggressively to develop Google Drive as a web-based alternative to Microsoft Office. If Drive can be successfully ported into the business arena, it will be game over for Microsoft Office.

 

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