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Invent like Microsoft

© June 2006 Anthony Lawrence

I had to take my car down for service this morning: oil change, slow leak in a tire, nothing major. The place I go to is a small local shop; so small that the owner himself drives me back to my house.

This guy used to have a shop in Boston but always lived down here. Commuting to Boston is a 40 mile trip one way, so it's not hard to understand why he moved the business closer to home. Unfortunately there's not as much business available, so every time I see him he mentions that he isn't doing as well as he would like. I don't mean to paint him as a whiner or complainer: we're both small self-employed people, so we're really just talking shop a bit on the drive.

Anyway, this morning I had asked if things had gotten any better, and he shrugged and said "Not much" and then added "I guess I need to invent something like Bill Gates did"

Of course I laughed. I'm used to this: most of the world thinks Microsoft invented all sorts of things. The reality is more than a bit different, but people don't know these things. So I educated him a little bit about Microsoft's history and general business practices.

I don't know why he mentioned Internet Explorer. I couldn't remember the exact details, but I knew you could look it up on Wikipedia, so I did when I got home. I stumbled around a bit before I could find what I was looking for, but here it is: The Browser Wars tells the story of how Microsoft wanted to license Spyglass's Mosaic browser for use in IE 1.0. Apparently Spyglass didn't like the terms being offered, so Microsoft sweetened the pot: while they were only offering a small quarterly licensing fee, they additionally offered Spyglass a percentage royalty for every copy of IE sold.

We can only imagine the thrill Spyglass owners must have felt. Heck, even if the percentage amounted to pennies per copy, there'd be a ton of money wafting their way. I bet their hands trembled as they signed the contracts.

Ahh, a grand moment. Which then immediately turned sour when Microsoft bundled IE into the OS, which made the selling price exactly zero. As we all learned in early math classes, any percentage of zero puts nothing in your pocket. So the happy boys at Microsoft were paying only the low quarterly licensing fee and nothing more.

Spyglass eventually sued, and Microsoft ended up paying them the paltry sum of $8 million, which is pretty disgusting no matter how you look at it. But that's a lot more than was had by some other folks who walked by Microsoft's hungry jaws with tasty technology in their hands, so I suppose they were at least glad to get something.

This bit of history also explains another reason why Microsft was so adamant that IE *had* to be bundled with the OS back when the Justice Department was chasing them. Of course it had to be bundled: they'd owe a lot of money if it were not.

The shop owner just called. I need rear calipers, around $400.00 worth. My loss, his gain. Maybe I should offer him a percentage payment based on how many times I listen to AM radio while driving, or something equally constructed to give net zero payouts. After all, that is the kind of thing Microsoft is good at "inventing". Maybe I should try it.

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More Articles by © Anthony Lawrence

Wed May 4 11:52:23 2011: 9480   TonyLawrence


I told this story to someone last night. He said "Smart guy, Bill Gates".

He actually ADMIRED Microsoft for fooling this other company!

Amazing world, isn't it?


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