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WHY BLOCK MICROSOFT JUDGE FAILED TO CONSIDER RISK SOFTWARE GIANT FACES

By Published on .

The only person who can stop Microsoft Corp. is Bill Gates.Just give him time.

Microsoft's chairman is embarking on such ambitious plans for new products and services that the software giant is almost sure to stumble.

That creates obstacles for Microsoft and opportunities for competition.

U.S. District Judge Stanley Sporkin, in halting the Justice Department's antitrust settlement with Microsoft last week, seemed to see the marketer on some one-way track to world domination that only government intervention could halt.

But the judge looked too much at Microsoft's successful past and not enough at its riskier future.

Competing against focused companies in numerous markets, Microsoft is intent on getting everywhere and everything. Mr. Gates does not have special dispensation to run away with all markets, and rivals will get to take their shot. It's no sure bet Microsoft will win when it competes with savvy consumer marketers like AT&T, an emerging online services force, and up-and-comers like software seller Oracle Corp., an interactive TV threat.

The Justice Department and Microsoft executives have stepped up their attack on Judge Sporkin's ruling. Yet some observers also expect Microsoft to ease its hotly aggressive business practices to show it can be a good citizen.

Even if Microsoft charges ahead, the next year could prove a rough ride for the software giant because of the inherent problems in introducing new products.

Windows 95, due in August, will inevitably have flaws common in new operating systems that could send disappointed customers into the open arms of an already proven rival, IBM Corp.'s OS/2.

Not everyone thinks companies like IBM can pick up the slack.

Jerry Michalski, managing editor of computer newsletter Release 1.0, questions whether rivals will be able to fill any void even if Microsoft hiccups. "There are many, many opportunities for Microsoft to stumble here, but what's made Microsoft successful is their ability to paste and patch bad problems with their software."

Added Jesse Berst, editorial director of Windows Watcher: "Microsoft has unbeatable leverage the way it stands now."

Even when Microsoft loses, it can win. If Microsoft were to fail miserably with its new Windows 95 operating system and Microsoft Network online service, it still would have the world's best seller, the Windows 3.1 software.

But those who don't think there can be competition in Microsoft's markets should stay tuned.

Microsoft, like Pentium chip marketer Intel Corp., gets so much attention in popular media because of its financial power and stepped-up consumer advertising that any bugs in Windows 95 probably will be magnified in the headlines and on the Internet. Microsoft also is in the midst of an unprecedented $100 million software ad campaign from Wieden & Kennedy, Portland, Ore.

True, OS/2 is backed by the faltering IBM Personal Computer Co., while the world's hottest PC marketer, Compaq Computer Corp., last week said it would shift to Windows 95 as soon as possible. But Windows 95 still must prove itself.

Rivals also could chip at Microsoft's dominant position in software applications. Because Windows 95 is running late, makers of word processors and spreadsheets like Novell and Lotus Development Corp. are getting extra development time.

A bigger question revolves around Microsoft Network. Many observers believe Microsoft will have an unfair advantage because the online service will be built into Windows 95.

The reality probably is Microsoft's easy access will be less important if its product is flawed.

Microsoft already has changed its online rollout. Instead of starting all at once in 35 nations, it will begin in the U.S. and phase in the system elsewhere, executives familiar with the launch say.

There have been reports of glitches in making Microsoft Network work with some international phone systems. And home PCs and modems are scarce in regions like Europe, another potential obstacle.

Mr. Gates has so many balls in the air that he could drop one at any time. Much to the surprise of Judge Sporkin, there probably would be a competitor ready to catch it and run.

"Why," asked an antitrust attorney who supports Microsoft, "would anybody want to stop Bill Gates?"

Debra Aho Williamson and Laurel Wentz contributed to this story.

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