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April 5, 2000
Law, Taxes, Money

Speculation on how Microsoft ruling will affect nonprofits may be premature

By Daniel Pearson

Opinions of people from all walks of life regarding the Microsoft ruling are flying across the country faster than a Pentium III with a cable connection can download an MP3.

While most private sector analysts seem to agree the implications of U.S. District Court Judge Thomas Penfield Jackson's ruling will not be known for years, those in the nonprofit world say it is much too soon to tell what effect, if any, the ruling will have on the philanthropic world.

"This is the first chapter in what will be a fairly long book," said Matthew Hamill, vice president of public policy for Independent Sector. "The nonprofit sector, like the rest of society, relies heavily on Microsoft products. What will happen to the pricing of those products and how long it takes to all shake out -- I think it's premature to speculate (how pricing) will affect nonprofits bottom line."

Microsoft stock took a bashing on the Dow Jones Monday, even before Judge Jackson's findings of fact had been made public. It continued to plummet Tuesday and by closing time had reached a low of $88.63 per share.

NASDAQ -- the technology stock index -- continued its plunge on Tuesday as well, and was down by more than 400 points by mid-afternoon, but rallied to finish down just 74.75 below Monday's close. CBS Marketwatch's Rebecca Lynn Eisenberg reported the NASDAQ crash doesn't seem to make much sense because the ruling was a surprise to no one.

"Perhaps (the) nosedive is somehow intended to communicate to Microsoft a message that it truly needs to hear: Give it up already!" Eisenberg wrote.

Leslie Lewis owns a small software development company in Newberg, Ore. called UpTime Technologies. Lewis said she thinks Microsoft Windows has actually helped the industry more than stifled it because a universal operating system makes software development easier in the long run.

"If we had to develop one program for several different operating systems, we would spend so much time on one project it would stunt our growth," she said. "So for that reason, I think Microsoft being forced to breakup would actually make things more difficult on the small guy."

Shawn King, the host of a pro-Macintosh Internet radio show, told Wired Magazine he doesn't advocate the breakup of Gates' empire because it would result in small companies dominating specific sectors of the market, much like the Baby Bells do in the telephone industry.

"My first inclination is to go 'Yipee,'" King told the magazine. "The bully of the schoolyard has been sent to the principal's office. I want the principal to look over their shoulder a bit more. To let them know there's an eye being kept on them."

And then there is the opinion of avid Microsoft opponent Phil Greenspun, CEO of ArsDigita. Greenspun thinks Gates' argument for Microsoft as an innovator makes no sense because "he's never contributed anything to technology in his life and has become so rich by making bad, copycat products."

"I would much rather see the government put resources into improving Linux so that it serves all their needs than (go) after Microsoft," Greenspun told Wired. "It wouldn't take that many resources to bring Linux and Star Office up to the point where people wouldn't need to use Microsoft products."

Donald Stewart, publisher of Employment News for the Social Sector, said the nonprofit world will likely notice no difference in their operating costs whether Microsoft is forced to break up or not, because the sector is lagging in technology usage anyway.

"Most of us in the nonprofit world are a little behind on that," Stewart said. "I'd say (the way nonprofits approach technology), it's more like 1995 than 2000. In theory, lower prices will spur competition, so by the end of this it should help everybody. But I really don't see Microsoft being broken up."

One piece of Gates' empire being overlooked by news organizations of every type is how Microsoft's stock crash will affect the Bill and Melinda Gates Foundation, which boasts the largest endowment in the world.

"They're endowment definitely bears watching," Hamill said. "Much of its assets are Microsoft stock."

Gates Foundation Media Director Trevor Neilson did not return telephone messages left by PNN on Tuesday, although his assistant confirmed he was in the office. And while the rest of the world continues to speculate on the Microsoft's future, the Gates Foundation is proceeding with plans to award a $57 million grant to help protect young people in four African countries -- Botswana, Uganda, Ghana and the United Republic of Tanzania -- against HIV/AIDS.

Daniel Pearson can be reached at
danielpearson@mindspring.com



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