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Most observers feel that DOJ’s new stance will probably result in a settlement in the near future, but sticky issues surrounding various aspects of Microsoft’s slate of new initiatives—notably its brand-new operating system XP—remain.
MICROSOFT KEEPS BARBARIANS FROM GATES
Despite Mixed Spin on DOJ’s Revised Position, Tech Giant Is Poised to Be A Huge Player In Entertainment World
Press estimations about what the Department of Justice’s decision not to pursue a breakup of Microsoft means—and whether or not DOJ’s expressed intention to examine the undivided titan’s "conduct" could actually be worse for Redmond than a forced split—have been predictably varied.

Justice has announced its intention to ask the U.S. District Court for "a period of expedited discovery" to evaluate the market and Microsoft’s place in it following the trial presided over by the firm’s arch-nemesis, Judge Thomas Penfield Jackson. Most observers feel that DOJ’s new stance will probably result in a settlement in the near future, but sticky issues surrounding various aspects of Microsoft’s slate of new initiatives—notably its brand-new operating system XP—remain.

Still, it seems clear for the present that Mssrs. Gates, Ballmer et al. enjoy a much stronger position as they prepare to launch XP (and a score of other new initiatives) than could have been imagined during Jackson’s reign.

Though such a scenario seemed unthinkable during the Clinton era, it is Jackson who stands nearly disgraced, with some commentators even calling on him to step down because of the punitive zeal with which he pursued the software behemoth. Microsoft, meanwhile, though it still faces suspicion about its ostensibly monopolistic designs on the tech world, is already in the process of making itself indispensable in the sphere of digital entertainment.

Though XP will face scrutiny on a lot of the same grounds as the browser-bundling imbroglio of years past, it’s already getting some pretty strong advance buzz. Meanwhile, audio and video codec Windows Media is gaining a remarkable foothold in both B2B and consumer applications (despite the ongoing ubiquity of rival RealNetworks’ products) by combining high-quality encoding and playback with anti-piracy features beloved by rights holders. Then there’s their entire xBox gaming gambit, an array of tools for managing content among the Web, PC and portable devices, and much, much more.

Indeed, in macro terms, MS has moved with dizzying speed to not only meet but anticipate the needs of content providers. By developing sophisticated and accessible means to distribute content and protect it from piracy, Redmond is uniquely positioned to hold the biz by the hand through this difficult transitional period. Meanwhile, an array of media-management tools are offered on a B2B basis to expedite the development and approval of content before its release.

Though its foes will continue to hammer away—and raise a multitude of valid antitrust issues, though in an era (and under a government) with little sensitivity to issues of competition—Redmond is undeniably situated to be ubiquitous itself.

Microsoft stands prepared to mediate between production facility and distribution, between streaming company and receiver (with a proprietary codec and protocol), as copyright guardian between content provider and consumer (and between end user and offline device), between desktop and set-top. No wonder both Bill Gates and Steve Ballmer made it into the Top Five of Vanity Fair’s "Top 50 Leaders of the Information Age."

Of course, the company’s future trials and tribulations depend on what action the DOJ and U.S. District Judge Colleen Kollar-Kotelly are inclined to pursue. Microsoft’s generous contributions to the Bush administration, which never met a monopoly it didn’t like and is inclined to dismantle the antitrust actions of its Democratic predecessors, are well documented.

That’s not to say the company is out of the woods just yet, however. As ZDNet’s David Coursey noted, the DOJ’s announced course of action "takes the unreasonable [breakup] off the table and lets the feds concentrate on issues they could win. It also makes a settlement more likely by giving up the deal-killer for Microsoft." Coursey added that Justice’s new agenda could mean swifter "justice," if that is indeed the result, for Gates and company.

But even if "conduct-related" remedies force Microsoft to accommodate competitors in certain of its initiatives, it doesn’t sound terribly realistic to expect the company’s profile to diminish as new media insinuate themselves into consumers’ daily lives.

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