Microsoft: AOL (not Linux) boosts competition

By Jeanette Borzo
IDG News Service, 11/30/98

America Online's proposed acquisition of Netscape last week is sure to create a stronger competitor for Microsoft, Microsoft executives said. The software giant is also watching the development of Linux to determine if one day the Unix-like operating system will pose a threat to Windows NT, the executives added.

AOL's combination of its portal site with the Netscape browser-along with its strategic alliance with Sun to develop Internet devices using Sun's Java programming language-create a stronger competitor for Microsoft in the quest for "eyeballs," said John Leftwich, marketing vice president for Microsoft Europe, Middle East and Africa.

"The scramble now is to build the best portal," Leftwich said at a gathering of IDG editors here last week.

"Advertising is the main revenue stream" for vendors looking to capture a piece of the Web market, and the way to get more advertising is to have more users coming to your portal site. Beyond attracting visitors, portal sites want to deliver "click-throughs"-connecting users to other sites in order to attract vendor partnerships, Leftwich said. So the battle for the most alluring portal site with the best click-through rate will keep Microsoft busy as it competes with the newly bolstered AOL, he added.

On another competitive front, Microsoft said that the existence of the Unix-like operating system Linux proves that there is healthy competition in the operating system market, although Microsoft is still saying it doesn't consider Linux to be a serious competitor-at least not for the time being.

Software developers know where their NT operating system is going because Microsoft has extensive and far-reaching development plans for the product, Leftwich said. However, Linux's direction is not so clear, he said, because the product is developed by users and not by a single company.

"There is no roadmap for Linux," Leftwich said. "For the Microsoft developer, there is a level of confidence in which you can write for the Windows platform."

Microsoft continues to have no plans to port any of its applications to the Linux platform. "Why should we? What does it give us?" Leftwich asked. "Linux doesn't give us anything over and above what we've got."

"I can see some of its advantages, such as price," Leftwich concluded. "I think Linux is more of a threat or a challenge to traditional Unix vendors. We will continue to interoperate with it-we'll keep watching Linux."