Microsoft Monopoly And Pricing

As I understand US anti-trust law, after a company reaches a certain amount of market dominance, they're supposed to play more fairly, rather than continuing to try and wipeout everyone else. AcompanyIsProsecutedForBeingAmonopoly when it fails to do that. A company with 99% of the market, which tried desperately to foster competition(without going tothe extent of making a broken product) would not be tried. Microsoft probably wouldn't have actually been prosecuted, except that they took on a company with no apparent revenue stream which happens to be very influential and visible on the internet. (Basiclly, this little toy dog walked up to Bill, and he kicked it. Puppy kicking isn't a nationally sanctioned pasttime here.)

There's also the aspect that Microsoft has purportedly been engaged in bribery, falseadvertising, and other illegal acts, which, while rarely prosecuted, are less tolerated by society when it's a big bully doing them.

Do I agree with the Department of Justice? No. They're already too late, Microsoft is dead in the software industry. Like the dinosaur it is, it hasn't figured that out yet (but it knows it's hurt and it's scared.) The DoJ investigation is only assisting that fall. If it hadtruely cared, it would have acted in time to save Microsoft.Because it didn't, a lot of companies are going to be seriously hurting. Just my 2x10^-5 cents worth. --EdGrimm

Microsoft is dead in the software industry? What color is the sky on your planet?

IsThePcDead?

Just being a monopoly is not illegal, and there isn't really a requirement that you ?be more fair? once you become a monopoly. What is illegal is using your monopoly power to stifle competition. If you have a monopoly on widgets, you can't try to corner the sprocket market by, e.g., refusing to sell your widgets to anyone who won't also buy your sprockets.

Microsoft, the DoJ, Netscape and Sun - the drama continues:

http://www.mercurycenter.com/svtech/companies/watch/microsoft/index.shtml

http://oss.software.ibm.com/developerworks/opensource/jikes/project/coreteam/shields/nylug.html

Consider the series:

370, 390, 500, 700, 860, 29000

which consists of the following amounts in dollars,:

Cost of Microsoft Office 2000 Premium Edition (1999) 
Per Capita GNP (1997) for China, Ghana, India, Pakistan, United States

listed in increasing order (Sources: pcconnection.com, NY Times 2000 Almanac).

Identify the amounts:

370 (Ghana), 390 (India), 500 (Pakistan), 700 (MS Office), 860 (China), 29000 (US)

Questions:

Today in richestcountry in world, people ask: How do I make money with open source?
Most others will soon be asking: How do I make binaries with very little money?

Answers: (1) IPO; (2) Download open source and type ?./configure;make?.

MS/China ratio about 7/9. What if MS Office cost $23,000/copy in the US?

This question is a prelude to a StrawMan argument. The vast majority of the cost behind software is labour. Thus, because the US has a higher labour cost than other countries, software made in the States should have a higher cost. Moreover, the per capita GNP means very little to anyone in reality because you don't distribute wealth equally in a capitalistic society. The engineers working at MS make more than $23 000/a per person. Or are you advocating BackDoorProtectionism? -- SunirShah

It would be a mistake to think that the price of Microsoft Office bears the slightest relationship to what it costs to write it, wherever the code may be written.

Of course. That wouldn't make sense in a capitalist society. What economic system do you want to live in? -- SunirShah, a believer in SocialCapitalism

I agree with you, but if that is what you think, why did you write Thus, because the US has a higher labour cost than other countries, software made in the States should have a higher cost. For both our points of view, it should be irrelevant to what Microsoft might charge for Office. --MatthewWilbert

Three points: First, it does cost a boatload to make Office. Second, Office subsidizes other profitless products like MS Chat. It would be a mistake to suggest Microsoft keeps their revenue streams compartmentalized; they aim for holism. (or couldn't you tell from all the so called ?tying??) Third, there are further subtleties. If Office was $23 000, it would only be economical to buy it if we were making $2 000 000. There has to be a return on investment significant enough to justify buying it. Since Office only contributes x to our revenue stream, it is worth x/10. Microsoft cannot charge, even if they are a monopoly, more than we would pay. -- SunirShah

Could you explain what these last points have to do with the statement which I questioned. You appeared to agree that the price of Office is not related to the costs of programming in the US, and to claim that there is a relationship--I don't understand how these new points reconcile what appear to me to be your two positions. Maybe I am misunderstanding your intent. --MatthewWilbert

Whoops, sorry. The second two points don't really have anything to do with your statement, I just realized I neglected to mention them earlier. I also made a mistake suggesting the the price of Office is totally unrelated to its labour costs, which is false. It has to cover at least the cost of making Office (plus a few other products too), which includes the cost of labour, publishing, advertising. I have a feeling the implication here is that Office costs less than $100 a copy to make; I think it costs a couple hundred at least, if not more. We'll never know, of course. -- SunirShah

Microsoft Financial Highlights: http://www-cs-students.stanford.edu/~kkoster/microsoft/financial.html This is seriously out of date. Microsoft has long since surpassed GE as the largest company by market cap, and recently temporarily exceeded half a trillion dollars in valuation. Ever since the finding against MicroSoft, their valuation has dropped. Market cap for them is now about $390M and falling...

What does the relative cost of labor in various markets have to do with anything? Office, even in its international versions, is produced mostly with American labor. The fact that it's being sold in Pakistan doesn't mean that Microsoft only has to pay Pakistani rates for that labor.

On top of that (I don't own Office, nor shall), why should I subsidize a productthat Microsoft is using to build a foundation for their"we are the only network of the world" tact? HergerThomann

This point is not specifically about MS, but about all companies, of any size whatever,with expansionist aims. Every time you eat at McD you are not only buying a burger you are subsidising their world expansion dreams. Ditto Nike, Nestle, etc. But it does not even stop with the multinationals: in fact many smallcompanies want togrow big, and company law even pushes managers in that direction. Part of the ethos of capitalism is that you use the profit from one round to do even better in the next. You either believe it is nice or you believe it is nasty, but the "it" refers to Capitalism not just to one company.