[.ca] Winners, Losers & Microsoft: Competition and Antitrust ... (ISBN 0945999844)

From Amazon.com:
In Winners, Losers & Microsoft, two top economists punch some big holes in the government's antitrust case against the software behemoth. Stan J. Liebowitz and Stephen E. Margolis argue that government lawyers are dead wrong to say that consumers are being forced to accept inferior standards and high prices because of Microsoft's hegemony. With some well-documented and original research, the authors conclude that Microsoft is as successful as it is for a simple reason: good products win. "Whether they are lowly mousetraps or high-tech networks, better products prevail in the marketplace. People choose what they want, and what they want survives, at least for a while," they write. The authors also challenge the economists who believe that when it comes to technology, inferior standards get locked in because of unfair corporate actions or irrational consumer behavior. Through cogent analysis, Liebowitz and Margolis tear apart the two key examples used by these other economists: the VHS videocassette format and the so-called QWERTY typewriter keyboard layout. The authors argue that those formats dominate today because they truly were as good as, if not better than, their competitors, the Beta videocassette and Dvorak keyboard. While most of the book is theoretical and aimed toward those interested in public policy and economics, Winners, Losers & Microsoft can also be an eye opener for anyone who wants to learn more about the antitrust case against the company. --Dan Ring

Gates and Rockefeller - not so bad, huh?:
When enormous companies are extremely successful it attracts a great deal of attention. Usually this attention is centered around fear. People are afraid of companies being too successful, and making too much money. The fact that Microsoft has risen to such a high status in today's market is terrifying to some people. They look at Microsoft and assume that just because they are very dominant it is a sure sign that they are going to try and drive competitors out and then raise all the prices. They accuse them of crimes such as, Predatory Pricing, Linking or Bundling, and Collusion. They do this instead of looking at the company for what it is, a very efficient, well running, machine. Many people have compared Bill Gates with John Rockefeller saying that there is not much difference. Well, if that is going to be said it should be known that even Rockefeller's most harsh critic Ida Tarbell described his company as "a marvelous example of economy." Basically Gates and Rockefeller do have something in common. They both were able to run a business very productively, efficiently and innovatively and they will both be punished for it. When you look at the Microsoft situation you have to ask the question, who have they hurt? The answer to that question is nobody. As Stan Leibowitz and Steve Margolis state in their book, "Winners, Losers, and Microsoft," the effect that Microsoft's competitiveness has had on the market is in fact a huge reduction in prices and a great improvement of quantity and quality of computer products (Ludwig). This is the exact opposite of what a monopoly is supposed to cause. Going into more detail, it can be seen that Word processing prices were on the rise before Microsoft developed their Word program for Windows in 1989. This alone caused prices to drop from $300 in 1990 to $50 in 1997 (Ludwig). Also Microsoft had a positive effect on personal finance software when they came out with their Microsoft Money program. This caused finance software to drop from $100 in 1990 to $20 in 1991 (Ludwig). It has also been proven that during Microsoft's existence, "the cost of information processing to the consumer has plummeted so far today that it is now one hundredth of one percent of what it was in 1975." It's interesting to note that Microsoft was started in 1975.

Dvorak isn't a myth.:
It's true that no completely scientific studies have been done on Dvorak vs Qwerty, but it hardly takes a study to see that Dvorak is better. Qwerty was created before touch typing was ever dreamed of. It's no better than an alphabetic arraingement. Anyone who touch types knows that some words are harder to type than others because you have to reach for awkward keys or one finger has to do too much work. Dvorak simply makes the common keys easier to get to and all but eliminates the need for one finger to type two letters in succesion. Just think of a word that's easy for you to type in Qwerty (e.g., flask), and consider that the majority of words you type in Dvorak feel like that. Do you believe these agenda driven jokers or your own fingers? This isn't rocket science. I don't need a study to tell me that a layout designed for touch typing will be better than one that was designed to keep primitive machines from jamming, and I don't trust the authors of a book who will set aside common sense and ignore the obvious in their quest to prove their pet theory. Also, I think Microsoft is a great company and we're all better off because it exists, but to deny that their OS monopoly gives them a huge advantage in the marketplace for other software products is a special kind of idiocy which can only be obtained through decades of academic isolation.

Brilliant debunking of current antitrust law:
Forget Microsoft. This book will make you doubt everything you've ever been taught about lock-in, bundling, and the ease with which market dominance can be abused. But don't forget about Microsoft entirely--the book makes clear that the conventional wisdom about how the company achieved dominance could lead to "remedies" that would have a terrible effect on the software market as a whole--inevitably dooming winners to constant hamstringing or worse in order to enforce an artificial measure of competition. The movie puts the lie to much that has been said about Microsoft by its critics, competitors, and even its advocates. Certainly no one connected to Microsoft has made such a devastating rebuttal of the charges against it. This book is a must-read for those interested in the outcome of that case.

Authors do not know the computer industry:
The authors are PH.D. economists, but obviously do not know how the computer industry works. I've been in the industry over 40 years and had to deal with the IBM and Microsoft monopolies. Much of the text deals with dead issues like Beta vs. VCR and QWERTY vs. Dvorak keyboards. If you are interested in these topics, the material is complete. The rest of the book is a defense of Microsoft and tells us that Microsoft is a success because of the quality of their software. They do not mention the hundreds of bug fixes and security patches Microsoft sends out regularly. Most people in the computer business will laugh at some of the statements in this book.

An incisive book shedding light far beyond the MSFT case:
This book is unfortunately titled as it is really primarily about bringing real data and rigor to bear on many of the conventional "stories" about the economics of the new economy, rather than dwelling on the Microsoft antitrust situation. Clearly, the new economy tends to be characterized by more network effects, increasing returns to scale, and general "winner-take-all" effects than the historical economy. However, certain stories about early lock-in effects of technologies that are inferior, but that by luck got the early lead, have been uncritically passed from author to author. Examples are the QWERTY keyboard, VHS vs Betamax, Windows vs Apple, etc. Liebowitz and Margolis show that most of these stories do not hold up under close examination -- that in fact, these are not examples of the market failing to take the "right path". Actually, the market generally seems to get it right. This book is also the best we have seen in its treatment of the overall economics of information technology standards.