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MIXED WEEK FOR MICROSOFT

Brian Grainger

It has been a week of mixed fortunes for Microsoft. It has lost two battles in the courts, but seems to increase its profits whatever happens.

The first court loss was in California, where it has been judged that Microsoft overcharged for Windows and Office. Microsoft originally proposed to provide software to Californian schools free of charge, but this was thrown out after it was deemed to increase Microsoft's monopoly. The latest proposal is that Microsoft issues vouchers to those buyers who were overcharged, to be redeemed against hardware or software from Microsoft or other suppliers. Buyers have 4 months to claim the vouchers and up to 4 years to redeem them. The value of any unclaimed vouchers will be split two thirds in software and cash grants to Californian Schools and one third retained by Microsoft. Should everyone claim their vouchers it will cost Microsoft $1.1 billion. However, this may only be the tip of the iceberg. 16 other States have similar court actions outstanding.

Late in the week, the latest battle with Sun Microsystems was lost by Microsoft. Microsoft has 4 months from settlement to start shipping Sun's version of the Java Virtual Machine with its Windows operating system. At the moment I do not know if this is instead of Microsoft's own version or whether Microsoft will be able to provide its own version as well.

Outside of the courts, Microsoft continues to profit. In the second quarter profits increased to $2.5 billion. This contrasts with Sun, who recorded its biggest ever quarterly loss in the last three months of 2002.

Microsoft has also confirmed that it will pay its first ever dividend to shareholders. The dividend of 16 cents a share may not be great, but at least it is a start at sharing out some of its cash!

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