Microsoft Trial Judge Based His Break-Up "Remedy" On Flawed Theory, Not Facts

[Declan McCullagh]

Phill gets it halfway right, or put another way is halfway wrong.

The question is not whether network effects exist or not; clearly they
do in some form. Better questions include whether they have produced
inferior results than "someone" desires, how strong they are, and whether
state intervention is a good idea because of their alleged ill effects.

Phill also is not aware that VHS has some advantages over betamax,
and also persists in crankishly calling libertarian groups "right
wing." He is clearly an example of a person who needs killing. (*)

-Declan

(*) Kidding! Kidding!


On Wed, Feb 28, 2001 at 10:46:55PM -0500, Phillip Hallam-Baker wrote:
> 
> 
> 
> > Microsoft won because of superior reviews? Come on, how stupid do you
> > think we are?  So if a company pays for glowing reviews that would be
> > okay?
> 
> Matthew's argument is that 'network effects' do not exist, based on a
> tendentious piece of propaganda pushed by a right wing crank tank. The crank
> tank is attempting to proove that the free market is perfect, unsullied by
> the possibility of monopoly that obviously ignorant writers such as Adam
> Smith wrote at great length about.
> 
> Hence the anecdotes such as QWERTY, Betamax are attacked as if they were the
> best evidence, the sole evidence even for network effects. This is
> historical revisionism in the service of dogmatic ideology.
> 
> Positive feedback exists, get over it.
> 
> 
> >Obviously they have never tried to sell a product.  It's very
> > dificult to get consideration such that you could prove the technical
> > merits when there is a large existing supplier.
> 
> That is only a weak network effect. People buy from Amazon because they have
> a well known brand name, have established a customer reputation etc. But
> there is no intrinsic advantage buying from a large online bookseller than a
> medium sized one.
> 
> There is a big advantage having a VHS video over Betamax however. If you
> have VHS you can rent movies from stores, you can send tapes to friends who
> have equipment to play it. The fact that a modern day VHS recorder is
> technicaly superior to any Betamax machine made is irrelevant. At the time
> the standard was set Sony and Betamax had the clearly superior technology.
> 
> 
> A network effect exists when there is an intrinsic advantage to join the
> bigger network. Operating systems have been understood to have strong
> network effects since the 1950s. My company only supports one version of
> UNIX for certain products because the cost of QA on each O/S variant is
> significant. If we were choosing the technically best O/S platform we would
> probably look at of the stripped down, hardened BSD variants, but we choose
> the platform that most of our customers are already familliar with -
> Solaris.
> 
> When I wrote video-games for a living I wrote for the Sinclair ZX Spectrum
> with a market of several million users, not the vastly more sophisticated
> BBC computer - even though the spectrums would die after about 100 hours use
> and need replacement. I would typically replace a spectrum three or four
> times within the guarantee period. Writing a game for the bigger market gave
> bigger returns. Customers bought the machines supported by the most games.
> 
> 
> Network effects are the alpha and the omega of Internet business strategy.
> 
> Ironically despite paying for the tendentious propaganda Microsoft appears
> to be benefitting from the argument that network effects and 'tipping'
> explain the emergence of a single operating system.
> 
> I don't know if the DoJ should interpret recent events in Seatle as a divine
> attempt to breakup Microsoft. If so it is really time for the DoJ to give up
> since it evidently failed.
> 
> 		Phill
>