Microsoft Vows to Defend Its Product Innovations

REDMOND, Wash., Oct. 20 — Responding to today’s Justice Department action, Microsoft Corp. announced that it will vigorously defend its practice of rapidly improving its Windows products with new features and functionality, and distributing updated versions of Windows through PC manufacturers. Microsoft said that product improvements are always pro-competitive. Microsoft’s improvements to Windows are a key contributing factor to the phenomenal growth, rapid innovation and intense competition in the PC software industry.

The Justice Department filed a motion today in Federal District Court, alleging that Microsoft had violated a 1994 consent decree dealing with certain aspects of licensing the Windows operating system to computer manufacturers.

“We are operating in a completely lawful manner. The consent decree explicitly states that Microsoft may integrate new features into the operating system that it licenses to PC manufacturers without violating the decree. All software vendors are entitled to improve their products, and to do so rapidly,”
said William H. Neukom, Microsoft’s Senior Vice President for Law and Corporate Affairs.

“Microsoft is competing vigorously and in full compliance with the consent decree. Our efforts are benefiting consumers by spurring greater innovation, better products, and lower prices,”
Neukom said.

“A fundamental principle at Microsoft is that Windows gets better and makes the PC easier to use with each new version,”
said Bill Gates, Chairman and CEO of Microsoft.

Today people want to use PCs to access the Internet. We are providing that functionality in Windows, and providing a platform for innovation by thousands of other software companies. It would be a great disservice to our customers if Microsoft did not enhance Windows with Internet-related features, and rapidly distribute updated versions of Windows through PC manufacturers.

“The natural evolution of an operating system is that it allows PC users to access information, whether it be on a local area network, a wide area network or, today, the Internet,”
said Brad Chase, Vice President for Microsoft’s Internet Client Group.
“The integration of these valuable features into the basic product makes for a better solution at a more attractive price for consumers.”

Launched in September, Internet Explorer 4.0 has experienced unprecedented popularity with PC users worldwide:

  • More than two million customers have downloaded the new browser from the Internet in less than 2 weeks of availability.

  • More than 20 major corporations have standardized on Internet Explorer, committing to deploy it on over 300,000 desktops, and developing Active Channels and Active Desktops for their businesses.

  • Each of the top business and PC industry trade journals – including the Wall Street Journal, PC Magazine, and CNET – have recommended Internet Explorer 4.0 over the competition for its ease of use, integration of desktop and web browsing and other consumer features.

  • The top 10 PC makers representing over 40 million PCs shipped last year, the top 10 Internet service and online service providers representing over 10 million current subscribers, and hundreds of other companies have freely chosen to ship Internet Explorer 4.0 along with customized Active Channels.

Windows 98, which will include a tightly integrated IE 4.0 when it’s released next year, will make computing easier, more reliable, faster, and more fully integrated with the Internet. Windows 98 is the fastest platform for running Internet Explorer 4.0.

Building on Windows 95 innovation, Windows 98 defines cutting-edge capabilities-such as enabling powerful new hardware technologies and entertainment platforms-while at the same time maintaining the best support for older Windows-based applications and technologies.

Hundreds of independent software vendors across the U.S. and worldwide are currently building software applications that will run on Windows 98. Thousands more companies will support, sell, train and implement Windows 98 in homes, businesses and schools everywhere.

Founded in 1975, Microsoft (NASDAQ
) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

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