PC Users To Keep Microsoft Rolling Antitrust Action Is No Great Boon To Rivals

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Microsoft Corp.'s marketing mayhem machine, scarcely slowed by a slap on the wrist from Bill Clinton's trust busters, will continue to grind up software rivals.

Although the antitrust action makes it likely more PC marketers will offer alternatives to Microsoft's Windows and MS-DOS software, most PC buyers are expected to stick with Microsoft's proven standard. "Users don't care" about the federal action, said Computerworld Publisher Gary Beach. "It's the biggest non-event for users out there."

After a yearlong investigation by the Department of Justice, Microsoft agreed to revise sales practices for operating system software to PC marketers. Without admitting any wrongdoing, Microsoft said it would revise software licensing agreements, not tie sales of operating systems and applications software like word processors, and take other steps that regulators said would open up the market.

The action forces Microsoft to end an unusual practice, in place since 1988, in which PC marketers paid royalties based on the number of PCs they sold-even if some PCs used rival software like IBM Corp.'s OS/2 instead of Microsoft's.

Some major PC marketers, including Dell Computer Corp., already let customers pick between Windows and OS/2. But industry leader Compaq Computer Corp. is sticking with Microsoft.

"Our customers are requesting Microsoft," a Compaq spokeswoman said. "That's why it makes sense for us."

Computer publishing executives hope for an ad boost as IBM, Novell and other secondary suppliers of operating systems make a pitch and Microsoft defends its leadership.

"There will be some amount of [increased] advertising," said PC World President Pat Kenealy.

An IBM spokesman said the company would make the OS/2 case to PC suppliers, but he couldn't say whether that would include more advertising. Novell also said it was too soon to look at marketing changes.

IBM advertising is in flux as new agency Ogilvy & Mather Worldwide comes on board. O&M had to resign Microsoft, which is searching for a product agency. Microsoft said it has no plans for ads tied to the consent decree.

The antitrust action may prove moot because the market settled on Microsoft long ago. Since 1988, the Justice Department noted, Microsoft's share of the operating system software market has not dropped below 70%.

Insisting they had done no wrong, Microsoft executives said they won't change marketing. "We worked very, very hard to avoid [having] this investigation affecting our marketing or how we do business," said Jonathan D. Lazarus, VP-strategic relations. "I don't expect it to change in any way."

The resolution came at a propitious time: Microsoft is free to forge ahead with its next big marketing challenge, the introduction late this year of "Chicago," a new version of Windows.

Steven W. Colford contributed to this story.

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