Long, Long, Long Horn

• By Paul Desmond
• 02/02/2005

Key features are gone, it’s been delayed for months and nobody is really sure when it will ship, unless you consider “next year” a solid delivery date. And now the U.S. Department of Justice wants to take a look at it. It may be time to start talking about Longhorn ship dates in terms of decades, and I’m not sure I’d bet on the current one.

The DOJ apparently wants to make sure Microsoft is holding up its end of the anti-trust agreement it signed back in 2002, which said Microsoft has to enable competing browsers, media players and other software to run on top of Windows. Microsoft is positioning its mid-February meeting with DOJ officials as routine, just part of fulfilling its agreement. And while the company has certainly been trying to play nice with the law, even opting not to appeal an unfavorable ruling in the highest European court, the DOJ and a number of state attorneys general are armed with a list of issues that they want explained. I don’t see any way this can be a good thing for Microsoft, or Longhorn. Check out Scott Bekker’s story on Redmondmag.com for more info.

Searching Through The Revenue Numbers
Meanwhile, Microsoft seems to be doing just fine with its current product lineup, judging by last week’s quarterly earnings announcement. The company reported a net profit of $3.46 billion on $10.82 billion in revenue, a 7 percent increase over the same quarter last year.

A few items jump out from the announcement. First, the Home and Entertainment unit checked in with its first profitable quarter ever, on the back of the Halo 2 game and Xbox console sales. I know virtually nothing of these products because I simply don’t care about computer games, probably because I don’t have kids who are old enough to care about computer games. I am, however, a bit anxious to see whether Microsoft can make hay with its Media Center product. Personally, I have no problem dealing with digital photos on my laptop, putting CDs in the five-disc changer I bought in the mid-'90s, and watching TV with a clicker in hand, not a mouse. Call me crazy.

The second oddity is that the Information Worker unit, which includes the Office family, showed a profit increase vs. the year-ago quarter, but saw revenue decline. Microsoft’s explanation is that the big Exchange Server 2003 launch came during the same quarter last year, creating an unusual revenue bump. Another, more cynical explanation might be that folks just aren’t buying the idea -- as espoused by Information Worker head Jeff Raikes in our February cover story -- that Office 2003 brings productivity benefits that are simply too good to pass up. Check out what Jeff has to say at as well as our analysis of the budget numbers.

Finally, MSN posted a nice, $130 million profit, as opposed to a $95 million loss in the year-ago quarter. And that came before yesterday’s launch of Microsoft’s first homegrown search engine, which seems to be a worthy enough competitor to Google. I searched for news of New England Patriots coach Bill Belichick and the first story that came up was from the Boston Globe, which makes sense. The first story from a Boston paper in Google was 10 stories deep. There’s no telling what role sponsorships played, and old habits die hard, but Microsoft just might woo some Google aficionados. (By the way, Go Pats!)

Genuine Advantage

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I’m trying to get worked up about news of the Microsoft Genuine Advantage program, but it’s not happening. Some pundits are up in arms that Microsoft would deign to refuse updates from its Download Center to those who have pirated versions of Windows, as will be the case late next year. In the meantime, the company is encouraging customers to join Genuine Advantage voluntarily, thereby authorizing Microsoft to check the validity of their software. Customers who comply get access to a bunch of stuff, like Photo Story 3 and Winter Fun Pack 2004, “valued” at $450. The value of such things to me is $0, but I still have a hard time hammering Microsoft for taking steps like this to ensure that people pay for its products.

I Gotta Be Me
If you’re worried about becoming a victim of identity theft, you should be more concerned about paper trails than electronic ones. While identity theft cost Americans $52.6 billion last year, only 12 percent of cases involved online theft, according to a survey of 4,000 consumers conducted by Javelin Strategy & Research. Keeping an eye on your accounts online is definitely a good idea: those who detected fraud via online means suffered losses averaging $551, whereas those who waited for a paper statement got whacked for $4,543.

Microsoft Prepping Flying Car
News is circulating in Europe that Microsoft is working on a flying car, the result of Microsoft MapPoint and AutoRoute recommendations that would have people drive over the Celtic Sea and other rather large bodies of water. (AutoRoute is Microsoft software that purports to "quickly find the best route to your destination — in the United Kingdom and all over Europe.") The Register is offering a prize for "the most spectacular journey to be undertaken by Microsoft's Flying Car." Some users are finding a silver lining, however.

"The good thing is our company accept[s] Autoroute journeys as proof of mileage," one reader told The Register.