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08.22.07

Playing a Standards War Using the Language of Money

Posted in Deals, Deception, Finance, Formats, Linspire, Microsoft, Novell, Office Suites, Open XML, OpenDocument, OpenOffice, Standard, Xandros at 2:27 am by Dr. Roy Schestowitz

Many times before we saw injustice. We have also seen Microsoft using its deep pockets to combat truly open formats. To exemplify the effect that formats have on consumers, we used a timely set of stories on Blu-ray and HD DVD.

Reception (of Money)

The same loathed tricks appear to be pulled once again. These are being pulled in order to gain an edge over Sony and the PlayStation 3, among other rival products and competing labels. Not quality of a format is considered. Instead, it’s about how much money is at stake and how much can be used as form of ‘bribery’.

But money talks: Paramount and DreamWorks Animation together will receive about $150 million in financial incentives for their commitment to HD DVD, according to two Viacom executives with knowledge of the deal but who asked not to be identified.

The incentives will come in a combination of cash and promotional guarantees. Toshiba, for instance, will use the release of “Shrek the Third” as part of an HD DVD marketing campaign.

Paramount and DreamWorks Animation declined to comment. Microsoft, the most prominent technology company supporting HD DVDs, said it could not rule out payment but said it wrote no checks. “We provided no financial incentives to Paramount or DreamWorks whatsoever,” said Amir Majidimehr, the head of Microsoft’s consumer media technology group.

Microsoft “could not rule out payment”. Doubts can be raised.

Bearing in mind that money can come through proxies (think about Baystar), one cannot rule out anything, so suspicion remains. Either way, if true, this might not not the first time that Microsoft’s use of partners in this particular standards war gets a mention. When it comes to OOXML, the resemblance in strategies is uncanny.

As we mentioned many times before, Novell, Xandros, and Linspire were paid by Microsoft o become OOXML participants (even fans).

Deception (Consumer Suffers)

The onslaught of lies and deception continues. Microsoft claims implemented support for OOXML by third parties. It says nothing whatsoever about how poor the support is (only Microsoft can implement OOXML). From Rob Weir’s blog:

Everyone is in the same boat with this: KOffice, Corel, Google, IBM, anyone who has applications that work with Microsoft documents. We’re all faced with the prospect of significant expenses to rewrite our file format support with no net benefit to our customers. This is the toll we all must pay to Microsoft just for the ability to fight for the scraps their monopoly may leave behind. If Microsoft jerks their format around, we all must run and chase after it, reallocating resources away from feature work, becoming in the process less competitive in the marketplace, while Microsoft forges ahead with new features. They can easily repeat this game every few years, just to keep competitors busy. This is what a death spiral looks like.

Giving absolute control of a standard document format to a monopolist that is notorious for abusing their control of file formats in the past is insanity. It doesn’t take a Sherlock Holmes to figure that out.

This long blog item provides many visual examples which show what Microsoft considers proof of fair competition.

Money and deceit. Themes of our time.

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