New venue, old Þght

National | Microsoft fights back, Apple puts writable CDs on the front burner, and Web ads struggle to be noticed

Issue: "Bush's tax-cut plan," March 10, 2001

Microsoft isn't going to be broken up without a fight. That's the impression from the company's stance before a federal appeals court as it argued that the historic antitrust ruling against the software giant be overturned. With the courtroom open to cameras, the words were spirited. And aimed not just at the contending parties, but at federal judge Thomas Penfield Jackson, who ruled that Microsoft abused its monopoly over PC operating systems. Judge Jackson's colorful criticism of Microsoft in media interviews before and after the conclusion of the case drew the criticism of Chief Judge Harry Edwards. He questioned whether such remarks amounted to conduct that "violates the whole oath of office." In arguments last week, Judge Edwards asked a Microsoft lawyer whether his client had the right to squash rival Netscape: "Does antitrust law not contemplate that we protect nascent seedlings of competition?" "I think, clearly, the antitrust law protects them, but it doesn't protect them from competition," Microsoft attorney Richard Urowsky replied. "It does protect them from predatory conduct," Judge Edwards shot back, sounding much like Judge Jackson. Much of the case hinges on whether Bill Gates's empire illegally crushed Netscape by bundling its Internet Explorer with Windows. One sign of hope for Mr. Gates's side was that, unlike in Thomas Penfield Jackson's courtroom, the government's lawyers were hit as hard as Microsoft's. The newest, latest changes in the world of technology, however, have made the issues in the Microsoft case almost pass*. The high-tech industry is already moving away from PC-centric models. Today's visionaries look to a soon approaching world where all sorts of tiny gadgets are connected to one another via wired or wireless connections. Desktops and laptops won't be necessary in many instances; nor will the browsers that run on them-Explorer or Netscape. BURN OR BE BURNED
Apple needs to make another comeback. Co-founder Steve Jobs returned to the company in 1997 and it sparked up. But that was four years ago. Apple's devoted followers boast how their machines are more edgy than their Windows-based counterparts, but the company didn't include drives that read and write CDs in last year's computers. In the era of Napster that's not good. That goof was one reason the company lost money for the first time since Mr. Jobs's return. Small wonder that Apple sells its current line with the slogan "Power To Burn." Now iMacs and PowerMacs boast CD burners and software called iTunes, which allows users to copy MP3-format songs onto CDs. They aren't cheap. A Power Mac G4 Cube with those capabilities sells for $1,599. The G4 Cube itself is a perfect example of form over function. Inside the cutesy box is the same old Mac (but with a faster processor). Some observers wonder if Apple's real problem is that its core market replaced all their old Macs with iMacs that haven't worn out yet. Apple dates back into the 1970s and still has an image of creativity and expressiveness. Yet desktop computers are fast becoming old hat, leaving Apple to do for its set of components what Williams-Sonoma does for kitchenware. To survive, Apple must be a step ahead. FROM BANNERS TO BILLBOARDS
Bye bye, banner ads. Hello, big ads. A panel of marketers unveiled new guidelines for larger Internet ads designed to better hold the viewer's attention. Maybe they should be called billboard ads. The little rectangles that grace millions of Web pages are often chided as being easy to ignore and forget. So Web companies have searched for something better that won't drive away users. Many worry that online ads will never do well enough to keep major content sites alive-and subscription services are highly risky. So the Internet Advertising Bureau proposed seven new shapes and sizes. They include so-called "skyscrapers" that run vertically along the edge of computer screens, various rectangles, and a roughly three-inch square pop-up ad. No one knows if the new ads will be commonplace, but the IAB's constituency includes such powerhouses as AOL Time Warner and Yahoo! What online advertisers look for is click-through rate, which means that users click on the ad to see the sponsor's site. These numbers are plummeting from more than 4 percent of all Web users a few years ago to less than half a percent today. If advertisers can't get click-throughs, they won't buy ads, so the call for change is critical. It also means that users will eventually be as annoyed by online ads as TV watchers are by commercials. But business is business. Unless sites can deliver ads in a more punchy, attention-getting manner, many will disappear or shove their content behind the walls of subscription services.

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