Microsoft Wins Battle with the Feds: WSJ.  The feds reached a tentative agreement with Microsoft that leaves Microsoft's products unchanged.  States may opt to go it alone due to a “wimpy” settlement.  Here is what the government is focusing on:

“Microsoft will agree not to retaliate, or threaten to retaliate” against any software or hardware maker supporting non-Microsoft software such as audio-video players, instant-messaging software, Internet browsers or Java programming language, the settlement offer says. It also would ban forced upgrades of Windows — requiring the company to continue selling old versions for a period of time — and would be in force for four years, Microsoft proposed.”

Unfortunately, the reason the Justice department is focusing on this is that the big PC companies are from TX (combine this with what Paul Krugman is uncovering and the picture is unsettling).

The reason this focus will fail is because Microsoft is moving to a subscription model with direct interactions with consumers.  It will begin to sell upgrades and modify its product through direct consumer interaction making it much less reliant on the initial install of PC makers.  It doesn't really care what PC firms do anymore.  Additionally, Microsoft plans to enter the home PC market by 2003 with its ultrasecret “home server” which will put it into direct competition with PC firms Compaq and Dell.  This is another example of Microsoft outwitting the government. [John Robb's Radio Weblog]

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