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Tech Industry

Giving to get

This week's lesson is the act of giving and giving-in, and how it's done a little differently in the computer industry.

This week's lesson, dear readers, is the act of giving and giving in, and how it's done a little differently in the computer industry.

There is of course news of the settlement between Microsoft and the Justice Department, or how Microsoft gave in but in a typically Redmondian sort of way, but more on that later.

First let's explore an act of giving on the part of Kingston Technology. The memory board maker recently undertook a little charity that would have had even Ted Turner scratching his head. (To refresh your memories, the cable TV mogul gave away $1 billion to the U.N. late last year.)

Kingston's charitable act certainly has to be called unique: Its founders decided not to collect the $333 million owed by Softbank as final payment of the $1.5 billion purchase price Softbank agreed to pay for 80 percent of Kingston. Yes, you read it right: Kingston is not going to collect the money due it, and not because it has any contractual obligation to forgive the debt. "We could do nothing and say 'A deal is a deal,'" John Tu, the cofounder of Kingston, told the New York Times.

So why do it? It's not as if Softbank, which owns the Ziff-Davis technology publishing empire, qualifies as your ideal candidate for charity.

The Kingston folks forgave Softbank because they felt it was the right thing to do, considering that Softbank's earnings had failed to meet expectations, according to the Times. The paper surmised Tu's corporate ethic must be "that business success will follow if ethical practices and the concerns of employees and vendors are given first priority."

If so, the Kingston cofounder certainly has a different take on how to give and to conduct business than Microsoft and its cofounder, Bill Gates.

For Microsoft, concern for vendors is certainly not first priority, if it's a priority at all. Nor until Thursday, when it reached a settlement with Justice, did it seem to be concerned with the government's concerns, which centered around Microsoft's providing PC makers a choice of Windows 95 without the Internet Explorer browser.

Microsoft easily could have given in and complied with the DOJ order without any loss to its reputation or its business.

But instead it decided to put on a show of defiance, petulance, and arrogance, apparently aimed more at its so-called business partners than at the government. The message it seemed to be delivering to them was that if Redmond can stare down the DOJ, which wields unsurpassed power, then what chance do mere business competitors have?

In other words, even in the act of giving in to the DOJ, Microsoft got what it wanted all along: The forced loyalty of its business partners.

Most OEMs will likely continue to sell PCs with a version of Windows 95 that includes IE. (What happens to Netscape is another matter.) Microsoft executives said after the settlement announcement that they don't know of any OEM which has asked for Windows 95 without IE. Two market leaders, Compaq and Dell, told NEWS.COM that they have no plans at all to alter their browser arrangements, which feature IE right on the desktop.

"We know what our customers want, and what they want is IE," said Angela Goodwin, a spokeswoman for Compaq. When asked how Compaq came to this conclusion, Goodwin replied, "I can't tell you the exact method we used to determine that...Compaq has a choice of what to do, and we chose to go with IE."

In giving up and giving in, Kingston's Tu and Microsoft's Gates demonstrate why the computer industry is like no other.