BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

The BBC's Patrick O'Connell
"PC makers will be able now to remove the web browser Internet Explorer from the screen"
 real 56k

Thursday, 12 July, 2001, 00:44 GMT 01:44 UK
Microsoft in Windows climbdown
Microsoft break up
The software giant Microsoft has said it will revamp its next-generation Windows operating system to make it easier for rival companies' products to compete.

The move follows a recent US Court of Appeals ruling that Microsoft agreements with computer manufacturers had broken competition law - but it was not a court-ordered remedy.

We recognise that some provisions in our existing Windows licences have been ruled improper

It is being seen as an attempt to head off such action.

However, some analysts say many Microsoft products have already achieved such dominance that Wednesday's announcement will have little practical effect.

The decision should mark an end to the practice of requiring computer manufacturers to display Microsoft products such as Internet Explorer on the desktops of new computers.

"We recognise that some provisions in our existing Windows licences have been ruled improper by the court," Microsoft said in a written statement. "So we are providing computer manufacturers with greater flexibility", and doing so immediately, it said.

The move is a 180-degree reversal from previous mandates by Microsoft. In the past, personal-computer (PC) makers, such as Compaq, Dell and Gateway were required to install programs such as Microsoft's Internet Explorer internet browser on computers alongside its ubiquitous Windows operating system.

XP release

Microsoft said the changes would be incorporated in its latest release of the consumer version of its operating system, called Windows XP.

Flags outside Microsoft corporate headquarters
Microsoft recognises the need for "greater flexibility"
The company said, that although the changes would require additional development work and testing, it still planned to launch on 25 October.

Under the new plan, computer makers will be allowed to put the icons of non-Microsoft products on computer desktops and will not be required to place Microsoft ones there.

Microsoft shares closed up $2.02 to $66.50 on the announcement and on higher than expected second-quarter revenues.


Rafe Needleman, who follows Microsoft as a columnist for Red Herring business technology webzine, said the change was good news for PC makers.

He added, however, that the option to exclude the Internet Explorer from Windows was largely symbolic because there really is not any other software out there.

On the public relations front it helps them in the sense that it shows them being deferential to the court

Analyst Jonathan Geurkink
Recent surveys have shown that Microsoft's Internet Explorer web browser commands 85% of the internet-surfing software.

This latest news follows another Microsoft announcement late last month that it was dropping planned "Smart Tags" in Windows XP, a controversial feature that would direct users to Microsoft-approved Web sites by clicking on any word.

The changes in strategy for Microsoft's flagship product have prompted some analysts to herald a new humility in the software giant.

But others, such as Jonathan Geurkink of Ragen McKenzie in Seattle, said the change was largely cosmetic.

"On the public relations front it helps them in the sense that it shows them being deferential to the court," he told the Associated Press news agency.

But he said he saw little benefit for users or competitors.

Search BBC News Online

Advanced search options
Launch console
See also:

29 Jun 01 | Business
Judge's view on Microsoft
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories